PIONEER POWER SOLUTIONS, INC. 10-K

ITEM 1. BUSINESS. Overview Pioneer Power Solutions, Inc. and its wholly owned subsidiary (referred to herein as the “Company,” “Pioneer,” “Pioneer Power,” “we,” “our” and “us”) design, manufacture, integrate, service, and sell distributed energy resources, on site and mobile power generation equipment and a platform of mobile electric vehicle (“EV”) charging solutions. Our products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Our customers include, but are not limited to, Federal and State government entities, package delivery businesses, school bus fleet operators, EV charging infrastructure developers and owners, and distributed energy developers. We are headquartered in Fort Lee, New Jersey and operate from two (2) additional locations in the United States for manufacturing, service and maintenance, engineering, and sales and administration. U.S. dollars are reported in thousands, except for share and per share amounts (unless otherwise noted). Description of Business Segment In October 2024, we sold our Pioneer Custom Electrical Products Corp. (“PCEP”) business unit to a buyer (the “PCEP Sale”) as a result of a strategic change to the operations of our business. Following the PCEP Sale, we currently have one reportable segment - Critical Power Solutions (“Critical Power”). ● Our Critical Power business provides customers with our suite of mobile EV charging solutions, power generation equipment and all forms of services, including but not limited to, preventative maintenance, repairs, fuel polishing, and remote monitoring. These products and services are marketed by our operations headquartered in Minnesota, currently doing business under our Pioneer eMobility (e-Boost) and Pioneer Critical Power (Titan) brand names. Our Critical Power business designs, manufactures and sells mobile EV charging solutions under our e-Boost suite of products, in addition to distributing new power generation equipment, refurbishing and reselling used power generation equipment, and performing service and maintenance on our customers’ existing equipment. Many of these systems are used to maintain reliable, primary, peak shaving or emergency standby power at facilities where it is required or where the potential consequences of a power outage make it necessary, such as at major national retailers, hospitals, data centers, communications facilities, factories, military sites, office complexes and other critical operations. In December of 2025, the Company launched two new product platforms: 1. PRYMUS - a new, mobile on-site power system concentrating on customers with requirements of 1-10 megawatts of mobile power to supplement their current energy profile, 2. PowerCore - a residential and small commercial based primary generator system integrating a DC fast charger into one solution. Summary of Critical Power Segment Product Offerings Product Category Solutions ● e-Boost G.O.A.T. (Generator on a Truck) is a truck-mounted option that brings on-demand, high-capacity charging to EV truck and car owners at any convenient location. Suite of e-Boost Products ● e-Boost Mobile is a trailer-mounted solution that provides multiple options for towing and can be available at specific businesses, large sports and cultural events and can be relocated with minimal effort on short notice. ● e-Boost Pod is a stationary EV charging solution with customizable higher capacity that can also service other power needs especially in emergency situations, such as a power outage, serving as a back-up power source with convenient power connectors and outlets available on board. ● Engine-generator sets: power generation equipment with up to 2 MW of power output per genset, sourced from several manufacturers and available for install by our expert, licensed technicians. Power Generation Equipment ● Available individually or in multi-unit paralleled configurations. Fuel options include liquid propane, natural gas, diesel and bi-fuel. ● Uninterruptible Power Supply (“UPS”) systems. ● Scheduled preventative maintenance and 24/7 repair and support services provided for all makes and models of power generation equipment under one- to five-year contracts. Service ● Regional service and maintenance: provided by our technicians in the Midwest and Florida. ● National service and maintenance: provided by our technicians and a network of field service providers throughout the United States for multi-site, multi-state power generation equipment owners. ● UPS systems from major manufacturers. 2 Power generation systems represent considerable investments that require proper maintenance and service in order to operate reliably during a time of emergency. Our power maintenance programs provide preventative maintenance, repair and support service for our customers’ power generation systems. To support our customers in managing their critical infrastructure, we maintain inventories of repair parts, a fleet of service vehicles and a staff of certified field service technicians in the Midwest and Florida. To complete our geographic coverage, we maintain a network of field service partners located in other regions, enabling us to provide quick-response, 24/7 service capabilities that can effectively repair and maintain any make and model of back-up power equipment. Our field service organization services more than 5,900 generators owned by more than 850 customers located throughout the United States and its territories, including for multi-site, multi-state customers. We recognize discrete revenue streams from service contracts, sales, installation, maintenance and repair services, and we offer service contracts to all owners of power generation and related equipment, whether or not the equipment was originally sold by us. Our service agreements have terms ranging from one to five years in duration, providing the Company with a recurring revenue stream. Business Strategy We believe we have established a stable platform from which to develop and grow our business lines, revenue, profitability and shareholder value. We are focused on internal growth through operating efficiencies, new product development, customer focus and broadening and deepening our market penetration. We intend to build our revenue and net income through internal growth initiatives. Accomplishing these financial goals will be dependent on a number of factors, including our ability to execute the following strategies and actions: ● Establishing a scalable organizational infrastructure to support our expected growth; ● Investing in our capabilities to provide progressively more advanced equipment and service solutions; ● Continuously applying our manufacturing and service resources to their highest and best uses; ● Combining and streamlining our business unit supply chains and administrative functions; and ● Improving business processes to deliver consistency, quality and value to our customers. Within our Critical Power business, we are actively marketing our preventive maintenance services to new national accounts including: major national retailers, telecommunications companies, data centers, banks, hospitals and health care facilities, educational institutions and property management companies. Since November 2021, we have been aggressively marketing our e-Boost mobile EV charging products to electric bus and truck manufacturers, fleet management companies, municipalities and EV infrastructure providers. Our Industry The market for Electrical Infrastructure equipment and Critical Power solutions is very fragmented due to the range of equipment types, electrical and mechanical properties, technological standards and service parameters required by different categories of end users for their specific applications. Many orders are custom-engineered and tend to be time-sensitive since other critical work is frequently being coordinated around the customer’s electrical equipment installation. The vast majority of North American demand for the types of solutions we provide is satisfied by thousands of producers and service companies in the United States. We believe that several of the key industry trends supporting future growth in our industry are as follows: ● Aging and Overburdened North American Power Grid — The aging and overburdened North American power grid is expected to require significant capital expenditures to upgrade the existing infrastructure over the next several years to maintain adequate levels of reliability and efficiency. Significant capital investment will be required to relieve congestion, meet growing demand, achieve targets for efficiency, emissions and use of renewable sources, and to replace components of the U.S. power grid operating at, near or past their planned service lives. ● Increasing Long-Term Demand for Electricity and Reliable Power — The Department of Energy’s Energy Information Administration, or EIA, forecasts that total electricity use in the United States will increase by approximately 28% from 2011 to 2040. This increase is driven by anticipated population growth, economic expansion, increasing dependence on computing power throughout the economy and the increased use of electrical devices in the home. In order to meet growing demand for electricity in North America, substantial investment in increased electrical grid capacity and efficiency will be required, as well as the addition of specialized equipment to help ensure the reliability and quality of electricity for critical applications. In response to these challenges, there is an increasing trend among commercial and industrial companies to invest in on-site power sources, both for standby purposes in the event of a catastrophic power outage, or to reduce the amount of electricity they draw from the utility grid during peak periods. 3 ● Autonomous Vehicle Infrastructure and Rapid EV Deployment — While the broader mobile EV charging market has experienced a period of stabilization, the autonomous vehicle (“AV”) sector is entering a phase of rapid acceleration. AV charging depots require hyper-efficient deployment timelines to match the scaling of autonomous fleets. Our e-Boost solution is uniquely positioned to bridge the gap between fleet readiness and traditional utility connectivity, which can often take 12 to 24 months for high-capacity grid upgrades. The U.S. electric vehicle charging station market is projected to grow at a CAGR of 29.1% through 2030, with the fastest growth occurring in high-power DC fast charging segments (>250 kW) necessary for commercial and autonomous operations. ● Edge AI, Data Centers, and Sustainable Microgrids — The explosion of Generative Artificial Intelligence (“AI”) and Edge Computing has created an unprecedented demand for localized, “behind-the-meter” power. Global electricity demand for data centers is projected to double by 2030, with AI-optimized servers expected to account for 44% of total data center power consumption by that time. To meet this need, our PRYMUS mobile microgrid provides 1 MW to 10 MW blocks of onsite power with a 6-month deployment lead time, significantly faster than traditional infrastructure. This aligns with a broader industry shift toward decentralized energy; the global microgrid market is forecast to reach $24.44 billion by 2026, driven specifically by a 20.1% CAGR in the 5–10 MW segment often utilized for industrial and data center optimization. ● Residential Resilience and Premium Power Solutions — Consumer demand for energy independence is intensifying as the North American power grid faces increasing reliability challenges. This has created a high-value niche for “prime power” residential products. Our PowerCore system addresses this by offering 24/7/365 whole-home resiliency with integrated Level 2 and Level 3 charging. This caters to the growing segment of homeowners who view their residences as long-term financial assets and are increasingly seeking bidirectional (V2H) charging capabilities. With Level 2 infrastructure expected to see an incremental growth of over 5 million units by 2026, providing an all-in-one resiliency and high-speed charging solution captures a critical convergence of the residential and transportation energy markets. Customers A substantial portion of the products and services we offer are sold directly to customers by our marketing and sales personnel operating from our office locations in the United States. Our direct sales force and authorized representatives market our products and services to end users and third parties, such as original equipment manufacturers and their dealers, state and local governments, fleet management companies, school bus operators and various intermediary selling groups. For the year ended December 31, 2025, 99% of our sales were to U.S. customers and 1% were to Canadian customers, compared to 87% of our sales were to U.S. customers and 13% were to Canadian customers for the year ended December 31, 2024. This was largely driven by companies involved in distributed generation, regulated and non-regulated utilities, and the industrial and wholesale sectors. During the years ended December 31, 2025, and 2024, we sold our electrical equipment and services to over 879 individual customers, and our 20 largest customers represented approximately 71% and 74% of our consolidated revenue, respectively. Approximately 24% and 13% of our sales during the year ended December 31, 2025, were made to Eneridge, Inc. and SparkCharge, respectively. Approximately 22% and 13% of our sales during the year ended December 31, 2024, were made to INF Associates, LLC and British Columbia Hydro and Power Authority, respectively. Most of our sales to customers were made pursuant to specific contract terms and conditions for each project. Revenue Backlog Revenue backlog, which consists of purchase orders and contracts from customers that we believe to be firm, reflects the amount of revenue that we expect to realize in the future upon the satisfaction of customer orders for our products or services that are not yet complete or for which work has not yet begun. Our revenue backlog as of December 31, 2025, was approximately $12,617, as compared to $19,762 as of December 31, 2024. The decrease in our revenue backlog was primarily attributable to the fulfillment of orders for our mobile EV charging solutions that were included in backlog as of December 31, 2024 and recognized as revenue during the year ended December 31, 2025, without comparable new orders from our mobile EV charging solutions entering backlog as of December 31, 2025. Competition We experience intense competition from generator manufacturers and from distributors and servicers of such equipment. The number and size of our competitors varies considerably by product line and service category, with many of our competitors tending to be small, highly specialized or focused on a certain geographic market area or customer. A representative list of our direct competitors includes Xos Inc., Energy Vault, Inc., HM Cragg Co., and Interstate Power Systems, Inc. 4 Raw Materials and Suppliers The principal materials purchased by us are certain electrical and engine components such as generators, transfer switches, electric vehicle chargers and related parts from a variety of suppliers. These components are available from and supplied by numerous sources at competitive prices. Unanticipated increases in component prices or disruptions in supply could increase production costs and adversely affect our profitability. Our largest suppliers during the year ended December 31, 2025, included Taylor Power Systems, Inc., Gillette Generators Inc. and Winco, Inc. Research and Development Because the industries in which we compete are characterized by rapid technological advances, our ability to compete successfully depends heavily upon our ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. We continue to develop new technologies to enhance existing products and services, and to expand the range of our offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology. During the years ended December 31, 2025, and 2024, we incurred $875 and $1,050, respectively, of R&D costs related to our mobile EV charging solutions, e-Boost. Employees As of December 31, 2025, we had 58 full-time employees. Environmental We are subject to numerous environmental laws and regulations concerning, among other areas, air emissions, discharges into waterways and the generation, handling, storing, transportation, treatment and disposal of waste materials. These laws and regulations are constantly changing and it is impossible to predict with accuracy the effect they may have on us in the future. Like many other industrial enterprises, our manufacturing operations entail the risk of noncompliance, which may result in fines, penalties and remediation costs, and there can be no assurance that such costs will be insignificant. To our knowledge, we are in substantial compliance with all federal, state, provincial and local environmental protection provisions, and believe that the future compliance cost should not have a material adverse effect on our capital expenditures, net income or competitive position. However, legal and regulatory requirements in these areas have been increasing and there can be no assurance that significant costs and liabilities will not be incurred in the future due to regulatory noncompliance. Corporate History We were originally formed in the State of Nevada in 2008. On November 30, 2009, we merged with and into Pioneer Power Solutions, Inc., a Delaware corporation, for the sole purpose of changing our state of incorporation from Nevada to Delaware and changing our name to “Pioneer Power Solutions, Inc”. On September 24, 2013, we completed an underwritten public offering, and our common stock began trading on the Nasdaq Capital Market under the symbol “PPSI”. Available Information Our corporate website is located at www.pioneerpowersolutions.com. On the investor relations section of our website, we make available, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file them with or furnish them to the Securities and Exchange Commission (“SEC”). The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers, such as us, that file electronically with the SEC at www.sec.gov. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events and press and earnings releases as part of the investor relations section of our website. The contents of and the information on or accessible through our corporate website, including the investor relations portion of our website, are not a part of, and are not intended to be incorporated into, this report or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only. 5