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Item 9A. Controls and Procedures

2024-07-26 compared with 2023-04-11 · 595 added, 495 removed, 358 unchanged (75% of the section changed)

CONTROLS AND PROCEDURES.

Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

conducted an evaluation of the effectiveness of our “disclosure controls and procedures” (“Disclosure Controls”),

as defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of December 31, 2022, the end of the period covered by this Annual

Report on Form 10-K.

The Disclosure Controls evaluation was done in conjunction with an independent consultant and consulting firm and

under the supervision and with the participation of management, including our chief executive officer and chief financial officer.

are inherent limitations to the effectiveness of any system of disclosure controls and procedures.

As of December 31, 2022, based on

the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over

financial reporting, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures

were not effective.

In light of this determination, our management has performed additional analyses, reconciliations, and other post-closing

procedures and has concluded that, notwithstanding the material weakness in our internal control over financial reporting, the consolidated

financial statements for the periods covered by and included in this Annually Report on Form 10-K fairly state, in all material respects,

our financial position, results of operations and cash flows for the periods presented in conformity with U.S.

Report on Internal Control over Financial Reporting

is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and

15d-15(f) under the Exchange Act.

Our internal control over financial reporting is designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with

generally accepted accounting principles.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls

may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate

including our chief executive officer and our chief financial officer, assessed the effectiveness of our internal control over financial

reporting as of December 31, 2022.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations

of the Treadway Commission in Internal Control - Integrated Framework (2013) .

Management’s Conclusions Regarding Effectiveness

of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of

our “disclosure controls and procedures”, as defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of December

31, 2023, the end of the period covered by this Annual Report on Form 10-K.

The disclosure controls and procedures evaluation was done

in conjunction with an independent consultant and consulting firm and under the supervision and with the participation of management,

including our chief executive officer and chief financial officer.

There are inherent limitations to the effectiveness of any system of

disclosure controls and procedures.

As of December 31, 2023, based on the evaluation of these disclosure controls and procedures, and

in light of the material weaknesses found in our internal controls over financial reporting, our chief executive officer and chief financial

officer have concluded that our disclosure controls and procedures were not effective.

In light of this determination, our management

has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material

weaknesses in our internal control over financial reporting, the consolidated financial statements for the periods covered by and included

in this Annual Report on Form 10-K fairly state, in all material respects, our financial position, results of operations and cash flows

for the periods presented in conformity with U.S.

Management’s Annual Report on Internal

Control over Financial Reporting

Management is responsible for establishing and maintaining

adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control

over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation

of consolidated financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness of internal control

over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions

or that the degree of compliance with the policies or procedures may deteriorate over time.

Management, including our chief executive

officer and our chief financial officer, assessed the effectiveness of our internal control over financial reporting as of December

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the

Treadway Commission in Internal Control - Integrated Framework (2013) .

A material weakness is a deficiency, or a combination

1 unchanged sentence

internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or

interim financial statements will not be prevented or detected on a timely basis.

In our assessment of the effectiveness of internal

control over financial reporting as of December 31, 2022, we determined that controls are not effective because control deficiencies

existed that constituted a material weakness.

of December 31, 2022, we had a material weakness in our internal control over financial reporting due to not having the appropriate controls

in place over our revenue recognition process for nonroutine and complex revenue transactions in accordance with ASC 606, “Revenue

from Contracts with Customers”.

This control deficiency resulted in a misstatement of revenue-related accounts during the three

months ended March 31, 2022 and June 30, 2022, which management corrected through a revision as part of the Quarterly Report on Form 10-Q for

the three months ended September 30, 2022.

order to remediate this material weakness, management has expanded and improved our process for reviewing customer contracts and revenue recognition inputs,

including through the engagement of third-party accounting professionals with expertise in evaluating customer contracts to obtain

guidance on large and/or unique contracts in order to ensure that ASC 606 is accurately applied and documented.

we have begun implementing the enhancements described above at the end of 2022 and have been continuing our remediation efforts through the first quarter of 2023, the material weakness will not be considered remediated until the

applicable controls operate for a sufficient period of time and management has concluded that these controls are operating

annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial

reporting, as permitted by the rules of the SEC.

in Internal Control over Financial Reporting

Except as described above, there were no changes in our internal control over financial reporting during the three months ended December

31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

interim consolidated financial statements will not be prevented or detected on a timely basis.

In our assessment of the

effectiveness of internal control over financial reporting as of December 31, 2023, we determined that the Company’s internal

control over financial reporting was not effective as of December 31, 2023 due to the material weaknesses described below.

The Company did not maintain effective controls over

the revenue recognition of over-time contracts and associated costs.

The Company’s underlying estimates of total labor hours required

to complete over-time contracts were materially different from the actual labor hours required, which was determined to represent an error,

and, as a result, the percentage of completion used to recognize revenue was materially different from the percentage of completion using

actual labor hours incurred.

Additionally, the Company did not properly account for recognition of costs incurred by contract.

material weakness resulted in the restatement of the Company’s consolidated financial statements for the year ended December 31,

2022, as well as its interim consolidated financial statements for the three months ended March 31, 2022 and 2023, the three and six months

ended June 30, 2022 and 2023 and the three and nine months ended September 30, 2022 and 2023.

The Company did not design and maintain effective

controls over the accounting for inventory and related cost of sales, primarily due to the lack of an automated tracking system and the

manual nature of its current processes and controls surrounding inventory.

Specifically, we did not design and maintain effective controls

over (1) complete and accurate inventory costing, including recording inventoriable costs at the lower of cost and net realizable value,

(2) cycle count procedures and inventory system changes, which occur without proper review and documentation and (3) proper segregation

The Company has a lack of sufficient accounting

personnel with the necessary skills, knowledge, and expertise.

This deficiency impacts our ability to ensure appropriate segregation

of duties, and to accurately and timely close, consolidate and prepare financial statements as required to maintain compliance with

reporting deadlines under applicable SEC regulations.

These material weaknesses

resulted in identified material misstatements to the financial statements, and the Prior Financial Statements are restated in this filing.

Remediation Plan

The Company is implementing enhancements to its

internal controls to remediate the identified material weaknesses in its internal control over financial reporting.

Specifically, the

external third parties for assistance as needed;

a review and update of significant accounting policies, procedures, and controls;

additional training for its accounting and financial

reporting personnel.

Additionally the Company plans to hire additional accounting and finance

personnel with the requisite skills, knowledge and expertise to address identified control deficiencies.

The Company is committed to maintaining a strong

internal control environment and believes these remediation efforts will represent significant improvements in its controls over the

control environment.

These steps will take time to be fully implemented and confirmed to be effective and sustainable.

Additional controls

may also be required over time.

While the Company believes that these efforts will improve its internal control over financial reporting,

the Company will not be able to conclude whether the steps the Company is taking will remediate the material weaknesses in internal control

over financial reporting until a sufficient period of time has passed to allow management to test the design and operational effectiveness

of the new and enhanced controls.

Until the remediation steps set forth above are fully implemented and tested, the material weaknesses

described above will continue to exist.

This annual report does not include an attestation

report of our registered public accounting firm regarding internal control over financial reporting, as permitted by the rules of the

Changes in Internal Control over Financial Reporting

Except for commencing implementation of the remediation plan described in our

Annual Report on Form 10-K for the year ended December 31, 2022, and the further remediation efforts described above, there were no changes

in our internal control over financial reporting during the three months ended December 31, 2023 that have materially affected, or are

reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Officers and Directors

following table sets forth the name, age and positions of our executive officers and the members of our board of directors:

with the Company

Chief Executive Officer and Chairman of the Board of Directors

Financial Officer, Secretary and Treasurer

board of directors currently consists of seven members.

Our directors hold office until the earlier of their death, resignation or removal by stockholders or until their successors have been

Our directors serve a term of office to expire at the annual meeting

of stockholders in 2023.

Pursuant to an amendment to our bylaws, effective September 21, 2022, elected directors shall hold office until

the next annual meeting of the stockholders, or until their successors shall be duly elected and qualified.

Our officers hold office until the earlier of their death, resignation

or removal by our board of directors or until their successors have been selected.

They serve at the pleasure of our board of directors.

Mazurek has served as our chief executive officer, president and chairman of the board of directors since December

From December 2, 2009 through August 12, 2010, Mr.

Executive Officers and Directors

The following table sets forth the name, age

and positions of our executive officers and the members of our board of directors:

Position with the Company

President, Chief Executive Officer and Chairman of the Board of Directors

Walter Michalec

Chief Financial Officer, Secretary and Treasurer

Jonathan Tulkoff

Kytchener Whyte

The board of directors currently consists

of seven members.

Our directors hold office until the earlier

of their death, resignation or removal by stockholders or until their successors have been qualified.

Our directors serve a term of office

to expire at the annual meeting of stockholders in 2024.

Pursuant to an amendment to our bylaws, effective September 21, 2023, elected

directors shall hold office until the next annual meeting of the stockholders, or until their successors shall be duly elected and qualified.

Our officers hold office until the earlier

of their death, resignation or removal by our board of directors or until their successors have been selected.

They serve at the pleasure

of our board of directors.

Mazurek has served

as our chief executive officer, president and chairman of the board of directors since December 2, 2009.

From December 2, 2009 through

August 12, 2010, Mr.

Mazurek also served as our chief financial officer, secretary and treasurer.

Mazurek has over 25 years of experience in the electrical equipment and components industry.

Mazurek has served as the chief

executive officer, president, vice president, sales and marketing and chairman of the board of directors of Pioneer Transformers Ltd.

Mazurek has served as the president of American Circuit Breaker Corp., a former manufacturer and distributor of circuit

breakers, since 1988.

From 1999 through 2017, Mr.

Mazurek served as director of Empire Resources, Inc., a distributor of semi-finished

aluminum and steel products.

Mazurek has over 25 years of experience

in the electrical equipment and components industry.

Mazurek has served as the chief executive officer, president, vice president,

sales and marketing and chairman of the board of directors of Pioneer Transformers Ltd.

Mazurek has served as the president

of American Circuit Breaker Corp., a former manufacturer and distributor of circuit breakers, since 1988.

From 1999 through 2017, Mr.

Mazurek served as director of Empire Resources, Inc., a distributor of semi-finished aluminum and steel products.

From 2002 through 2007,

Mazurek served as president of Aerovox, Inc., a manufacturer of AC film capacitors.

Mazurek received his BA from Yeshiva College in 1983 and his JD from Georgetown University Law Center in 1986.

Mazurek brings

to the board of directors extensive experience with our company and in our industry.

Since he is responsible for, and familiar with,

our day-to-day operations and implementation of our strategy, his insights into our performance and into the electrical equipment and

components industry are critical to board discussions and to our success.

Michalec was appointed by our board of directors to act as the Interim Chief Financial Officer of the Company,

effective as of April 15, 2020, replacing Mr.

Mazurek received his BA from Yeshiva College

in 1983 and his JD from Georgetown University Law Center in 1986.

Mazurek brings to the board of directors extensive experience with

our company and in our industry.

Since he is responsible for, and familiar with, our day-to-day operations and implementation of our strategy,

his insights into our performance and into the electrical equipment and components industry are critical to board discussions and to our

Walter Michalec .

was appointed by our board of directors to act as the interim Chief Financial Officer of the Company, effective as of April 15, 2020,

replacing Mr.

Klink after his resignation as Chief Financial Officer.

On May 13, 2021, the board of directors

Michalec the title of Chief Financial Officer of the Company and removed the title of Interim Chief Financial Officer, effective

May 16, 2021.

Michalec also serves as the Company’s principal accounting officer, principal financial officer, treasurer and

Michalec has served various positions at the Company, most recently as its corporate controller from August 2019 to April

Before becoming the corporate controller, Mr.

Michalec served as the Company’s operations controller from March 2016 to August

2019, reporting to the Chief Financial Officer, and as the Company’s senior accountant from May 2012 to February 2016, reporting

to the Company’s corporate controller.

On May 13, 2021, our board of directors assigned Mr.

title of Chief Financial Officer of the Company and removed the title of Interim Chief Financial Officer, effective May 16, 2021.

Michalec also serves as the Company’s principal accounting officer, principal financial officer, treasurer and secretary.

has served various positions at the Company, most recently as its corporate controller from August 2019 to April 2020.

Before becoming

the corporate controller, Mr.

Michalec served as the Company’s operations controller from March 2016 to August 2019, reporting to

the Chief Financial Officer, and as the Company’s senior accountant from May 2012 to February 2016, reporting to the Company’s

corporate controller.

Prior to working for the Company, Mr.

Michalec served as a public accountant for Mendonca

& Partners Certified Public Accountants, LLC in Union, NJ.

Michalec received his Bachelor of Science in Accounting and a Minor

in Criminal Justice from Kean University in 2011.

Cohn has served as a director since December 2, 2009.

Cohn founded EastSky Properties, LLC in June 2019 and L3C

Capital Partners, LLC in June 2009, both an investor in multi-family residential properties, and serves as a partner in both firms.

Cohn served as a director of investor relations at IDT Corporation, a NYSE-listed telecommunications company, from September 2005 through

Prior to joining IDT Corporation, Mr.

Cohn was a director of research at SAGEN Asset Management, an asset manager of funds

of hedge funds, from January 2005 through May 2005.

Cohn began his career as an analyst in the funds-of-funds investment group of

Millburn Ridgefield Corporation, where he worked from 2001 through January 2005.

Michalec served as a public accountant for Mendonca & Partners Certified

Public Accountants, LLC in Union, NJ.

Michalec received his Bachelor of Science in Accounting and a Minor in Criminal Justice from

Kean University in 2011.

Cohn has served as a

director since December 2, 2009.

Cohn founded EastSky Properties, LLC in June 2019 and L3C Capital Partners, LLC in June 2009, both

an investor in multi-family residential properties, and serves as a partner in both firms.

Cohn served as a director of investor relations

at IDT Corporation, a NYSE-listed telecommunications company, from September 2005 through May 2007.

Prior to joining IDT Corporation,

Cohn was a director of research at SAGEN Asset Management, an asset manager of funds of hedge funds, from January 2005 through May

Cohn began his career as an analyst in the funds-of-funds investment group of Millburn Ridgefield Corporation, where he worked

from 2001 through January 2005.

Our board believes Mr.

Cohn’s background at these

and other companies, particularly in areas of capital markets, financial, strategic and investment management experience, makes him an

effective member of our board of directors.

Ross has served as a director since March 24, 2011.

Ross co-founded and has since served as president

of Omniverter Inc., a company specializing in electrical power quality solutions for industrial producers and electrical utilities in

He has also served as the president of KIR Resources Inc.

Cohn’s background at these and other companies, particularly in areas of

capital markets, financial, strategic and investment management experience, makes him an effective member of our board of directors.

Ross has served as a director

since March 24, 2011.

Ross co-founded and has since served as president of Omniverter Inc., a company specializing in electrical

power quality solutions for industrial producers and electrical utilities in the United States and Canada.

He has also served as the president

of KIR Resources Inc.

and KIR Technologies Inc.

since 1999, companies engaged

in management consulting and import/export activities in the electrical equipment industry, respectively.

Ross previously held positions

in Canada as vice president technology with Schneider Canada, a specialist in energy management, and vice president of the distribution

products business at Federal Pioneer Ltd., now part of Schneider Canada.

since 1999, companies engaged in management consulting and import/export activities in

the electrical equipment industry, respectively.

Ross previously held positions in Canada as vice president technology with Schneider

Canada, a specialist in energy management, and vice president of the distribution products business at Federal Pioneer Ltd., now part

of Schneider Canada.

Previously, Mr.

Ross held a number of successive board level

positions in UK engineering companies, culminating in five years as managing director, Federal Electric, Ltd., before moving to Canada

in 1986 at the request of Federal Pioneer Ltd.

He received an MA in mechanical sciences (electrical and mechanical engineering) from

Cambridge University and subsequently qualified as an accountant ACMA.

Ross held a number of successive board level positions in UK engineering companies, culminating in

five years as managing director, Federal Electric, Ltd., before moving to Canada in 1986 at the request of Federal Pioneer Ltd.

an MA in mechanical sciences (electrical and mechanical engineering) from Cambridge University and subsequently qualified as an accountant

Our board of directors believes that Mr.

Ross’ relationships

and broad experience in the electrical transmission and distribution equipment industry will assist us in continuing to grow our business

and realizing our strategic goals.

Tesler has served as a director since December 2, 2009.

Tesler is President of LeaseProbe, LLC, a provider of

lease abstracting services, since he founded the company in 2004.

In 2008, LeaseProbe, LLC acquired Real Diligence, LLC, a provider of

financial due diligence services.

The combined company does business as Real Diligence and operates as an integrated outsourced provider

of legal and commercial due diligence services for the commercial real estate industry.

Ross’ relationships and broad experience in the electrical transmission and distribution

equipment industry will assist us in continuing to grow our business and realizing our strategic goals.

David Tesler .

Tesler has served

as a director since December 2, 2009.

Tesler is President of LeaseProbe, LLC, a provider of lease abstracting services, since he founded

the company in 2004.

In 2008, LeaseProbe, LLC acquired Real Diligence, LLC, a provider of financial due diligence services.

company does business as Real Diligence and operates as an integrated outsourced provider of legal and commercial due diligence services

for the commercial real estate industry.

Prior to 2004, Mr.

Tesler practiced law at Skadden

Arps Slate Meager & Flom LLP and at Jenkens & Gilchrist, Parker Chapin LLP.

Tesler received his BA from Yeshiva College,

an MA in medieval history from Bernard Revel Graduate School and a JD from Benjamin A.

Tesler practiced law at Skadden Arps Slate Meager & Flom LLP and at Jenkens

& Gilchrist, Parker Chapin LLP.

Tesler received his BA from Yeshiva College, an MA in medieval history from Bernard Revel Graduate

School and a JD from Benjamin A.

Cardozo School of Law.

Tesler brings extensive

legal, strategic and executive leadership experience to our board of directors.

Tulkoff has served as director since December 2, 2009.

Tulkoff began his career as a currency trader at Marc

Rich & Co, he then joined Forest City enterprises, a publicly traded real estate development company, and was a VP in the acquisition

and development division.

Tesler brings extensive legal, strategic and executive leadership experience

to our board of directors.

Jonathan Tulkoff.

Tulkoff has served

as director since December 2, 2009.

Tulkoff began his career as a currency trader at Marc Rich & Co, he then joined Forest City

enterprises, a publicly traded real estate development company, and was a VP in the acquisition and development division.

Tulkoff founded Commodity Asset Management, an industrial materials investment fund.

twenty years, Mr.

Tulkoff has been involved in trading, marketing and financing of physical commodities, with distinct expertise in ferrous

For the last twenty years, Mr.

Tulkoff has been involved

in trading, marketing and financing of physical commodities, with distinct expertise in ferrous metals.

Tulkoff is Series 3 licensed.

Our board of directors believes Mr.

Tulkoff’s extensive strategic, international and

executive leadership experience, particularly in commodity markets for metal products which represent one of the largest components of

our company’s cost of manufacture, make him an effective member of our board of directors.

Klink has served as a director since April 30, 2010.

Klink served as our chief financial officer, secretary and

treasurer from January 7, 2016 until April 15, 2020.

Since 1996, he has served in various positions at Jefferson Electric, Inc., including

as its chief executive officer, chief financial officer, vice president, treasurer, secretary and chairman of the board of directors.

Tulkoff’s extensive strategic, international and executive leadership experience, particularly

in commodity markets for metal products which represent one of the largest components of our company’s cost of manufacture, make

him an effective member of our board of directors.

Thomas Klink.

Klink has served as

a director since April 30, 2010 and has been employed as a consultant since January 1, 2024.

Klink served as our chief financial officer,

secretary and treasurer from January 7, 2016 until April 15, 2020.

Since 1996, he has served in various positions at Jefferson Electric,

Inc., including as its chief executive officer, chief financial officer, vice president, treasurer, secretary and chairman of the board

of directors.

Previously, from 1994 to 1996, Mr.

Klink served as a division controller at MagneTek, Inc., a company listed on NASDAQ at that time,

reporting to the corporate controller.

Klink served as a division controller at MagneTek, Inc., a company listed on Nasdaq at

that time, reporting to the corporate controller.

Klink also previously served as a controller for U.S.

Music Corporation, a manufacturer of

musical instruments from 1990 through 1994.

Music Corporation, a manufacturer

of musical instruments from 1990 through 1994.

Klink received his BBA in Accounting from the University of Wisconsin - Milwaukee in

1 unchanged sentence

equipment industry.

Klink is currently employed by Spire Power Solutions L.P.

as their CFO and President.

Whyte has served as a director since November 17, 2022.

Whyte has over 45 years of extensive experience in

the Electrical Power Distribution & Controls industries with an emphasis on manufacturing, sales and marketing.

Since July 31,

Whyte has been a consultant and served as President of Pioneer Custom Electrical Products Corp.

Klink is currently employed as a consultant for several businesses, supporting their accounting and integration

Kytchener Whyte.

Whyte has served

as a director since November 17, 2022.

Whyte has over 45 years of extensive experience in the Electrical Power Distribution &

Controls industries with an emphasis on manufacturing, sales and marketing.

Since July 31, 2015, Mr.

Whyte has been a consultant and served

as President of Pioneer Custom Electrical Products Corp.

Since January 2016, Mr.

Whyte has been President of Blue Mountain Industries, Inc., a consulting, electrical engineering and marketing consultancy firm

concentrating on the electrical utility, petrochemical and marine markets.

Whyte has been President of Blue Mountain Industries,

Inc., a consulting, electrical engineering and marketing consultancy firm concentrating on the electrical utility, petrochemical and marine

From 1999 to 2015, Mr.

Whyte was the President and owner

of Pacific Power Systems Integration Inc.

(“Pacific”), based in Southern California.

Whyte was the President and owner of Pacific, based in Southern California.

Pacific manufactured electrical

power distribution and control products such as its trailblazing Integrated Power Center units for applications in the petroleum,

refining, electric transit and utility industries.

Whyte served as General Manager for CGI, Inc., a manufacturer of Electrical

Power Distribution and Controls products from 1993 to 1999.

power distribution and control products such as its trailblazing IPC units for applications in the petroleum, refining, electric transit

and utility industries.

Whyte served as General Manager for CGI, Inc., a manufacturer of Electrical Power Distribution and Controls

products from 1993 to 1999.

Prior to his time at CGI, Inc., Mr.

Whyte was the Vice President for

Electrical Power Products between 1985 and 1993.

Whyte was the Vice President for Electrical Power Products between 1985

A native of Jamaica, Mr.

Whyte is a graduate of Prospect College in St.

Jamaica, and a graduate of Los Angeles Trade Technical College.

Whyte is a United States Air Force Vietnam era veteran, a

private pilot and the builder of experimental aircrafts.

With his many years of experience in manufacturing, sales, marketing,

product design and implementation, Mr.

Whyte brings to the board invaluable insights and expertise, and the ability to turn problems

into opportunities.

The board of directors believes that the overall experience and knowledge

of the members of the board of directors will contribute to the overall success of our business.

Relationships

are no family relationships among any of our directors and executive officers.

Mazurek is a party to a certain agreement related

to his service as an executive officer and director described in the “Agreements with Executive Officers” section of Item

Section 16(a) Reports

16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and officers, and persons who own more than ten percent

of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock.

officers and persons who own more than ten percent of our common stock are required by SEC regulations to furnish us with copies of all

Section 16(a) forms they file.

our knowledge, based solely on a review of the copies of such reports furnished to us, during the fiscal year ended December 31, 2022,

each of our directors, officers and greater than ten percent stockholders complied with all Section 16(a) filing requirements applicable

to our directors, officers and greater than ten percent stockholders, except for the following reporting persons:

Form 4 was filed late for Mr.

Cohn with respect to one transaction;

● One Form 4 was filed late for Mr.

Tesler with respect to three transactions.

Mary, Jamaica, and a graduate of Los Angeles Trade Technical

Whyte is a United States Air Force Vietnam era veteran, a private pilot and the builder of experimental aircrafts.

many years of experience in manufacturing, sales, marketing, product design and implementation, Mr.

Whyte brings to the board invaluable

insights and expertise, and the ability to turn problems into opportunities.

The board of directors believes that the overall experience

and knowledge of the members of the board of directors will contribute to the overall success of our business.

Family Relationships

There are no family relationships among any

of our directors and executive officers.

Mazurek is a party to a certain agreement related to his service as an executive officer

and director described in the “Agreements with Executive Officers” section of Item 11.

Michalec is a party to a certain

agreement related to his service as an executive officer described in the “Agreements with Executive Officers” section of

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934,

as amended, requires our directors and officers, and persons who own more than ten percent of our common stock, to file with the SEC initial

reports of ownership and reports of changes in ownership of our common stock.

Directors, officers and persons who own more than ten percent

of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the

copies of such reports furnished to us, during the fiscal year ended December 31, 2023, each of our directors, officers and greater than

ten percent stockholders complied with all Section 16(a) filing requirements applicable to our directors, officers and greater than ten

percent stockholders, except for the following reporting persons:

4 was filed late for Mr.

Mazurek with respect to one transaction;

4 was filed late for Mr.

Michalec with respect to one transaction;

4 was filed late for Mr.

Whyte with respect to one transaction

Board Committees

board of directors currently has three standing committees:

the audit committee, the nominating and corporate governance committee, and

the compensation committee, each of which is described below.

All standing committees operate under a charter that has been approved

by the board of directors.

Our board of directors established an audit committee on March 24, 2011, which has the composition and responsibilities

described below.

audit committee consists of Messrs.

Cohn, Ross and Tulkoff, each of whom our board of directors has determined to be financially literate

and qualify as an independent director under Section 5605(a)(2) of the rules of the Nasdaq Stock Market.

Our board of directors currently has three standing

the audit committee, the nominating and corporate governance committee, and the compensation committee, each of which is described

All standing committees operate under a charter that has been approved by the board of directors.

Audit Committee .

board of directors established an audit committee on March 24, 2011, which has the composition and responsibilities described below.

The audit committee consists

Cohn, Ross and Tulkoff, each of whom our board of directors has determined to be financially literate and qualify as an independent

director under Section 5605(a)(2) of the rules of the Nasdaq Stock Market.

In addition, Mr.

chairman of the audit committee and has been determined by our board of directors to be a financial expert as defined in Item 407(d)(5)(ii)

of Regulation S-K.

The audit committee’s duties are to recommend to our board of directors the engagement of independent auditors

to audit our financial statements and to review our accounting and auditing principles.

The audit committee reviews the scope, timing

and fees for the annual audit and the results of audit examinations performed by internal auditors and independent public accountants,

including their recommendations to improve the system of accounting and internal controls.

The audit committee held a total of four meetings

during the fiscal year ended December 31, 2022.

audit committee operates under a formal charter adopted by the board of directors that governs its duties and conduct.

Copies of the

charter can be obtained free of charge from the Company’s web site, www.pioneerpowersolutions.com, by contacting the Company by

mail at the address appearing on the first page of this Annual Report on Form 10-K to the attention of Investor Relations, or by telephone

at (212) 867-0700.

Ross is the chairman of the audit committee

and has been determined by our board of directors to be a financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K.

committee’s duties are to recommend to our board of directors the engagement of independent auditors to audit our consolidated financial

statements and to review our accounting and auditing principles.

The audit committee reviews the scope, timing and fees for the annual

audit and the results of audit examinations performed by internal auditors and independent public accountants, including their recommendations

to improve the system of accounting and internal controls.

The audit committee held a total of four meetings during the fiscal year ended

December 31, 2023.

The audit committee operates

under a formal charter adopted by the board of directors that governs its duties and conduct.

Copies of the charter can be obtained free

of charge from the Company’s web site, www.pioneerpowersolutions.com, by contacting the Company by mail at the address appearing

on the first page of this Annual Report on Form 10-K to the attention of Investor Relations, or by telephone at (212) 867-0700.

Compensation Committee.

On January 18, 2022, the board of directors designated a compensation committee (the “compensation committee”).

Our compensation committee is composed of Messrs.

Tessler and Cohn, each of whom our board of directors has determined to qualify as

an independent director under Section 5605(a)(2) of the rules of the Nasdaq Stock Market.

Pursuant to its charter, the compensation committee

shall be comprised of at least two (2) “independent” members of the board of directors who shall also satisfy such other

criteria imposed on members of the compensation committee pursuant to the federal securities laws and the rules and regulations of the

SEC and the Nasdaq Stock Market.

The compensation committee’s duties are to discharge the responsibilities of the board of directors

relating to compensation of the Company’s directors and executive officers, to assist the board of directors in establishing appropriate

incentive compensation and equity-based plans and to administer such plans, to oversee the annual process of evaluation of the performance

of the Company’s management, and to perform such other duties and responsibilities as enumerated in and consistent with its charter.

The compensation committee may designate one or more subcommittees, each subcommittee to consist of at least two members of the compensation

Any such subcommittee, to the extent provided in the resolutions of the compensation committee and to the extent not limited

by applicable law, shall have and may exercise all the powers and authority of the compensation committee.

Our compensation

committee is composed of Messrs.

Tessler and Cohn, each of whom our board of directors has determined to qualify as an independent director

under Section 5605(a)(2) of the rules of the Nasdaq Stock Market.

Pursuant to its charter, the compensation committee shall be comprised

of at least two (2) “independent” members of the board of directors who shall also satisfy such other criteria imposed on

members of the compensation committee pursuant to the federal securities laws and the rules and regulations of the SEC and the Nasdaq

Stock Market.

The compensation committee’s duties are to discharge the responsibilities of the board of directors relating to compensation

of the Company’s directors and executive officers, to assist the board of directors in establishing appropriate incentive compensation

and equity-based plans and to administer such plans, to oversee the annual process of evaluation of the performance of the Company’s

management, and to perform such other duties and responsibilities as enumerated in and consistent with its charter.

The compensation committee

has authority to retain or obtain the advice of compensation consultants, legal counsel, experts and other advisors as the compensation

committee may deem appropriate in its sole discretion.

The compensation committee is directly responsible for the appointment, compensation

and oversight of its consultants, legal counsel, experts and advisors and has sole authority to approve their fees and retention terms,

and the Company will provide funding for such fees and related expenses.

Our compensation committee has not retained the services of

any compensation consultants.

The compensation committee held a total of two meetings during the fiscal year ended December 31, 2022.

compensation committee operates under a formal charter adopted by the board of directors that governs its duties and conduct.

of the charter can be obtained free of charge by contacting the Company by mail at the address appearing on the first page of this Annual

Report on Form 10-K to the attention of Investor Relations, or by telephone at (212) 867-0700.

On January 18, 2022, the board of directors designated a nominating and corporate governance committee (the “nominating

may designate one or more subcommittees, each subcommittee to consist of at least two members of the compensation committee.

subcommittee, to the extent provided in the resolutions of the compensation committee and to the extent not limited by applicable law,

shall have and may exercise all the powers and authority of the compensation committee.

The compensation committee has authority to retain

or obtain the advice of compensation consultants, legal counsel, experts and other advisors as the compensation committee may deem appropriate

in its sole discretion.

The compensation committee is directly responsible for the appointment, compensation and oversight of its consultants,

legal counsel, experts and advisors and has sole authority to approve their fees and retention terms, and the Company will provide funding

for such fees and related expenses.

Our compensation committee has not retained the services of any compensation consultants.

The compensation

committee held a total of two meetings during the fiscal year ended December 31, 2023.

The compensation committee operates under a

formal charter adopted by the board of directors that governs its duties and conduct.

Copies of the charter can be obtained free of charge

by contacting the Company by mail at the address appearing on the first page of this Annual Report on Form 10-K to the attention of Investor

Relations, or by telephone at (212) 867-0700.

Nominating Committee.

On January 18, 2022, the board of directors designated a nominating and corporate governance committee (the “nominating committee”).

Our nominating committee is composed of Messrs.

Tessler and Tulkoff, each of whom our board of directors has determined

to qualify as an independent director under Section 5605(a)(2) of the rules of the Nasdaq Stock Market.

Pursuant to its charter, the

nominating committee shall be comprised of at least two (2) “independent” members of the board of directors who shall also

satisfy such other criteria imposed on members of the nominating committee pursuant to the federal securities laws and the rules and

regulations of the SEC and the Nasdaq Stock Market.

The nominating committee’s duties are to assist the board of directors by identifying

potential qualified nominees for director and recommend to the board of directors for nomination candidates for the board of directors,

developing the Company’s corporate governance guidelines and additional corporate governance policies, exercising such other powers

and authority as are set forth in the charter of the nominating committee and exercising such other powers and authority as shall from

time to time be assigned to such committee by resolution of the board of directors.

The nominating committee held a total of three meetings

during the fiscal year ended December 31, 2022.

Tessler and Tulkoff, each of whom our board of directors has determined to qualify as

an independent director under Section 5605(a)(2) of the rules of the Nasdaq Stock Market.

Pursuant to its charter, the nominating committee

shall be comprised of at least two (2) “independent” members of the board of directors who shall also satisfy such other criteria

imposed on members of the nominating committee pursuant to the federal securities laws and the rules and regulations of the SEC and the

Nasdaq Stock Market.

The nominating committee’s duties are to assist the board of directors by identifying potential qualified nominees

for director and recommend to the board of directors for nomination candidates for the board of directors, developing the Company’s

corporate governance guidelines and additional corporate governance policies, exercising such other powers and authority as are set forth

in the charter of the nominating committee and exercising such other powers and authority as shall from time to time be assigned to such

committee by resolution of the board of directors.

The nominating committee held a total of two meetings during the fiscal year ended

December 31, 2023.

The nominating committee operates under a formal charter adopted by the board of directors that governs its duties and conduct.

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Report on Form 10-K to the attention of Investor Relations, or by telephone at (212) 867-0700.

of Business Conduct and Ethics

have adopted a code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive

officer and principal financial and accounting officer, which is posted on our website at www.pioneerpowersolutions.com.

disclose future amendments to certain provisions of the code of ethics, or waivers of such provisions granted to executive officers and

directors, on this website within four business days following the date of such amendment or waiver.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics

that applies to our directors, officers, and employees, including our principal executive officer and principal financial and accounting

officer, which is posted on our website at www.pioneerpowersolutions.com.

We intend to disclose future amendments to certain provisions

of the code of ethics, or waivers of such provisions granted to executive officers and directors, on this website within four business

days following the date of such amendment or waiver.

EXECUTIVE COMPENSATION

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and reward executives whose experience and skills are critical to our success;

the interests of our executive officers and other key employees with those of our stockholders

by motivating our executive officers and other key employees to increase stockholder value.

We appointed a compensation committee in January 2022 when we no longer qualified as a “controlled company” under the corporate

the interests of our executive officers and other key employees with those of our stockholders by motivating our executive officers

and other key employees to increase stockholder value.

appointed a compensation committee in January 2022 when we no longer qualified as a “controlled company” under the corporate

governance rules of the Nasdaq Stock Market.

We did not engage any compensation consultants to determine or recommend the amount and form

of executive and director compensation during and for the year ended December 31, 2022.

At this time, our compensation committee has,

and previously our board of directors had, determined that the financial and administrative burden of engaging compensation consultants

We did not engage any compensation consultants to determine or recommend the amount and

form of executive and director compensation during and for the year ended December 31, 2023.

At this time, our compensation committee

has, and previously our board of directors had, determined that the financial and administrative burden of engaging compensation consultants

is not justified in light of our Company’s size, its resources and our relatively small number of executive officers and directors.

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program will be developed and presented each year by our compensation committee to the board of directors for its consideration and approval.

adopted a Clawback Policy on November 9, 2023, as an additional safeguard to mitigate compensation risks.

The Clawback Policy is attached

as Exhibit 97.1 to this Annual Report.

Compensation Table

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Mazurek, our chief executive officer, president and chairman of the board of directors, and (ii) Walter Michalec, our chief financial

officer, secretary and treasurer from May 16, 2021, and prior to that, our interim chief financial officer, secretary and treasurer from

April 15, 2020 to May 15, 2021, whom we refer to collectively herein as the “named executive officers.”

Name and Principal Position

President, Chief Executive Officer, Chairman of the Board of Directors

Walter Michalec (ii)

Chief Financial Officer, Secretary, and Treasurer

represent the aggregate grant date fair value, as determined in accordance with FASB ASC

Topic 718, with the exception that the amounts shown assume no forfeitures.

The assumptions

used to calculate the value of share based awards are set forth in “Item 8.

officer, secretary and treasurer from May 16, 2021, whom we refer to collectively herein as the “named executive officers.”

and principal position

Chief Executive Officer, Chairman of the Board of Directors

Michalec (ii)

Financial Officer, Secretary, and Treasurer

represent the aggregate grant date fair value, as determined in accordance with FASB ASC Topic 718, with the exception that the amounts

shown assume no forfeitures.

The assumptions used to calculate the value of share-based awards are set forth in “Item 8.

Statements and Supplementary Data – Note 12.

Stock-Based Compensation” contained

in this Annual Report.

These amounts do not represent the actual value that may be realized

by our named executive officers, as that is dependent on the long-term appreciation in our

common stock.

(2) Comprised

Stock-Based Compensation” contained in this Annual Report.

These amounts

do not represent the actual value that may be realized by our named executive officers, as that is dependent on the long-term appreciation

in our common stock.

of board of directors meeting fees.

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31, 2023, and $590,500, for the period beginning on January 1, 2024 and ending on December 31, 2024.

December 26, 2023, the Company and Mr.

Mazurek entered into a fifth amendment in order to (i) extend the termination date of the Mazurek

Agreement from December 31, 2024 to December 31, 2026, and (ii) adjust Mr.

Mazurek’s annual base salary at $650,500, for the period

beginning on January 1, 2024 and ending on December 31, 2024, $675,500, for the period beginning on January 1, 2025 and ending on December

31, 2025, and $700,500, for the period beginning on January 1, 2026 and ending on December 31, 2026.

Mazurek is terminated without cause, he is entitled to receive (i) any unpaid base salary accrued through the date of his termination,

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notice from the Company of such breach specifying the details thereof.

connection with his employment agreement, we granted Mr.

Mazurek an award of restricted stock units (“RSUs”) under the 2021

Pioneer Power Solutions, Inc.

Long-Term Incentive Plan (as amended, the “2021 Plan”) covering 100,000 shares of the Company’s

common stock, with such RSUs being subject to the terms and conditions of the 2021 Plan and a Restricted Stock Unit Award Agreement,

which agreement provided, among other things, that (a) the RSUs shall vest as of the date of grant, and (b) such vested RSUs shall be

converted into shares of the Company’s common stock no later than March 15, 2024.

The award had a grant date fair value of $575,000.

In connection with the vesting of the RSUs, we paid on Mr.

Mazurek’s behalf an aggregate amount of $272,829.32 to satisfy his income

and payroll tax obligations, to be reimbursed from payroll withholding.

On September 20, 2023, we and Mr.

Mazurek entered into a letter

agreement pursuant to which Mr.

Mazurek agreed to surrender and cancel 44,363 shares of common stock issued to him upon settlement of

his vested RSUs, in order to reimburse us for the tax payment we made on his behalf.

Upon the surrender and cancellation of the shares,

we were fully reimbursed.

See “ Part III.

Item 13 - Certain Related Transactions and Relationships ”.

Michalec was appointed by our board of directors to act as the Interim Chief Financial Officer of us, effective as of April 15, 2020,

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title of Chief Financial Officer and removed the title of Interim Chief Financial Officer, effective May 16, 2021.

Michalec also serves

as our principal accounting officer, principal financial officer, treasurer and secretary.

On April 25, 2022, we and Mr.

Michalec also

serves as our principal accounting officer, principal financial officer, treasurer and secretary.

April 25, 2022, we and Mr.

Michalec entered into an employment agreement under which we agreed to employ Mr.

Michalec as its Chief

Financial Officer, Secretary and Treasurer for a term of three (3) years, commencing on January 1, 2022 and ending on December 31, 2024,

unless such employment is terminated earlier in accordance with the agreement.

Michalec is entitled to an annualized base salary at

a rate of $200,000 per annum for the period of January 1, 2022 through December 31, 2022, $220,000 per annum for the period of January

Michalec as its Chief Financial

Officer, Secretary and Treasurer for a term of three (3) years, commencing on January 1, 2022 and ending on December 31, 2024, unless

such employment is terminated earlier in accordance with the agreement.

Michalec is entitled to an annualized base salary at a rate

of $200,000 per annum for the period of January 1, 2022 through December 31, 2022, $220,000 per annum for the period of January 1, 2023

through December 31, 2023, and $240,000 per annum for the period of January 1, 2023 through the end of the employment period.

Michalec’s employment may be terminated upon his death or disability, upon the occurrence of certain events that constitute

“cause,” and without cause.

employment may be terminated upon his death or disability, upon the occurrence of certain events that constitute “cause,”

and without cause.

If terminated without cause, Mr.

Michalec will be entitled to receive as severance an amount equal

to his base salary for the remainder of the employment period under the agreement.

In connection with his employment agreement,

we granted Mr.

Michalec an award of restricted stock units (“RSUs”) under the 2021 Pioneer Power Solutions, Inc.

Long-Term Incentive Plan (the “Plan”), covering 375,000 shares of our common stock, with such RSUs being subject to the

terms and conditions of the Plan and a Restricted Stock Unit Award Agreement, which agreement provided, among other things, that (a)

the RSUs shall vest in three equal installments on each of May 1st of 2022, 2023, and 2024, provided that Mr.

Michalec has remained

continuously employed by us through the applicable vesting date, and (b) such vested RSUs shall be converted into shares of our

common stock no later than March 15th of the calendar year following the calendar year in which such RSUs vested.

The award had a

grant date fair value of $1,631,250, which will be recognized over the vesting period.

We paid withholding taxes on behalf of Mr.

Michalec in connection with the grant, which we are getting repaid through payroll deductions.

See the section titled “Certain

Related Transactions and Relationships” under Item 13.

Michalec will be entitled to receive as severance an amount equal to his base salary

for the remainder of the employment period under the agreement.

December 26, 2023, the Company and Mr.

Michalec entered into a first amendment in order to (i) extend the termination date of the Michalec

Agreement from December 31, 2023 to December 31, 2026, and (ii) adjust Mr.

Michalec’s annual base salary at $300,000, for the period

beginning on January 1, 2024 and ending on December 31, 2024, $325,000, for the period beginning on January 1, 2025 and ending on December

31, 2025, and $350,000, for the period beginning on January 1, 2026 and ending on December 31, 2026.

connection with the employment agreement entered into between the Company and Mr.

Michalec, effective April 25, 2022, the Company granted

Michalec an award of RSUs under the 2021 Plan pursuant to that certain Restricted Stock Unit Award Agreement (the “RSU Award”)

covering 375,000 shares of the Company’s common stock, vesting in three equal installments on each of May 1st of 2022, 2023, and

In connection with the vesting of the RSUs, we paid on Mr.

Michalec’s behalf an aggregate amount of $481,220.28 to satisfy

his income and payroll tax obligations, to be reimbursed from payroll withholding, and the Company had been reimbursed $34,000.00 from

payroll withholding as of September 20, 2023.

On September 20, 2023, we and Mr.

Michalec entered into a letter agreement pursuant to

Michalec agreed to surrender and cancel 72,719 shares of common stock issued to him upon settlement of his vested RSUs, in

order to reimburse us for the remaining amount of the tax payment we made on his behalf.

Upon the surrender and cancellation of the shares,

we were fully reimbursed.

See “ Part III.

Item 13 - Certain Related Transactions and Relationships ”.

addition, on September 20, 2023, Mr.

Michalec’s RSU Award was amended to provide that his future tax withholding obligations in

connection with the RSU Award can be satisfied, among others, by us withholding the shares to be delivered upon conversion of the RSUs

having an aggregate fair market value that equals the required tax withholding payment, in our sole discretion.

June 7, 2024, Mr.

Michalec surrendered 57,541 shares of common stock issued to him upon settlement of his vested RSUs to satisfy tax withholding

The shares were cancelled and retired by the Company.

See “ Part III.

Item 13 - Certain Related Transactions and Relationships ”.

Equity Awards at Fiscal Year End

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Option Awards

Unexercisable

u nexercisable

Walter Michalec

stock options granted for service as a president.

Vests in equal annual installments upon each of the first three anniversaries of

the grant date.

stock options granted for service prior to becoming an executive officer.

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Vests on the first anniversary of the grant date.

stock that have

incentive plan

shares, units or

rights that have not

incentive plan

market or payout

of unearned shares,

or other rights that

Number of shares

or units of stock that have not vested

Market value of shares

or units of stock that have not

Equity incentive plan awards:

number of unearned shares, units or other

rights that have not vested

Equity incentive plan awards:

market or payout value of unearned shares, units

or other rights that have not vested

Walter Michalec

and Warrant Exercises

the year ended December 31, 2022, Nathan J.

Mazurek exercised an option to purchase 1,000 shares of common stock at an exercise price

of $4.11 per share.

the year ended December 31, 2023, there were no options or warrants exercised by any of our named executive officers.

of Control Agreements

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The 2011 Plan allowed for the granting of incentive stock options, non-qualified stock options, stock appreciation rights,

restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which could have been granted singly,

in combination, or in tandem, and upon such terms as were determined by the board or a committee of the board that was designated to administer

the 2011 Plan.

Subject to certain adjustments, the maximum number of shares of the Company’s common stock that could have been delivered

pursuant to awards under the 2011 Plan is 700,000 shares.

As of December 31, 2022, there were no shares available for future grants under

the Company’s 2011 Plan.

The 2011 Plan expired on May 11, 2021, but any awards granted prior to May 11, 2021 that are still outstanding

are subject to the 2011 Plan.

restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which could have been granted

singly, in combination, or in tandem, and upon such terms as were determined by the board or a committee of the board that was designated

to administer the 2011 Plan.

Subject to certain adjustments, the maximum number of shares of the Company’s common stock that could

have been delivered pursuant to awards under the 2011 Plan is 700,000 shares.

As of December 31, 2023, there were no shares available

for future grants under the Company’s 2011 Plan.

The 2011 Plan expired on May 11, 2021, but any awards granted prior to May 11,

2021 that are still outstanding are subject to the 2011 Plan.

Long-Term Incentive Plan

On October 13, 2021, our board of directors adopted

the 2021 Long-Term Incentive Plan (the “2021 Plan”), subject to stockholder approval, which was obtained on November 11, 2021.

October 13, 2021, our board of directors adopted the 2021 Plan, subject to stockholder approval, which was obtained on November 11, 2021.

The 2021 Plan supplemented the 2011 Plan, which expired on May 11, 2021, and which replaced and superseded the 2009 Plan, as noted above.

Our outside directors and our employees, including the principal executive officer, principal financial officer and other named executive

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The 2021 Plan allows for the granting of incentive

stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend

equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and upon such terms as are determined

stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards,

dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and upon such terms as are determined

by the Board or a committee of the board that is designated to administer the 2021 Plan.

Subject to certain adjustments, the maximum number

of shares of the Company’s common stock that may be delivered pursuant to awards under the 2021 Plan is 900,000 shares.

As of December

31, 2022, there were 498,000 shares available for future grants under the Company’s 2021 Plan.

The 2021 Plan was initially administered

by our board of directors, but it has been administered by the compensation committee following the creation of such committee in the

first quarter of 2022.

Subject to certain adjustments, the maximum

number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2021 Plan is 900,000 shares plus

any increase by any Prior Plan Awards (as defined in the 2021 Plan) eligible for reuse, of which one hundred percent (100%) may be delivered

pursuant to incentive stock options.

As of December 31, 2023, there were 347,500 shares available for future grants under the Company’s

The 2021 Plan was initially administered by our board of directors, but it has been administered by the compensation committee

following the creation of such committee in the first quarter of 2022.

Compensation Plan Information

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securities are authorized for issuance:

Number of securities

upon exercise of

outstanding options,

warrants and rights

Weighted average

exercise price of outstanding

Number of securities remaining

available for future

issuance under

equity compensation plans

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans

Equity compensation plans approved by security holders

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Kytchener Whyte (11)

(1) Comprised

of board of directors and audit committee meeting fees.

(2) Comprised

of board of directors meeting fees.

(3) Comprised

of board of directors, compensation and nominating and governance committee meeting fees.

(4) Comprised

of board of directors, audit and compensation committee meeting fees.

(5) Comprised

of board of directors, audit and nominating and governance committee meeting fees.

of December 31, 2023, Mr.

Klink had outstanding options representing the right to purchase

119,000 shares of our common stock and outstanding stock awards of 1,500 shares of our common

Klink had outstanding options representing the right to purchase 126,500 shares of our common stock.

of December 31, 2023, Mr.

Cohn had outstanding options representing the right to purchase

26,000 shares of our common stock and outstanding stock awards of 1,500 shares of our common

Cohn had outstanding options representing the right to purchase 36,500 shares of our common stock.

of December 31, 2023, Mr.

Ross had outstanding options representing the right to purchase

26,000 shares of our common stock and outstanding stock awards of 1,500 shares of our common

Ross had outstanding options representing the right to purchase 36,500 shares of our common stock.

of December 31, 2023, Mr.

Tesler had outstanding options representing the right to purchase

15,000 shares of our common stock and outstanding stock awards of 1,500 shares of our common

Tesler had outstanding options representing the right to purchase 25,500 shares of our common stock.

of December 31, 2023, Mr.

Tulkoff had outstanding options representing the right to purchase

26,000 shares of our common stock and outstanding stock awards of 1,500 shares of our common

Whyte began serving as a director in November 2022 and

did not receive any director compensation during the year ended December 31, 2022.

Tulkoff had outstanding options representing the right to purchase 36,500 shares of our common stock.

of December 31, 2023, Mr.

Whyte had outstanding options representing the right to purchase 25,000 shares of our common stock.

represent the aggregate grant date fair value, as determined in accordance with FASB ASC Topic 718, with the exception that the amounts

shown assume no forfeitures.

The assumptions used to calculate the value of share-based awards are set forth in “Item 8.

Statements and Supplementary Data – Note 12.

Stock-Based Compensation” contained in this Annual Report.

These amounts

do not represent the actual value that may be realized by our directors, as that is dependent on the long-term appreciation in our

common stock.

of our directors, including our employee directors, are paid cash compensation in connection with their attendance at the meetings of

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and governance committee and compensation committee for the year ended December 31, 2023.

Whyte, a current director, entered into a consulting agreement with PCEP as the sole stockholder and president

of Pacific, pursuant to which he agreed to provide service and consultation with respect to the business and operations of PCEP and its

affiliates, as may be requested from time to time by PCEP.

See the section titled “Certain Related Transactions and Relationships”

under Item 13.

Whyte, a current director, entered into a consulting agreement with PCEP as the sole stockholder and president of Pacific, pursuant to

which he agreed to provide service and consultation with respect to the business and operations of PCEP and its affiliates, as may be

requested from time to time by PCEP.

See “ Part III.

Item 13 - Certain Related Transactions and Relationships ”.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

following table sets forth information with respect to the beneficial ownership of our common stock as of April 11, 2023 by:

following table sets forth information with respect to the beneficial ownership of our common stock as of July 25, 2024 by:

person known by us to beneficially own more than 5.0% of our common stock;

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New Jersey 07024.

As of April 11, 2023, we had 9,767,545 shares outstanding.

As of July 25, 2024, we had 10,917,038 shares outstanding.

Number of shares

Name of beneficial owner

Officers and Directors

Named Executive Officers and Directors

2,239,663 (2)

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represents ownership of less than 1%.

of common stock beneficially owned and the respective percentages of beneficial ownership

of common stock assumes the exercise of all options, warrants and other securities convertible

into common stock beneficially owned by such person or entity currently exercisable or exercisable

within 60 days of April 11, 2023.

Shares issuable pursuant to the exercise of stock options

and warrants exercisable within 60 days are deemed outstanding and held by the holder of

such options or warrants for computing the percentage of outstanding common stock beneficially

owned by such person, but are not deemed outstanding for computing the percentage of outstanding

common stock beneficially owned by any other person.

1,900,859 shares of common stock and 263,167 shares subject to stock options which are exercisable

within 60 days of April 11, 2023.

114,000 shares of common stock and 116,500 shares subject to stock options which are exercisable

within 60 days of April 11, 2023.

125,000 fully vested restricted stock units and 69,000 shares subject to stock options which

are exercisable within 60 days of April 11, 2023.

11,000 shares of common stock and 26,500 shares subject to stock options which are exercisable

within 60 days of April 11, 2023.

15,750 shares of common stock and 15,500 shares subject to stock options which are exercisable

within 60 days of April 11, 2023.

1,000 shares of common stock and 26,500 shares subject to stock options which are exercisable

within 60 days of April 11, 2023.

15,000 shares subject to stock options which are exercisable within 60 days of April 11, 2023.

of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assumes the exercise of

all options, warrants and other securities convertible into common stock beneficially owned by such person or entity currently exercisable

or exercisable within 60 days of July 25, 2024.

Shares issuable pursuant to the exercise of stock options and warrants exercisable

within 60 days are deemed outstanding and held by the holder of such options or warrants for computing the percentage of outstanding

common stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding common

stock beneficially owned by any other person.

1,966,496 shares of common stock and 273,167 shares subject to stock options which are exercisable within 60 days of July 25,

114,000 shares of common stock and 126,500 shares subject to stock options which are exercisable within 60 days of July 25, 2024.

244,740 shares of common stock and 69,000 shares subject to stock options which are exercisable within 60 days of July 25, 2024.

11,000 shares of common stock and 36,500 shares subject to stock options which are exercisable within 60 days of July 25, 2024.

15,750 shares of common stock and 25,500 shares subject to stock options which are exercisable within 60 days of July 25, 2024.

1,000 shares of common stock and 36,500 shares subject to stock options which are exercisable within 60 days of July 25, 2024.

25,000 shares subject to stock options which are exercisable within 60 days of July 25, 2024.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

9 unchanged sentences

any related party transactions pursuant to its charter.

In connection with the employment agreement

entered into between the Company and Mr.

Michalec, effective April 25, 2022, the Company granted Mr.

Michalec an award of RSUs under the

2021 Plan covering 375,000 shares of the Company’s common stock.

In connection with the RSU grant, we paid on Mr.

behalf an aggregate amount of $129 in withholding taxes.

Michalec agreed that Mr.

Michalec would reimburse us through payroll

deductions until we are fully reimbursed.

As of the date of this report, we have been reimbursed $12 of the total $129 owed.

On July 31, 2015, Pacific and PCEP, entered

into an Asset Purchase Agreement for the purchase and sale of substantially all of the assets of Pacific (the “Transaction”).

In connection with the Transaction, Kytchener Whyte, a current director, entered into a consulting agreement with PCEP as the sole stockholder

and president of Pacific, pursuant to which he agreed to provide service and consultation with respect to the business and operations

of PCEP and its affiliates, as may be requested from time to time by PCEP (the “Consulting Agreement”).

Kytchener Whyte has

remained a consultant of PCEP since July 31, 2015.

The initial term ended on July 31, 2017, and which has been renewed annually thereafter.

The Consulting Agreement automatically renews unless either party gives written notice of termination to the other party at least thirty

days prior to the expiration of the renewal term thereof.

In consideration for the consulting services Kytchener Whyte performs as a consultant

of PCEP, he receives a monthly consulting fee of $17, as well as a 4% commission payments for product sales generated by new customer

connection with the employment agreement entered into between the Company and Mr.

Michalec, effective April 25, 2022, the Company granted

Michalec an award of RSUs under the 2021 Plan pursuant to that certain RSU Award covering 375,000 shares of the Company’s common

stock, vesting in three equal installments on each of May 1st of 2022, 2023, and 2024.

In connection with the vesting of the RSUs, we

Michalec’s behalf an aggregate amount of $481 to satisfy his income and payroll tax obligations, to be reimbursed from

payroll withholding, and the Company had been reimbursed $34 from payroll withholding as of September 20, 2023.

On September 20, 2023,

Michalec entered into a letter agreement pursuant to which Mr.

Michalec agreed to surrender and cancel 72,719 shares of common

stock issued to him upon settlement of his vested RSUs, in order to reimburse us for the remaining amount of the tax payment we made

on his behalf.

Upon the surrender and cancellation of the shares, we were fully reimbursed.

addition, on September 20, 2023, Mr.

Michalec’s RSU Award was amended to provide that his future tax withholding obligations in

connection with the RSU Award can be satisfied, among others, by us withholding the shares to be delivered upon conversion of the RSUs

having an aggregate fair market value that equals the required tax withholding payment, in our sole discretion.

On June 7, 2024, Mr.

Michalec surrendered 57,541 shares of common stock issued to him upon settlement of his vested RSUs to satisfy tax withholding

The shares were cancelled and retired by the Company.

May 16, 2023, the Company granted Mr.

Mazurek an award of RSUs under the 2021 Plan covering 100,000 shares of the Company’s common

In connection with the vesting of the RSUs, we paid on Mr.

Mazurek’s behalf an aggregate amount of $273 to satisfy his income

and payroll tax obligations, to be reimbursed from payroll withholding, which had not yet occurred.

On September 20, 2023, we and Mr.

Mazurek entered into a letter agreement pursuant to which Mr.

Mazurek agreed to surrender and cancel 44,363 shares of common stock issued

to him upon settlement of his vested RSUs, in order to reimburse us for the tax payment we made on his behalf.

Upon the surrender and

cancellation of the shares, we were fully reimbursed.

July 31, 2015, Pacific and PCEP entered into an Asset Purchase Agreement for the purchase and sale of substantially all of the assets

of Pacific (the “Transaction”).

In connection with the Transaction, Kytchener Whyte, a current director, entered into a consulting

agreement with PCEP as the sole stockholder and president of Pacific, pursuant to which he agreed to provide service and consultation

with respect to the business and operations of PCEP and its affiliates, as may be requested from time to time by PCEP (the “Whyte

Consulting Agreement”).

Whyte has remained a consultant of PCEP since July 31, 2015.

The initial term ended on July 31, 2017,

and which has been renewed annually thereafter.

In consideration for the consulting services Mr.

Whyte performs as a consultant of PCEP,

he originally received a monthly consulting fee of $17, as well as a 4% commission payment for product sales generated by new customer

accounts solicited by him, through his solely owned personal business Blue Mountain Industries, Inc.

Pursuant to the consulting agreement,

for the fiscal years ended December 31, 2021 and December 31, 2020, the Company paid Blue Mountain Industries, Inc.

an aggregate amount

of $423 and $317, respectively.

During the fiscal year ending December 31, 2022, Kytchener Whyte has received an aggregate amount of $400.

board of directors has determined that each of Yossi Cohn, Ian Ross, David Tesler, and Jonathan Tulkoff satisfy the requirements for

independence set out in Section 5605(a)(2) of the Nasdaq Stock Market Rules and that each of these directors has no material relationship

Effective January 1, 2023, Mr.

monthly consulting fee was reduced to $5 with a 2% commission payment.

Pursuant to the Whyte Consulting Agreement, for the fiscal years

ended December 31, 2023, and December 31, 2022, the Company paid Blue Mountain Industries, Inc.

an aggregate amount of $272 and $400,

respectively.

During the fiscal year ended December 31, 2023, Blue Mountain Industries, Inc.

received an additional $12 for board of

directors meeting fees.

board of directors has determined that each of Yossi Cohn, Ian Ross, David Tesler, Thomas Klink and Jonathan Tulkoff satisfy the requirements

for independence set out in Section 5605(a)(2) of the Nasdaq Stock Market Rules and that each of these directors has no material relationship

with us (other than being a director and/or a stockholder).

4 unchanged sentences

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

LLP and BDO USA, LLP served as our independent registered public accounting firms for the fiscal years ended December 31, 2022 and 2021,

respectively.

following table presents aggregate fees for professional services rendered by Marcum LLP and BDO USA, LLP during the fiscal years ended

December 31, 2022 and 2021, respectively:

LLP served as our independent registered public accounting firm for the fiscal years ended December 31, 2023 and 2022.

following table presents aggregate fees for professional services rendered by Marcum LLP during the fiscal years ended December 31, 2023

and 2022, respectively:

Year Ended December 31,

2 unchanged sentences

All other fees (4)

fees consisted primarily of fees for the annual audit of our consolidated financial statements,

the interim reviews of the quarterly consolidated financial statements, review of a registration

statement and normal, recurring accounting consultations.

fees consisted primarily of fees for the annual audit of our consolidated financial statements, the interim reviews of the quarterly

consolidated financial statements, review of a registration statement and normal, recurring accounting consultations.

Company did not incur any audit-related fees for the years ended December 31, 2023 and 2022.

14 unchanged sentences

following financial statements are included in Item 8 herein:

Report of Independent Registered Public Accounting Firm (Marcum LLP, Saddle Brook, NJ:

PCAOB ID#688)

Report of Independent Registered Public Accounting Firm (BDO USA, LLP, New York, NY:

PCAOB ID#243 )

Report of Independent Registered Public Accounting Firm (PCAOB ID#688)

Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022

24 unchanged sentences

Description of Securities.

Form of Common Stock Certificate (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-1 of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on August 1, 2013).

Form of Director and Officer Indemnification Agreement (Incorporated by reference to Exhibit 10.1 to the Annual Report on Form 10-K of Pioneer Power Solutions, Inc.

23 unchanged sentences

filed with the Securities and Exchange Commission on February 20, 2019).

First Amending Agreement, dated as of March 15, 2017, by and among Pioneer Power Solutions, Inc., as borrower, each of the domestic subsidiary guarantors signatory thereto and Bank of Montreal, Chicago Branch, as lender.

(Incorporated by reference to Exhibit 10.56 to the Annual Report on Form 10-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on March 29, 2017)

First Amending Agreement, dated as of March 15, 2017, by and among Pioneer Electrogroup Canada Inc., as borrower, each of the Canadian subsidiary guarantors signatory thereto and Bank of Montreal, as lender.

(Incorporated by reference to Exhibit 10.57 to the Annual Report on Form 10-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on March 29, 2017)

Second Amending Agreement, dated as of March 28, 2018, by and among Pioneer Electrogroup Canada Inc., as borrower, each of the Canadian subsidiary guarantors signatory thereto and Bank of Montreal, as lender (Incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on April 2, 2018).

Second Amending Agreement, dated as of March 28, 2018, by and among Pioneer Power Solutions, Inc., as borrower, each of the domestic subsidiary guarantors signatory thereto and Bank of Montreal, Chicago Branch, as lender (Incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on April 2, 2018).

Indemnity Agreement, dated January 22, 2019, between the Company, CleanSpark and PCPI.

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on January 28, 2019).

Contract Manufacturing Agreement, dated January 22, 2019, between the Company and CleanSpark.

(Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on January 28, 2019).

Non-Competition and Non-Solicitation Agreement, dated January 22, 2019, between the Company and CleanSpark.

(Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission on January 28, 2019).

Third Amendment to Employment Agreement, dated March 30, 2020, by and between the Company and Nathan J.

1 unchanged sentence

filed with the Securities and Exchange Commission on April 1, 2020).

Distribution Agreement, dated May 31, 2021, by and between Pioneer Power Solutions, Inc.

and CleanSpark, Inc.

(Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission on June 4, 2021).

At The Market Offering Agreement, dated October 20, 2020, by and between Pioneer Power Solutions, Inc.

Wainwright & Co., LLC (Incorporated by reference to Exhibit 1.2 to the Registration Statement on Form S-3 filed with the Securities and Exchange Commission on October 20, 2020).

Pioneer Power Solutions, Inc.

2021 Long-Term Incentive Plan (Incorporated by reference to Annex A to the Company’s definitive proxy statement on Schedule 14A, filed with the SEC on October 25, 2021).

First Amendment Pioneer Power Solutions, Inc.

2021 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Form 10-Q filed with the Securities and Exchange Commission on November 14, 2023).

Fourth Amendment to Employment Agreement, dated April 25, 2022, by and between Pioneer Power Solutions, Inc.

3 unchanged sentences

and Wojciech (Walter) Michalec (Incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the Securities and Exchange Commission on April 29, 2022).

Termination Agreement, dated as of June 3, 2022, between Pioneer Power Solutions, Inc.

and CleanSpark, Inc.

(Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission on June 8, 2022).

List of subsidiaries.

(Incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K of Pioneer Power Solutions, Inc.

Letter Agreement, dated September 20, 2023, by and between Pioneer Power Solutions, Inc.

and Walter Michalec (Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission on September 22, 2023).

Letter Agreement, dated September 20, 2023, by and between Pioneer Power Solutions, Inc.

and Nathan Mazurek (Incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the Securities and Exchange Commission on September 22, 2023).

Fifth Amendment to Employment Agreement, dated December 26, 2023, by and between Pioneer Power Solutions, Inc.

and Nathan J.

Mazurek (Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission on January 2, 2024).

First Amendment to Employment Agreement, dated December 26, 2023, by and between Pioneer Power Solutions, Inc.

and Wojciech (Walter) Michalec (Incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the Securities and Exchange Commission on January 2, 2024).

List of subsidiaries (Incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K of Pioneer Power Solutions, Inc.

filed with the Securities and Exchange Commission for the year ended December 31, 2022).

Consent of Marcum LLP.

Consent of BDO USA, LLP.

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

2 unchanged sentences

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Inline XBRL Instance Document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Inline XBRL Taxonomy Extension Labels Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

Clawback Policy.

XBRL Instance Document.

XBRL Taxonomy Extension Schema Document.

XBRL Taxonomy Extension Calculation Linkbase Document.

XBRL Taxonomy Extension Definition Linkbase Document.

XBRL Taxonomy Extension Labels Linkbase Document.

XBRL Taxonomy Extension Presentation Linkbase Document.

Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

Management contract or compensatory plan or arrangement.

Filed herewith.

Furnished herewith.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

PIONEER POWER SOLUTIONS, INC.

April 11, 2023

POWER SOLUTIONS, INC.

July 26, 2024

Chief Executive Officer

1 unchanged sentence

registrant and in the capacities and on the dates indicated.

April 11, 2023

Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)

July 26, 2024

Chief Executive Officer and

of the Board of Directors

Executive Officer)

Walter Michalec

April 11, 2023

July 26, 2024

Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer)

April 11, 2023

July 26, 2024

Jonathan Tulkoff

April 11, 2023

July 26, 2024

Kytchener Whyte

April 11, 2023

July 26, 2024

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-K

Item 9A. Controls and Procedures