What changed in this filing

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Item 1. Financial Statements

2024-10-08 compared with 2024-09-10 · 187 added, 125 removed, 429 unchanged (42% of the section changed)

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thousands, except for share and per share amounts)

2023 (Restated)

2023 (As Restated)

Three Months Ended

Six Months Ended

2023 (As Restated)

Cost of goods sold

5 unchanged sentences

Interest income

Other income, net

Other expense (income), net

(Loss) income before income taxes

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Current assets

Accounts receivable, net of allowance for credit losses of $ 146 and $ 97 as of March 31, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 150 and $ 97 as of June 30, 2024 and December 31, 2023, respectively

Prepaid expenses and other current assets

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

10,821,860 and 9,930,022 shares issued and outstanding on March 31, 2024 and December 31, 2023, respectively

10,917,038 and 9,930,022 shares issued and outstanding on June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

5 unchanged sentences

Statements of Cash Flows

2023 (Restated)

Three Months Ended

2023 (As Restated)

Six Months Ended

2023 (As Restated)

Operating activities

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Net cash provided by/ (used in) financing activities

Increase in cash

Increase (decrease) in cash

Cash, beginning of period

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Interest paid

Non-cash investing and financing activities:

Surrender and retirement of common stock

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

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stockholders’

Balance - March 31, 2023 (As Restated)

Stock-based compensation

Balance - June 30, 2023 (As Restated)

Balance - March 31, 2024

Stock-based compensation

Issuance of common stock, net of transaction costs

Surrender and retirement of common stock

Balance - June 30, 2024

comprehensive

stockholders’

Balance - January 1, 2023 (As Restated)

Stock-based compensation

Balance - March 31, 2023 (As Restated)

Balance - June 30, 2023 (As Restated)

Balance - January 1, 2024

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Issuance of common stock, net of transaction costs

Balance - March 31, 2024

Surrender and retirement of common stock

Balance - June 30, 2024

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

POWER SOLUTIONS, INC.

to Unaudited Consolidated Financial Statements for the Quarterly Period Ended March 31, 2024

to Unaudited Consolidated Financial Statements for the Quarterly Period Ended June 30, 2024

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 March 31, 2024.

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

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

GAAP for a year-end balance

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, 2024.

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 consolidated 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

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We have used a discrete-period computation method to calculate

taxes for the fiscal three-month period ended March 31, 2024.

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

the year ending December 31, 2024.

As of March 31, 2024, 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.

taxes for the fiscal six-month period ended June 30, 2024.

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

for the year ending December 31, 2024.

As of June 30, 2024, 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, 2023.

accompanying consolidated 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 consolidated financial statements, as of

March 31, 2024, the Company had $ 6,227

accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of

assets and the satisfaction of liabilities in the normal course of business.

As shown in the accompanying consolidated financial

statements, as of June 30, 2024, the Company had $ 6,512

of cash on hand and working capital of $ 11,140 .

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“ATM Program”).

Since October 20, 2020, and through March 31, 2024, the Company sold an aggregate of 1,807,897

Since October 20, 2020, and through June 30, 2024, the Company sold an aggregate of 1,835,616

shares of common stock for aggregate gross proceeds of approximately $ 14,051 ,

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

During the three months ended March 31, 2024, the

Company sold an aggregate of 891,838

During the six months ended June 30, 2024, the Company

sold an aggregate of 919,557

shares of common stock for an aggregate consideration of approximately $ 5,147 ,

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

As of March 31, 2024, $ 70,003 of common stock remained available for issuance under the ATM Program.

Company has historically met its cash needs through a combination of cash flows from operating activities and bank borrowings, the completion

of the sale of the transformer business units in August 2019, sale of common stock under the ATM Program and collecting all unpaid principal

and interest from the Seller Notes.

Historically, the Company’s cash requirements were generally for operating activities, debt

repayment, capital improvements and acquisitions.

The Company expects to meet its cash needs with the working capital and cash flows

from the Company’s operating activities.

The Company expects its 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 from the date

our consolidated financial statements are issued.

As of June 30, 2024, $ 69,853

of common stock remained available for issuance under the ATM Program.

Company has historically met its cash needs through a combination of cash flows from operating activities and bank borrowings, the

completion of the sale of the transformer business units in August 2019, sale of common stock under the ATM Program and collecting

all unpaid principal and interest from the Seller Notes.

Historically, the Company’s cash requirements were generally for

operating activities, debt repayment, capital improvements and acquisitions.

The Company expects to meet its cash needs with the

working capital and cash flows from the Company’s operating activities.

The Company expects its 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 from the date our unaudited interim consolidated financial statements

and Uncertainties

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deemed appropriate to limit the impact on its business.

During the three months ended March 31, 2024, the Company was able to operate

substantially at capacity.

During the six months ended June 30, 2024, the Company was able to operate substantially

can be no assurance that precautionary measures, whether adopted by the Company or imposed by others, will be effective, and such measures

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

have been no material changes to the significant accounting policies included in Note 3 to the audited consolidated financial statements

included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, except as disclosed in this note.

Accounting Pronouncements

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

November 2023, the Financial Accounting Standards Board (“FASB”) FASB issued ASU 2023-07, “Improvements to Reportable

Segment Disclosures” (“ASU 2023-07”), which requires disclosures of significant expenses by segment and interim disclosure

of items that were previously required on an annual basis.

ASU 2023-07 is to be applied on a retrospective basis and is effective for

fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

is evaluating the impact of ASU 2023-07 on disclosures in our consolidated financial statements.

December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides

for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid.

ASU 2023-09 requires entities

to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling

items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others.

Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction.

also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual

jurisdiction, subject to a five percent quantitative threshold.

ASU 2023-09 may be adopted on a prospective or retrospective basis and

is effective for fiscal years beginning after December 15, 2024 with early adoption permitted.

The Company is evaluating the impact of

ASU 2023-09 on disclosures in our consolidated financial statements.

is recognized when (1) a contract with a customer exists, (2) performance obligations promised in a contract are identified based on

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the collectability of the reported amount.

There were $ 146 and $ 97 of reserves for expected credit losses as of March 31, 2024, and December

There were $ 150 and $ 97 of reserves for expected credit losses as of June 30, 2024, and December

31, 2023, respectively.

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To achieve this core principle, the Company applies the following five steps:

1) Identify the

contract with a customer

the contract with a customer

contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s

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to the customer.

2) Identify the

performance obligations in the contract

the performance obligations in the contract

obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are

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for as a combined performance obligation.

3) Determine the

transaction price

the transaction price

transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products

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The customer payments are generally due in 30 days.

4) Allocate the

transaction price to performance obligations in the contract

the transaction price to performance obligations in the contract

the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

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related to the performance obligations.

5) Recognize revenue

when or as the Company satisfies a performance obligation

revenue when or as the Company satisfies a performance obligation

Company satisfies performance obligations either over time or at a point in time.

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obligation is satisfied by transferring a promised product or service to a customer.

the three months ended March 31, 2024, the Company recognized $ 4,157 of

revenue over time, as compared to $ 6,315 during

the three months ended March 31, 2023.

Additionally, the Company recognized $ 4,433 and

revenue at a point in time from the sale of our products during the three months ended March 31, 2024, and 2023,

respectively.

the three months ended June 30, 2024, the Company recognized $ 4,676 of revenue over time, as compared to $ 8,224 during the three months

ended June 30, 2023.

Additionally, the Company recognized $ 1,664 and $ 4,058 of revenue at a point in time from the sale of our products

during the three months ended June 30, 2024, and June 30, 2023, 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 $ 1,988 and $ 2,062 of service revenue during the three months ended March 31, 2024, and

2023, respectively.

the three months ended March 31, 2024, the Company recognized approximately $ 2,370

The Company recognized $ 2,235 and $ 1,890 of service revenue during the three months ended June 30, 2024, and

June 30, 2023, respectively.

the six months ended June 30, 2024, the Company recognized $ 8,833 of revenue over time, as compared to $ 14,683 during the six months

ended June 30, 2023.

Additionally, the Company recognized $ 6,097 and $ 7,155 of revenue at a point in time from the sale of our products

during the six months ended June 30, 2024, and June 30, 2023, 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 $ 4,223 and $ 3,952 of service revenue during the six months ended June 30, 2024, and

June 30, 2023, respectively.

the three months ended June 30, 2024, the Company recognized approximately $ 98

of revenue that was classified as deferred revenue

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of revenue recognized during the three months

ended March 31, 2023, that was classified as deferred revenue as of December 31, 2022, resulting primarily from the progress made on the

ended June 30, 2023, that was classified as deferred revenue as of December 31, 2022, resulting primarily from the progress made on the

various active contracts during the respective reporting periods.

the six months ended June 30, 2024, the Company recognized approximately $ 2,477

of revenue that was classified as deferred revenue

as of December 31, 2023, as compared to $ 5,966

of revenue recognized during the six months ended

June 30, 2023, that was classified as deferred revenue as of December 31, 2022, resulting primarily from the progress made on the various

active contracts during the respective reporting periods.

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

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

of March 31, 2024, one customer represented approximately 10 % of the Company’s accounts receivable.

As of December 31, 2023, one customer

represented approximately 23 % of the Company’s accounts receivable.

the three months ended March 31, 2024, two customers represented approximately 27 % and 12 % of the Company’s revenue.

For the three

months ended March 31, 2023, two customers represented approximately 54 % and 14 % of the Company’s revenue.

of June 30, 2024, one customer represented approximately 11 % of the Company’s accounts receivable.

As of December 31, 2023, one

customer represented approximately 23 % of the Company’s accounts receivable.

the three months ended June 30, 2024, one customer represented approximately 10 % of the Company’s revenue.

For the three months

ended June 30, 2023, one customer represented approximately 65 % of the Company’s revenue.

the six months ended June 30, 2024, one customer represented approximately 16 %

of the Company’s revenue.

For the six months ended June 30, 2023, two customers represented approximately 60 %

of the Company’s revenue.

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

When the buyer requests authorization to return

material for reasons of their own, the buyer will be charged for placing the returned goods in saleable condition, restocking

charges and for any outgoing and incoming transportation paid by the Company.

The Company warrants title to the products, and

warrants the products on date of shipment to the buyer, to be of the kind and quality described in the contract, merchantable, and

free of defects in workmanship and material.

Returns and warranties during the three and nine months ended March 31, 2024, and 2023

were insignificant.

When the buyer requests authorization to return material

for reasons of their own, the buyer will be charged for placing the returned goods in saleable condition, restocking charges and for

any outgoing and incoming transportation paid by the Company.

The Company warrants title to the products, and warrants the products on

date of shipment to the buyer, to be of the kind and quality described in the contract, merchantable, and free of defects in workmanship

and material.

Returns and warranties during the three and six months ended June 30, 2024, and June 30, 2023, were insignificant.

following table presents our revenues disaggregated by revenue discipline:

OF REVENUE DISAGGREGATED

2023 (Restated)

(As Restated)

Three Months Ended

Six Months Ended

(As Restated)

Total revenue

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Total property and equipment, net

expense was $ 122 and $ 130 for the three months ended March 31, 2024, and 2023, respectively.

expense was $ 164 and $ 97 for the three months ended June 30, 2024, and 2023, respectively.

expense was $ 286 and $ 227 for the six months ended June 30, 2024, and 2023, respectively.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

components of accounts payable and accrued liabilities are summarized below:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable

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sales and use taxes and accrued insurance.

Accrued legal settlement costs as of March 31, 2024, and December 31, 2023, were 5,000 .

Accrued legal settlement costs as of June 30, 2024, and December 31, 2023, were $ 5,000 .

Note 10 for details.

As of March 31, 2024, and December 31, 2023, accrued sales commissions were $ 550 and $ 442 , respectively.

compensation and benefits as of March 31, 2024, and December 31, 2023, were $ 208 and $ 294 , respectively.

As of June 30, 2024, and December 31, 2023, accrued sales commissions were $ 584 and $ 442 , respectively.

compensation and benefits as of June 30, 2024, and December 31, 2023, were $ 252 and $ 294 , respectively.

Accrued sales and use taxes as

of March 31, 2024, and December 31, 2023, were $ 149 and $ 67 , respectively, and there was $ 485 accrued insurance as of March 31, 2024, compared

of June 30, 2024, and December 31, 2023, were $ 167 and $ 67 , respectively, and there was $ 228 accrued insurance as of June 30, 2024, compared

to $ 795 as of December 31, 2023.

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normal business operations.

of March 31, 2024, two of the Company’s suppliers represented 33 % of the Company’s accounts payable.

of June 30, 2024, two of the Company’s suppliers represented approximately 41 % of the Company’s accounts payable.

As of December

one of the Company’s suppliers represented 18 % of the Company’s accounts payable.

31, 2023, one of the Company’s suppliers represented approximately 18 % of the Company’s accounts payable.

STOCK-BASED COMPENSATION

summary of stock option activity during the three months ended March 31, 2024, is as follows:

summary of stock option activity during the six months ended June 30, 2024, is as follows:

OF STOCK OPTION ACTIVITY

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Forfeited/expired

Outstanding as of March 31, 2024

Exercisable as of March 31, 2024

summary of RSU activity during the three months ended March 31, 2024, is as follows:

Outstanding as of June 30, 2024

Exercisable as of June 30, 2024

summary of RSU activity during the six months ended June 30, 2024, is as follows:

SCHEDULE OF RESTRICTED STOCK UNITS

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Units forfeited

Unvested restricted stock units as of March 31, 2024

compensation expense recorded for the three months ended March 31, 2024, and 2023 was approximately $ 225 and $ 143 , respectively.

March 31, 2024, there was $ 189 of stock-based compensation expense remaining to be recognized in the consolidated statements of operations

Unvested restricted stock units as of June 30, 2024

compensation expense recorded for the three and six months ended June 30, 2024, was approximately $ 96 and $ 321 , respectively.

compensation expense recorded for the three and six months ended June 30, 2023, was approximately $ 819 and $ 962 , respectively.

30, 2024, there was $ 109 of stock-based compensation expense remaining to be recognized in the consolidated statements of operations

over a weighted average remaining period of 2.1 years.

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OF BASIC AND DILUTED LOSS PER SHARE

2023 (Restated)

(As Restated)

Three Months Ended

Six Months Ended

2023 (As Restated)

Net (loss) income

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Net (loss) income per common share:

of March 31, 2024, and 2023, diluted (loss) income per share excludes potentially dilutive common shares related to 649,167 and 585,667

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

was anti-dilutive.

of June 30, 2024, diluted (loss) income per share excludes potentially dilutive common shares related to 654,313 shares underlying stock

options as their effect was anti-dilutive.

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

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OF SEGMENT INCOME LOSS

2023 (Restated)

(As Restated)

Three Months Ended

Six Months Ended

2023 (As Restated)

Electrical Infrastructure

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Three Months Ended

Six Months Ended

Depreciation and amortization

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Unallocated corporate overhead expenses

Depreciation and amortization

2023 (Restated)

and amortization

(As Restated)

Three Months Ended

Six Months Ended

2023 (As Restated)

Operating (loss) income

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Three Months Ended

Six Months Ended

2023 (As Restated)

United States

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June 15, 2023, Terrence and Kay Mimick (the “Plaintiffs”) filed a complaint in the U.S.

District Court, District of Nebraska

naming the Company, its wholly-owned subsidiary, Pioneer Critical Power, Inc., and an individual acting in his capacity as an employee

of the Company, collectively as defendants.

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

entrustment, and negligent hiring, training and supervision, as a result of a car accident that occurred on September 9, 2019, and seeking

special damages related to the injuries allegedly sustained by Plaintiffs.

The amended complaint also named Titan Energy Systems, Inc.

District Court, District of

Nebraska naming the Company, its wholly-owned subsidiary, Pioneer Critical Power, Inc., and an individual acting in his capacity as

an employee of the Company, collectively as defendants.

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

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

September 9, 2019, and seeking special damages related to the injuries allegedly sustained by Plaintiffs.

The amended complaint also

named Titan Energy Systems, Inc.

as a defendant instead of Pioneer Critical Power, Inc.

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

On July 27, 2023, the defendants filed an

Answer to Plaintiff’s Amended Complaint.

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

In June 2024, another mediation was held

and the parties reached a settlement for all of the Plaintiffs’ claims.

As of March 31, 2024, the Company recognized a liability

of $ 5,000 related to this matter, which was included within accounts payable and accrued liabilities, with a corresponding insurance

receivable of $ 5,000 related to the loss recovery, which was deemed to be probable and included within prepaid expenses and other current

assets on the consolidated balance sheets.

In June 2024, another mediation was held and the parties reached a settlement for all of the Plaintiffs’ claims.

dismissed with prejudice on July 23, 2024.

As of June 30, 2024, the Company recognized a liability of $ 5,000

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

receivable of $ 5,000

related to the loss recovery, which was deemed to be probable and included within prepaid expenses and other current assets on the

consolidated balance sheets.

Company is not aware of any material proceedings in which any of its directors, officers or affiliates or any registered or beneficial

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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