PIONEER POWER SOLUTIONS, INC. 10-Q

Item 1. FINANCIAL STATEMENTS PIONEER POWER SOLUTIONS, INC. Condensed Consolidated Statements of Operations (In thousands, except for share and per share amounts) (Unaudited) 2026 2025 For the Three Months Ended March 31, 2026 2025 Revenues $ 4,266 $ 6,740 Cost of goods sold 3,684 6,592 Gross profit 582 148 Operating expenses Selling, general and administrative 2,446 2,414 Research and development 156 80 Total operating expenses 2,602 2,494 Operating loss from continuing operations ( 2,020 ) ( 2,346 ) Interest income, net 156 247 Other (expense) income, net ( 644 ) 23 Loss before income taxes ( 2,508 ) ( 2,076 ) Income tax expense (benefit) - - Net loss from continuing operations ( 2,508 ) ( 2,076 ) Income from discontinued operations, net of income taxes - 1,147 Net loss $ ( 2,508 ) $ ( 929 ) Basic (loss) earnings per share: Loss from continuing operations $ ( 0.23 ) $ ( 0.19 ) Earnings from discontinued operations - 0.10 Basic loss per share $ ( 0.23 ) $ ( 0.09 ) Diluted (loss) earnings per share: Loss from continuing operations $ ( 0.23 ) $ ( 0.19 ) Earnings from discontinued operations - 0.10 Diluted loss per share $ ( 0.23 ) $ ( 0.09 ) Weighted average common shares outstanding: Basic 11,095,588 11,120,266 Diluted 11,095,588 11,187,484 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 PIONEER POWER SOLUTIONS, INC. Condensed Consolidated Balance Sheets (In thousands, except for share and per share amounts) (Unaudited) March 31, December 31, 2026 2025 ASSETS Current assets Cash $ 13,583 $ 14,959 Accounts receivable, net of allowance for credit losses of $ 68 and $ 23 as of March 31, 2026, and December 31, 2025, respectively 3,362 3,133 Inventories 5,834 6,315 Prepaid expenses and other current assets 954 1,134 Total current assets 23,733 25,541 Property and equipment, net 5,087 5,400 Operating lease right-of-use assets, net 1,084 1,144 Financing lease right-of-use assets, net 299 332 Investments - 418 Lease receivable 2,514 2,576 Other assets 304 44 Total assets $ 33,021 $ 35,455 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued liabilities $ 3,670 $ 3,745 Current portion of operating lease liabilities, net 243 223 Current portion of financing lease liabilities, net 122 123 Deferred revenue 1,041 791 Total current liabilities 5,076 4,882 Operating lease liabilities, non-current portion, net 874 936 Financing lease liabilities, non-current portion, net 188 219 Other long-term liabilities 62 101 Total liabilities 6,200 6,138 Stockholders’ equity Preferred stock, $ 0.001 par value, 5,000,000 shares authorized; none issued - - Common stock, $ 0.001 par value, 30,000,000 shares authorized; 11,096,266 and 11,095,266 shares issued and outstanding on March 31, 2026, and December 31, 2025, respectively 11 11 Additional paid-in capital 35,317 35,305 Accumulated deficit ( 8,507 ) ( 5,999 ) Total stockholders’ equity 26,821 29,317 Total liabilities and stockholders’ equity $ 33,021 $ 35,455 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 PIONEER POWER SOLUTIONS, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) 2026 2025 For the Three Months Ended March 31, 2026 2025 Operating activities Net loss $ ( 2,508 ) $ ( 929 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 265 258 Amortization of financing lease right-of-use assets 33 23 Non cash lease expense 60 58 Provision for credit losses 55 2 Stock-based compensation 10 13 Loss attributable to equity method investee 644 57 Loss on disposal of property and equipment - 29 Gain on change in consideration due to buyer - ( 1,147 ) Changes in current operating assets and liabilities: Accounts receivable, net ( 284 ) 2,479 Inventories 481 32 Prepaid expenses and other assets 236 424 Accounts payable, accrued liabilities and other liabilities ( 110 ) 103 Deferred revenue 250 155 Lease receivables 62 - Operating lease liabilities ( 81 ) ( 55 ) Net cash (used in) provided by operating activities ( 887 ) 1,502 Investing activities Purchase of property and equipment ( 233 ) ( 595 ) Investment in equity method investee ( 226 ) - Net cash used in investing activities ( 459 ) ( 595 ) Financing activities Net proceeds from the exercise of options for common stock 2 - Payment of cash dividend - ( 16,665 ) Principal repayments of financing leases ( 32 ) ( 24 ) Net cash used in financing activities ( 30 ) ( 16,689 ) Decrease in cash ( 1,376 ) ( 15,782 ) Cash Cash, beginning of period 14,959 41,622 Cash, end of period $ 13,583 $ 25,840 Non-cash investing and financing activities: Transfer from property and equipment to inventory $ - $ ( 420 ) Property and equipment obtained in exchange for accounts payable and accrued liabilities 35 74 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 PIONEER POWER SOLUTIONS, INC. Condensed Consolidated Statements of Changes in Stockholders’ Equity (In thousands, except for share amounts) (Unaudited) Shares Amount capital deficit equity Additional Total Common Stock paid-in Accumulated stockholders’ Shares Amount capital deficit equity Balance - January 1, 2025 11,120,266 $ 11 $ 35,418 $ - $ 35,429 Net loss - - - ( 929 ) ( 929 ) Stock-based compensation - - 13 - 13 Balance - March 31, 2025 11,120,266 $ 11 $ 35,431 $ ( 929 ) $ 34,513 Balance - January 1, 2026 11,095,266 $ 11 $ 35,305 $ ( 5,999 ) $ 29,317 Balance 11,095,266 $ 11 $ 35,305 $ ( 5,999 ) $ 29,317 Net loss - - - ( 2,508 ) ( 2,508 ) Stock-based compensation - - 10 - 10 Exercise of stock options 1,000 - 2 - 2 Balance - March 31, 2026 11,096,266 $ 11 $ 35,317 $ ( 8,507 ) $ 26,821 Balance 11,096,266 $ 11 $ 35,317 $ ( 8,507 ) $ 26,821 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 PIONEER POWER SOLUTIONS, INC. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except for share and per share amounts) 1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES Organization and Operations Pioneer Power Solutions, Inc. and its wholly owned subsidiary (referred to herein as the “Company” or “Pioneer”) design, manufacture, service and integrate distributed energy resources, power generation equipment and 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 operations, 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. Segments In determining operating and reportable segments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting (“ASC 280”), the Company concluded that it has one reportable segment: Critical Power Solutions (“Critical Power”), as defined in its Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (the “SEC”) on April 8, 2026. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. The Company believes 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. ASC 740-270 requires the use of an estimated annual effective tax rate to compute the tax provision during an interim period unless certain exceptions are met. Due to significant variability in projected ordinary income, the Company concluded that the estimated annual effective tax rate method was not reliable for interim reporting purposes. Accordingly, the Company calculated quarterly income tax expense using the discrete method based on actual year-to-date results. These unaudited condensed interim consolidated financial statements include the accounts of Pioneer and Titan Energy Systems, Inc. (“Titan”), its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company and its subsidiary included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. 5 Risks and Uncertainties The continuing impacts of the rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments, such as the ongoing conflict between Russia and Ukraine, and the ongoing conflict in the Middle East, have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by the Company’s clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. As a result of the current uncertainty in economic activity, the Company is unable to predict the potential size and duration of the impact on its revenue and its results of operations, if any. The extent of the potential impact of these macroeconomic factors on the Company’s operational and financial performance will depend on a variety of factors, including the extent of geopolitical disruption and its impact on the Company’s clients, partners, industry, and employees, all of which are uncertain at this time and cannot be accurately predicted. The Company continues to monitor the effects of these macroeconomic factors and intends to take steps deemed appropriate to limit the impact on its business. There can be no assurance that precautionary measures, whether adopted by the Company or imposed by others, will be effective, and such measures could negatively affect its sales, marketing, and client service efforts, delay and lengthen its sales cycles, decrease its employees’, clients’, or partners’ productivity, or create operational or other challenges, any of which could harm its business and results of operations. Rounding All dollar amounts (except share and per share data) presented are stated in thousands of dollars, unless otherwise noted. 6 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the Annual Report for the year ended December 31, 2025, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. Revenue Recognition Lessor Arrangements The Company determines whether an arrangement is or contains a lease at inception. The Company leases generators and mobile EV charging equipment to certain of its customers. As a lessor, when a lease meets certain criteria indicating that the Company has effectively transferred control of the underlying asset to the customer, the lease is classified as a sales-type lease. When a lease does not meet the criteria for a sales-type lease but meets the criteria of a direct financing lease, the lease is classified as a direct financing lease. When none of the required criteria for sales-type lease or direct-financing lease are met, the lease is classified as an operating lease. Sales-type leases are recognized as a lease receivable on the unaudited consolidated balance sheets. The net investment comprises the lease receivable including any unguaranteed residual value of the underlying asset. For sales-type leases, product revenue is generally recognized upon lease commencement. The discounted unguaranteed residual value of the underlying leased assets is not material to the net investment in the lease balance. The Company monitors the performance of customers who leased equipment and are subject to ongoing payments. No allowance has been recorded for the receivables under the leasing arrangements. The lease terms are included in the Company’s contracts and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. Leasing revenues do not include material amounts of variable payments. Lessees do not provide residual value guarantees on rented equipment. 3. REVENUES Nature of the Company’s products and services The Company’s principal products and services include distributed energy resources, power generation equipment and mobile electric vehicle charging solutions. Products The Company’s Critical Power business provides customers with power generation equipment and the Company’s suite of mobile e-Boost electric vehicle charging solutions. Services Power generation systems represent considerable investments that require proper maintenance and service in order to operate reliably during a time of emergency. The Company’s power maintenance programs provide preventative maintenance, repair and support service for the Company’s customers’ power generation systems. The timing of revenue recognition, customer billings and cash collections results in accounts receivable and deferred revenue at the end of each reporting period. Contract assets include unbilled amounts typically resulting from revenue recognized exceeding amounts billed to customers for contracts utilizing an input method based on the proportion of labor hours incurred as compared to the total estimated labor hours for the fixed-fee contract performance obligations. The Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries. Revenue Recognition During the three months ended March 31, 2026, and 2025, the Company recognized $ 79 and $ 150 of equipment revenue over time, respectively. Additionally, the Company recognized $ 1,514 and $ 3,623 of revenue at a point in time from the sale of its products, which is typically recognized upon delivery, during the three months ended March 31, 2026, and 2025, respectively. Included within point in time revenue during the three months ended March 31, 2025, the Company recognized $ 2,337 of revenue pursuant to bill and hold arrangements. Service revenues include maintenance contracts that are recognized over time based on the contract term and repair services which are recognized as services are delivered. The Company recognized $ 2,417 and $ 2,444 of service revenue during the three months ended March 31, 2026, and 2025, respectively. The Company recognizes revenue as services are provided. Amounts billed and due from customers, as well as the value of unbilled account receivables, are generally classified within current assets in the unaudited condensed consolidated balance sheets. 7 The change in deferred revenue as of March 31, 2026, was driven primarily by ordinary course contract activity. As of January 1, 2026, the Company had a deferred revenue balance of $ 791 . For the three months ended March 31, 2026, and 2025, the Company recognized revenue of $ 360 and $ 230 respectively, related to amounts that were included in deferred revenue as of December 31, 2025, and 2024, resulting primarily from the progress made on the various active contracts during the respective reporting periods. As of March 31, 2026, the Company had $ 1,041 related to contract liabilities where performance obligations have not yet been satisfied, which has been included within deferred revenue in the unaudited condensed consolidated balance sheet. Concentration of Risk During the three months ended March 31, 2026, the Company derived 14 % and 11 % of its revenue from two customers. During the three months ended March 31, 2025, the Company derived 39 % and 11 % of its revenue from two customers. As of March 31, 2026, one customer’s outstanding receivable balance equaled 17 % of the total outstanding receivable balance. As of December 31, 2025, one customer’s outstanding receivable balance equaled 25 % of the total outstanding receivable balance. As of March 31, 2026 and December 31, 2025, one customer represented 100 % of the Company’s lease receivable balance. Return 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 also 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 months ended March 31, 2026, were insignificant, and returns and warranties during the three months ended March 31, 2025, were $ 370 . Disaggregated Revenue The following table presents the Company’s revenues disaggregated by revenue discipline: SCHEDULE OF REVENUES DISAGGREGATED BY REVENUE DISCIPLINE 2026 2025 For the Three Months Ended March 31, 2026 2025 Revenues - ASC 606 Products $ 1,593 $ 3,773 Services 2,417 2,444 Total revenues - ASC 606 4,010 6,217 Revenues - ASC 842 Operating lease revenue 256 523 Total revenues - ASC 842 256 523 Total revenue $ 4,266 $ 6,740 8 Lease Revenues The Company’s sales-type lease portfolio as of March 31, 2026 consisted of nine mobile EV charging and power generation units leased to a single customer under two separate agreements, each with original terms of ten years. The leases do not contain renewal or early termination options. There were no leasing revenues arising from variable lease payments during the three months ended March 31, 2026, and 2025. The following table presents future undiscounted operating lease payments to be received as of March 31, 2026: SCHEDULE OF FUTURE UNDISCOUNTED OPERATING LEASE PAYMENTS TO BE RECEIVED For the Years Ending December 31, Total 2026 $ 484 2027 84 Total $ 568 As of March 31, 2026, and December 31, 2025, the lease receivable was $ 2,800 and $ 2,843 , respectively. There were no unguaranteed residual assets or deferred selling profit included in the net investment as of March 31, 2026, and December 31, 2025, respectively. Lessees do not provide residual value guarantees on leased equipment. The Company manages residual value risk by monitoring technological developments and anticipated market demand for its mobile EV charging and power generation equipment. The Company evaluates its net investment in sales-type leases for credit losses in accordance with ASC 326, considering the creditworthiness of its lessees, historical payment experience, current economic conditions, and reasonable and supportable forecasts. As of March 31, 2026, and December 31, 2025, one customer represented 100 % of the Company’s lease receivable balance. Based on its assessment, including consideration of the lessee’s financial condition and payment history, the Company determined that no allowance for credit losses was necessary as of March 31, 2026, and December 31, 2025. 4. INVENTORIES The components of inventories are summarized below: SCHEDULE OF INVENTORIES March 31, December 31, 2026 2025 Raw materials $ 5,529 $ 5,613 Work in process 305 702 Total inventories $ 5,834 $ 6,315 Raw materials primarily consist of generators, electrical equipment, and components and parts used in the assembly and service of the Company’s mobile EV charging solutions and power generation equipment. 5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES The components of accounts payable and accrued liabilities are summarized below: SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES March 31, December 31, 2026 2025 Accounts payable $ 2,608 $ 2,249 Accrued liabilities 1,062 1,496 Total accounts payable and accrued liabilities $ 3,670 $ 3,745 Accrued liabilities primarily consist of accrued insurance, accrued compensation and benefits and accrued warranty costs. As of March 31, 2026, and December 31, 2025, accrued insurance was $ 304 and $ 495 , respectively. Accrued compensation and benefits as of March 31, 2026, and December 31, 2025, were $ 362 and $ 392 , respectively. Accrued warranty costs as of March 31, 2026, and December 31, 2025, were $ 225 and $ 249 , respectively. The remainder of accrued liabilities are comprised of several insignificant accruals in connection with normal business operations. 9 6. STOCK-BASED COMPENSATION A summary of stock option activity during the three months ended March 31, 2026, is as follows: SUMMARY OF STOCK OPTION ACTIVITY Stock Options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value Outstanding as of January 1, 2026 534,167 $ 4.24 Granted - - Exercised ( 1,000 ) 2.18 Forfeited/expired - - Outstanding as of March 31, 2026 533,167 4.24 4.02 $ 235 Exercisable as of March 31, 2026 526,498 4.22 3.98 235 Stock-based compensation expense recorded for the three months ended March 31, 2026, and 2025, was approximately $ 10 and $ 13 , respectively. As of March 31, 2026, there was $ 14 of stock-based compensation expense remaining to be recognized in the condensed consolidated statements of operations over a weighted average remaining period of 0.4 years. 7. EQUITY-METHOD INVESTMENT On October 29, 2024, in connection with the sale of the Company’s former wholly owned subsidiary, Pioneer Custom Electrical Products Corp. (“PCEP”), to Voltaris Power, LLC (“Voltaris”), the Company retained an indirect equity interest in Voltaris through Rollover Common Units of Pioneer Investment LLC (the “Investment”). The Company accounts for the Investment under the equity method in accordance with ASC 323. The Company reports its share of investee results on a one-quarter lag; accordingly, the Company’s share of investee earnings or losses for the three months ended March 31, 2026, reflects investee results for the three months ended December 31, 2025. On February 27, 2026, the Company exercised its preemptive rights and funded $ 226 in cash to subscribe for its pro-rata share of a new class of senior preferred interests (the “Preferred Interests”) in the Investment. The Preferred Interests have senior distribution priority and a stated return threshold equal to the greater of a 20 % Internal Rate of Return (“IRR”) (compounded quarterly) or 2.0x Multiple on Invested Capital (“MOIC”), are non-voting, and are redeemable at the issuer’s option. The Company’s pro-rata common unit ownership was unchanged during the three months ended March 31, 2026. The Company’s Preferred Interests subscription has been recorded as an additional capital contribution to the Investment. During the three months ended March 31, 2026, and 2025, the Company recognized a loss from the Investment of $ 644 and $ 57 , respectively, which is included in other expense in the unaudited condensed consolidated statements of operations. As of March 31, 2026 and December 31, 2025, the carrying value of the Investment was $ 0 and $ 418 , respectively, and the Company has suspended further loss recognition in accordance with ASC 323-10-35-20. 10 8. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted earnings (loss) per share data is computed using the weighted average number of common and dilutive common equivalent shares outstanding during each period. Dilutive common equivalent shares consist of shares that would be issued upon the exercise of stock options and vesting of restricted stock units, computed using the treasury stock method. In periods of net loss, diluted loss per share is computed using the same number of weighted-average shares as basic loss per share, as the inclusion of potentially dilutive securities would be anti-dilutive. A reconciliation of basic and diluted earnings (loss) per share is as follows (in thousands, except per share data): SCHEDULE OF RECONCILIATION BASIC AND DILUTED EARNINGS (LOSS) PER SHARE 2026 2025 For the Three Months Ended March 31, 2026 2025 Numerator: Loss from continuing operations $ ( 2,508 ) $ ( 2,076 ) Income from discontinued operations, net of income taxes - 1,147 Net loss $ ( 2,508 ) $ ( 929 ) Denominator: Weighted average common shares outstanding - basic 11,095,588 11,120,266 Effect of dilutive securities: Stock options - 67,218 Weighted average common shares outstanding - diluted 11,095,588 11,187,484 Basic (loss) earnings per share: Loss per share from continuing operations $ ( 0.23 ) $ ( 0.19 ) Earnings per share from discontinued operations - 0.10 Basic loss per share $ ( 0.23 ) $ ( 0.09 ) Diluted (loss) earnings per share: Loss per share from continuing operations $ ( 0.23 ) $ ( 0.19 ) Earnings per share from discontinued operations - 0.10 Diluted loss per share $ ( 0.23 ) $ ( 0.09 ) The following securities were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2026 2025 For the Three Months Ended March 31, 2026 2025 Stock options 533,167 387,500 Total 533,167 387,500 11 9. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION The Chief Executive Officer of the company (the “CEO”), as the Chief Operating Decision Maker (“CODM”), organizes the Company, manages resource allocations and measures performance of the Company’s single operating segment, Critical Power Solutions. The Critical Power Solutions reportable segment is the Company’s Titan Energy Systems, Inc. business unit. The Critical Power Solutions segment provides mobile high capacity charging equipment, power generation equipment and aftermarket field-services in order to help customers secure fast vehicle charging where fixed charging infrastructure does not exist, and additionally to ensure smooth, uninterrupted power to operations during times of emergency. The CODM assesses the Company’s performance and decides how to allocate resources based on consolidated net income (loss) in the unaudited condensed consolidated statements of operations, which is assessed to be the segment measure of profit or loss. This measure is used to monitor actual results to evaluate the performance of the segment versus the forecasted targets. The segment assets are equal to total assets presented in the unaudited condensed consolidated balance sheets. The significant expenses that are regularly provided to the CODM, which include costs of goods sold, selling, general and administrative expenses and research and development expenses, are disclosed in the unaudited condensed consolidated statements of operations as a part of the consolidated net loss. Other segment items regularly provided to the CODM include interest income, net and other income (expense), each of which is disclosed as a separate line item in the unaudited condensed consolidated statements of operations. Revenues are attributable to countries based on the location of the Company’s customers: SCHEDULE OF ATTRIBUTABLE TO COUNTIES BASED ON THE LOCATION 2026 2025 For the Three Months Ended March 31, 2026 2025 Revenues United States $ 4,266 $ 6,625 Canada - 115 Total $ 4,266 $ 6,740 During the three months ended March 31, 2026, the Company derived 14 % and 11 % of its revenue from two customers. During the three months ended March 31, 2025, the Company derived 39 % and 11 % of its revenue from two customers. The distribution of the Company’s property and equipment by geographic location is approximately as follows: SCHEDULE OF PROPERTY AND EQUIPMENT BY GEOGRAPHIC LOCATION March 31, December 31, 2026 2025 Property and equipment United States $ 5,087 $ 5,400 12