What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-14 · 314 added, 404 removed, 22 unchanged (97% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

following discussion and analysis of our financial condition and results of operations should be read in conjunction with the

accompanying unaudited condensed interim consolidated financial statements and related notes included elsewhere in this

Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the

Securities and Exchange Commission on July 26, 2024.

the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “Pioneer,”

“we,” “our” and “us” refer to Pioneer Power Solutions, Inc.

and its subsidiaries.

dollars are reported in thousands except for share and per share amounts .

Note Regarding Forward-Looking Statements

Quarterly Report on Form 10-Q contains “forward-looking statements,” which include information relating to future events,

future financial performance, financial projections, strategies, expectations, competitive environment and regulation.

Words such as

“may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,”

“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,”

“estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking

statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance

or results will be achieved.

Forward-looking statements are based on information we have when those statements are made or management’s

good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance

or results to differ materially from those expressed in or suggested by the forward-looking statements.

Important factors that could

cause such differences include, but are not limited to:

economic conditions and their effect on demand for electrical equipment, particularly in the commercial construction market, but

also in the power generation, industrial production and infrastructure industries.

effects of fluctuations in sales on our business, revenues, expenses, net income (loss), income (loss) per share, margins and profitability.

of our competitors are better established and have significantly greater resources and may subsidize their competitive offerings

with other products and services, which may make it difficult for us to attract and retain customers.

potential loss or departure of key personnel, including Nathan J.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial

condition and results of operations should be read in conjunction with the accompanying unaudited condensed interim consolidated financial

statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the

year ended December 31, 2024, which was filed with the Securities and Exchange Commission on April 14, 2025.

Unless the context requires otherwise, references

in this Quarterly Report on Form 10-Q to the “Company,” “Pioneer,” “we,” “our” and “us”

refer to Pioneer Power Solutions, Inc.

and its subsidiary.

dollars are reported in thousands except for

share and per share amounts .

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking

statements,” which include information relating to future events, future financial performance, financial projections, strategies,

expectations, competitive environment and regulation.

Words such as “may,” “should,” “could,” “would,”

“predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,”

“intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements

in future tense, identify forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance

or results and may not be accurate indications of when such performance or results will be achieved.

Forward-looking statements are based

on information we have when those statements are made or management’s good faith belief as of that time with respect to future events,

and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in

or suggested by the forward-looking statements.

Important factors that could cause such differences include, but are not limited to:

General economic conditions and their effect on demand for electrical equipment, particularly in the commercial market, but also in the power generation, industrial production and infrastructure industries.

The effects of fluctuations in sales on our business, revenues, expenses, net income (loss), income (loss) per share, margins and profitability.

Many of our competitors are better established and have significantly greater resources and may subsidize their competitive offerings with other products and services, which may make it difficult for us to attract and retain customers.

The potential loss or departure of key personnel, including Nathan J.

Mazurek, our chairman, president and chief executive officer.

ability to generate internal growth, maintain market acceptance of our existing products and gain acceptance for our new products.

Unanticipated

increases in raw material prices or disruptions in supply could increase production costs and adversely affect our profitability.

ability to realize revenue reported in our backlog.

ability to remediate the material weaknesses identified in our internal control over financial reporting in our Annual Report on

Form 10-K for the year ended December 31, 2023, or inability to otherwise maintain an effective system of internal control.

effect that the restatement of the prior financial statements could have on investor confidence in us and raise reputational risk.

margin risk due to competitive pricing and operating efficiencies, supply chain risk, material, labor or overhead cost increases,

interest rate risk and commodity risk.

or labor disputes with our employees may adversely affect our ability to conduct our business.

impact of geopolitical activity on the economy, changes in government regulations such as income taxes, climate control initiatives,

the timing or strength of an economic recovery in our markets and our ability to access capital markets.

weaknesses in internal controls.

sales of large blocks of our common stock may adversely impact our stock price.

liquidity and trading volume of our common stock.

business could be adversely affected by an outbreak of disease, epidemic or pandemic, such as the global coronavirus pandemic, or

similar public threat, or fear of such an event.

ability to maintain compliance with the continued listing standards of Nasdaq.

associated with litigation and claims, which could impact our financial results and condition.

foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or

risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking

Moreover, new risks regularly emerge, and it is not possible for us to predict or articulate all risks we face, nor can

we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results

to differ from those contained in any forward-looking statements.

Except to the extent required by applicable laws or rules, we

undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future

events or otherwise.

You should review carefully the risks and uncertainties described under the heading “Part II - Item 1A.

Risk Factors” in this Quarterly Report on Form 10-Q and in the Quarterly Reports on Form 10-Q for the periods ended March 31,

2024, and June 30, 2024, and “Part I - Item 1A.

Risk Factors” in our Annual Report on Form 10-K for the year ended

December 31, 2023, for a discussion of the foregoing and other risks that relate to our business and investing in shares of our

common stock.

design, manufacture, integrate, refurbish, service, distribute and sell electric power systems, 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, electric, gas and water utilities,

data center developers and owners, EV charging infrastructure developers and owners, and distributed energy developers.

We are headquartered

in Fort Lee, New Jersey and operate from three (3) additional locations in the United States for manufacturing, service and maintenance,

engineering, and sales and administration.

of Subsidiary

October 29, 2024, the Company entered into an Equity Contribution and Purchase Agreement (the “Equity Purchase Agreement”),

by and among the Company, Pioneer Custom Electrical Products, LLC, a wholly owned subsidiary of the Company (“Pioneer Custom”),

Voltaris Power LLC (the “Buyer”) and Pioneer Investment LLC (“Investment”).

Pursuant to the terms of the Equity

Purchase Agreement, the Company agreed to:

(i) contribute

4% of all of the issued and outstanding equity interests of Pioneer Custom to Investment

(the “Rollover Interests”) in exchange for Investment issuing $2,000 of common

units (representing approximately 6% of Investment’s issued and outstanding common

units on the Closing Date (as defined below)) (the “Rollover Units”) to the Company;

all of the issued and outstanding equity interests of Pioneer Custom other than the Rollover

Interests to the Buyer ((i) and (ii) being, the “Equity Transaction”).

Equity Transaction included total consideration of (i) $48,000 in cash, subject to adjustment pursuant to the terms of the Equity Purchase

Agreement, and (ii) $2,000 in equity pursuant to Investment’s issuance of the Rollover Units to the Company.

the execution of the Equity Purchase Agreement, the Equity Transaction was consummated on October 29, 2024 (the “Closing Date”).

addition, upon the closing of the Equity Transaction, the Company and the Buyer entered into a transition services agreement, pursuant

to which (i) the Company will provide certain transition services to the Buyer for various service periods ranging from 30 days to 12

months following the Closing Date and (ii) the Buyer will provide one specific transition service to the Company until October 31, 2025.

of Business Segments

As of September 30, 2024, we had two reportable segments:

Electrical Infrastructure Equipment (“Electrical Infrastructure”) and Critical Power Solutions

(“Critical Power”).

Electrical Infrastructure business provides equipment solutions that allow customers to effectively and efficiently protect, control,

transfer, monitor and manage their electric energy usage and requirements.

These solutions are marketed principally through our Pioneer

Custom Electrical Products Corp.

(“PCEP”) brand name.

Critical Power business provides customers with our suite of mobile e-Boost© EV charging solutions, power generation equipment

and all forms of preventative maintenance, repairs, remote monitoring and other equipment service on our customers’ equipment.

These products and services are marketed by our operations headquartered in Minnesota, currently doing business under our Pioneer

eMobility (“e-Boost”), Titan Energy Systems Inc.

(“Titan”) and Pioneer Critical Power brand names.

On October 29, 2024, we closed on the sale of our Electrical Infrastructure segment.

See “Recent Developments”.

Accounting Estimates

consolidated financial statements have been prepared in accordance with U.S.

The preparation of our consolidated financial statements

requires us to make estimates and assumptions that affect the amounts and disclosures in the consolidated financial statements.

Our estimates

are based on our historical experience, knowledge of current events and actions we may undertake in the future, and on various other

factors that we believe are reasonable under the circumstances.

Our critical accounting policies and estimates are described in “Management’s

Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in our Annual Report on

Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on July 26, 2024.

There were no material changes

to our accounting policies during the nine months ended September 30, 2024.

OF OPERATIONS

of the Three and Nine Months Results

financial and operating data for our reportable business segments for the most recent reporting period is summarized below.

information, as well as the selected financial data provided in “Note 9 - Business Segment and Geographic Information”

and in our unaudited condensed interim Consolidated Financial Statements and related notes included in this Quarterly Report on Form

10-Q, should be referred to when reading our discussion and analysis of results of operations below.

summary of operating results during the three and nine months ended September 30, 2024, and 2023 are as follows:

Three Months Ended

Nine Months Ended

September 30,

(As Restated)

Electrical Infrastructure

Our ability to generate internal growth, maintain market acceptance of our existing products and gain acceptance for our new products.

Unanticipated increases in raw material prices or disruptions in supply could increase production costs and adversely affect our profitability.

Our ability to realize revenue reported in our backlog.

Our ability to remediate the ongoing material weakness identified in our internal control over financial reporting, or inability to otherwise maintain an effective system of internal control.

The effect that the identified material weakness and failure to establish and maintain effective internal control over financial reporting could have on investor confidence in us and raise reputational risk.

Operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, material, labor or overhead cost increases, interest rate risk and commodity risk.

Strikes or labor disputes with our employees may adversely affect our ability to conduct our business.

The impact of geopolitical activity on the economy, changes in government regulations such as income taxes, climate control initiatives, the timing or strength of an economic recovery in our markets and our ability to access capital markets.

Future sales of large blocks of our common stock may adversely impact our stock price.

The liquidity and trading volume of our common stock.

Our business could be adversely affected by an outbreak of disease, epidemic or pandemic, such as the global coronavirus pandemic, or similar public threat, or fear of such an event.

Our ability to maintain compliance with the continued listing standards of the Nasdaq Capital Market.

Risks associated with litigation and claims, which could impact our financial results and condition.

The foregoing does not represent an exhaustive list

of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause

our actual results to differ from those anticipated in our forward-looking statements.

Moreover, new risks regularly emerge, and it is

not possible for us to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent

to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements.

Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking

statement, whether as a result of new information, future events or otherwise.

You should review carefully the risks and uncertainties

described under the heading “Part II - Item 1A.

Risk Factors” in this Quarterly Report on Form 10-Q and “Part I - Item

Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, for a discussion of the foregoing and

other risks that relate to our business and investing in shares of our common stock.

Business Overview

We design, manufacture, integrate,

service and sell distributed energy resources, on site power generation equipment and mobile 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 business’, 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.

We intend to grow our business

through continued internal investments in product development and expansion of our manufacturing, engineering, sales and marketing personnel.

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 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

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, but not limited to, major national retailers, hospitals, data centers, communications facilities, factories,

military sites, office complexes and other critical operations.

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements

have been prepared in accordance with U.S.

The preparation of our unaudited condensed consolidated financial statements requires

us to make estimates and assumptions that affect the amounts and disclosures in the unaudited condensed consolidated financial statements.

Our estimates are based on our historical experience, knowledge of current events and actions we may undertake in the future, and on various

other factors that we believe are reasonable under the circumstances.

Our critical accounting policies and estimates are described in

“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies”

in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2025.

no material changes to our critical accounting estimates during the three months ended March 31, 2025.

RESULTS OF OPERATIONS

Overview of March 31, 2025, and 2024, Operating

Selected financial and operating data for our reportable

business segment for the most recent reporting period is summarized below.

This information, as well as the selected financial data provided

in “Note 11 - Business Segment and Geographic Information” and in our unaudited condensed consolidated financial statements

and related notes included in this Quarterly Report on Form 10-Q, should be referred to when reading our discussion and analysis of results

of operations below.

Our summary of operating results during the three months ended March 31,

2025, and 2024, are as follows:

For the Three Months Ended

Critical Power Solutions

Cost of goods sold

Electrical Infrastructure

Critical Power Solutions

3 unchanged sentences

Total operating expenses

Operating (loss) income from continuing operations

Interest expense (income)

Other expense (income)

(Loss) income before income taxes

Operating loss from continuing operations

Interest income

Other income, net

Loss before income taxes

Income tax expense

Net (loss) income

backlog is based on firm orders from our customers expected to be delivered in the future, most of which is expected to occur during

the next twelve months.

Backlog may vary significantly from reporting period to reporting period due to the timing of customer commitments.

Backlog reflects the amount of revenue we expect to realize upon the shipment of customer orders for our products that are not yet complete

or for which work has not yet begun.

As of September 30, 2024, backlog from our E-Bloc power systems and related equipment was approximately

$13,236, or 20% of the total backlog.

following table represents the progression of our backlog, by reporting segment, as of the end of the last five quarters:

September 30,

Net loss from continuing operations

Income from discontinued operations, net of income taxes

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.

vary significantly from reporting period to reporting period due to the timing of customer commitments.

Our revenue backlog as of March 31, 2025, from our

Critical Power business was $23,231, an increase of $8,209, or 54.6%, when compared to $15,022 as of March 31, 2024.

The following table represents the progression of

our backlog as of the end of the last five quarters:

September 30,

(As Restated)

Electrical Infrastructure

Critical Power Solutions

Order backlog

Discontinued operation

Total order backlog

following table represents our revenues by reporting segment and major product category for the periods indicated (in thousands, except

percentages):

Three Months Ended

Nine Months Ended

September 30,

(As Restated)

Electrical Infrastructure

The following table represents our revenues by major product category for

the periods indicated (in thousands, except percentages):

For the Three Months Ended

Critical Power Solutions

Total revenue

the three months ended September 30, 2024, our consolidated revenue decreased by $542, or 4.7%, to $10,911, down from $11,453 during

the three months ended September 30, 2023, primarily due to a decrease in sales of equipment from our Electrical Infrastructure segment

during the three months ended September 30, 2024.

the nine months ended September 30, 2024, our consolidated revenue decreased by $7,450 or 22.4%, to $25,841, down from $33,291 during

the nine months ended September 30, 2023, primarily due to a decrease in sales of equipment from our Electrical Infrastructure segment

during the nine months ended September 30, 2024.

Infrastructure .

During the three months ended September 30, 2024, revenue from our equipment sales decreased by $4,165, or 48.1%,

to $4,495, down from $8,660 during the three months ended September 30, 2023, primarily due to a decrease in shipments and revenue recognized

over time from our equipment sales during the three months ended September 30, 2024.

the nine months ended September 30, 2024, revenue from our Electrical Infrastructure segment decreased by $12,130, or 48.8%, to $12,715,

down from $24,845 during the nine months ended September 30, 2023, primarily due to a decrease in shipments and revenue recognized over

time from our equipment sales during the nine months ended September 30, 2024.

Power Solutions .

For the three months ended September 30, 2024, revenue for our Critical Power segment increased by $3,623, or 129.8%,

to $6,416, up from $2,793 during the three months ended September 30, 2023, primarily due to an increase in equipment and service sales

during the three months ended September 30, 2024.

For the three months ended September 30, 2024, revenue from our equipment sales increased

by $3,156, or 392%, to $3,961, up from $805 during the three months ended September 30, 2023, primarily due to delivering $3,000 of

e-Boost equipment during the third quarter of 2024 and no comparable shipments during the third quarter of 2023.

the nine months ended September 30, 2024, revenue for our Critical Power segment increased by $4,680, or 55.4%, to $13,126, up from $8,446

during the nine months ended September 30, 2023, primarily due to an increase in equipment and service sales during

the nine months ended September 30, 2024.

For the nine months ended September 30, 2024, revenue from our equipment sales increased by

$3,941, or 157.2%, to $6,448, up from $2,507 during the nine months ended September 30, 2023, primarily due to delivering $3,000 of e-Boost

equipment during the third quarter of 2024 and no comparable shipments during 2023.

Profit and Margin

following table represents our gross profit by reporting segment for the periods indicated (in thousands, except percentages):

Three Months Ended

Nine Months Ended

September 30,

(As Restated)

Electrical Infrastructure

Gross margin %

For the three months ended March 31, 2025, our revenue

from our Critical Power segment increased by $3,425, or 103.3% to $6,740, up from $3,315 during the three months ended March 31, 2024,

primarily due to an increase in sales and rentals of our suite of mobile EV charging solutions, e-Boost.

Gross Profit and Margin

The following table represents our gross profit for

the periods indicated (in thousands, except percentages):

For the Three Months Ended

Critical Power Solutions

Gross margin %

Consolidated gross profit

Consolidated gross margin %

the three months ended September 30, 2024, our consolidated gross margin decreased to 18.9% of revenues, as compared to 32.3% during

the three months ended September 30, 2023.

the nine months ended September 30, 2024, our consolidated gross margin decreased to 17.2% of revenues, as compared to 31.3% during the

nine months ended September 30, 2023.

Infrastructure.

For the three months ended September 30, 2024, our gross margin percentage decreased by 25.5 percentage points,

from 37.6% to 12.1%, as compared to the three months ended September 30, 2023.

The decrease was primarily due to the decrease in

sales of our power systems and switchgear equipment.

the nine months ended September 30, 2024, our gross margin percentage decreased by 21.7 percentage points, from 35.4% to 13.7%, as

compared to the nine months ended September 30, 2023.

The decrease was primarily due to the decrease in sales of our E-Bloc power

systems and medium and low voltage switchgear equipment.

Power Solutions .

For the three months ended September 30, 2024, our gross margin increased by 8 percentage points, from 15.7%

to 23.7%, for the three months ended September 30, 2023.

The increase was predominately due to the increase in sales of our e-Boost

equipment from our Pioneer eMobility business in addition to an increase in service sales.

the nine months ended September 30, 2024, our gross margin increased by 1.5 percentage points, from 19.1% to 20.6%, for the nine months ended

September 30, 2023.

The increase was predominately due to the increase in sales of our equipment and service.

following table represents our operating expenses by reportable segment for the periods indicated (in thousands, except percentages):

Three Months Ended

Nine Months Ended

September 30,

Electrical Infrastructure

Selling, general and administrative

Depreciation and amortization

Segment operating expense

Critical Power Solutions

For the three months ended March 31, 2025, our gross

margin from our Critical Power segment decreased to 2.2% of revenues, as compared to 16.1% during the three months ended March 31, 2024.

The decrease was primarily attributable to a contract with a customer in our Pioneer eMobility business, which generated

lower margins on the initial units due to higher costs incurred during the early stages of production as we refined our manufacturing

processes and optimized build efficiency.

Operating Expenses

The following table represents our operating expenses

for the periods indicated (in thousands, except percentages):

For the Three Months Ended

Selling, general and administrative

Depreciation and amortization

Research and development

Segment operating expense

Unallocated Corporate Overhead Expenses

Selling, general and administrative

Depreciation and amortization

Segment operating expense

Selling, general and administrative

Depreciation and amortization

Total operating expense

Selling, General and Administrative Expense .

For the three months ended March 31, 2025, consolidated selling, general and administrative expense increased by approximately $364, or

17.8%, to $2,414, as compared to $2,050 during the three months ended March 31, 2024, primarily due to an increase in professional fees.

As a percentage of our consolidated revenue, selling, general and administrative expense decreased to 35.8% during the three months ended

March 31, 2025, as compared to 61.8% during the three months ended March 31, 2024, primarily due to the increase in total revenue during

the three-month period ended March 31, 2025.

R&D Expenses.

Research and development

Consolidated operating expense

General and Administrative Expense .

For the three months ended September 30, 2024, consolidated selling, general and administrative

expense, before depreciation and amortization, increased by approximately $155, or 5.7%, to $2,881, as compared to $2,726 during the

three months ended September 30, 2023, primarily due to an increase in professional fees.

As a percentage of our consolidated

revenue, selling, general and administrative expense, before depreciation and amortization, increased to 26.4% during the three months

ended September 30, 2024, as compared to 23.8% in the three months ended September 30, 2023.

the nine months ended September 30, 2024, consolidated selling, general and administrative expense, before depreciation and amortization,

increased by approximately $360, or 4.6%, to $8,176, as compared to $7,816 during the nine months ended September 30, 2023, primarily

due to an increase in travel related costs.

As a percentage of our consolidated revenue, selling, general and administrative expense,

before depreciation and amortization, increased to 31.6% during the nine months ended September 30, 2024, as compared to 23.5% in the

nine months ended September 30, 2023.

and Amortization Expense.

Depreciation and amortization expense consists primarily of depreciation of fixed assets and amortization

of right-of-use assets related to our finance leases, and excludes amounts included in cost of sales.

For the three months ended September

30, 2024, consolidated depreciation and amortization expense decreased by $6, or 18.8%, to $26, as compared to $32 during the three months

ended September 30, 2023.

the nine months ended September 30, 2024, consolidated depreciation and amortization expense decreased by $119, or 63.3%, to $69, as

compared to $188 during the nine months ended September 30, 2023.

Income from Operations

following table represents our operating (loss) income by reportable segment for the periods indicated (in thousands, except percentages):

Three Months Ended

Nine Months Ended

September 30,

(As Restated)

Electrical Infrastructure

Critical Power Solutions

Unallocated corporate overhead expenses

(Loss) income from operations

Infrastructure .

Operating income from our Electrical Infrastructure segment decreased by $3,047 during the three months ended September

30, 2024, as compared to the three months ended September 30, 2023, primarily due to a decrease in sales of our electrical infrastructure

equipment and an increase in selling, general and administrative expense.

income from our Electrical Infrastructure segment decreased by $7,832 during the nine months ended September 30, 2024, as compared to

the nine months ended September 30, 2023, primarily due to a decrease in sales of our electrical infrastructure equipment and an increase

in selling, general and administrative expense.

Power Solutions .

Operating income from our Critical Power segment increased by $832 during the three months ended September 30, 2024,

as compared to the three months ended September 30, 2023, primarily due to an increase in sales of our e-Boost equipment from our Pioneer

eMobility business in addition to an increase in service sales.

loss from our Critical Power segment decreased by $605 during the nine months ended September 30, 2024, as compared to the nine months

ended September 30, 2023, primarily due to an increase in sales of our e-Boost equipment from our Pioneer eMobility business in addition

to an increase in service sales.

Corporate Expense .

Our general corporate expenses consist primarily of executive management, corporate accounting and human resources

personnel, corporate office expenses, financing and corporate development activities, payroll and benefits administration, treasury,

tax compliance, legal, stock-based compensation, public reporting costs and costs not specifically allocated to reportable business segments.

the three months ended September 30, 2024, our unallocated corporate overhead expense decreased by $178, or 16.1%, as compared to the

three months ended September 30, 2023, primarily due to a decrease in stock-based compensation expense.

the nine months ended September 30, 2024, our unallocated corporate overhead expense decreased by $319, or 9.0%, as compared to the nine

months ended September 30, 2023, primarily due to a decrease in stock-based compensation expense.

Non-Operating

Expense (Income)

Expense (Income) .

For the three and nine months ended September 30, 2024, we had interest expense of approximately $23 and interest

income of approximately $25, respectively, as compared to interest income of approximately $60 and $192, respectively, during the three

and nine months ended September 30, 2023.

We generated the majority of our interest income from our cash on hand during the nine months

ended September 30, 2024, and 2023.

Expense (Income) .

Other expense (income) in the consolidated statements of operations reports certain gains and losses associated

with activities not directly related to our core operations.

the three and nine months ended September 30, 2024, we had other non-operating expense of $1 and other non-operating income $39, respectively,

as compared to other non-operating income of $11 and $4, respectively, during the three and nine months ended September 30, 2023.

expenses in our Critical Power segment consists of costs incurred in performing research and development activities, including salaries,

benefits, overhead costs, contract services and other related costs.

During the three months ended March 31, 2025, we incurred $80 of

R&D expenses related to developing our mobile e-Boost EV charging solutions as compared to $211 during the three months ended March

Operating Loss from Continuing Operations

The following table represents our operating loss

from continuing operations for the periods indicated (in thousands):

For the Three Months Ended

Operating loss from continuing operations

During the three months ended March 31, 2025, our

operating loss from continuing operations increased by approximately $620, or 35.9%, to $2,346, as compared to $1,726 during the three

months ended March 31, 2024, primarily due to the decrease in our gross profit and an increase in selling, general and administrative

Non-Operating Income from Continuing Operations

Interest Income .

For the three months ended

March 31, 2025, we had interest income of approximately $247, as compared to interest income of approximately $31 during the three months

ended March 31, 2024.

We generated the majority of our interest income from our cash on hand during the three-month periods ended March

31, 2025, and 2024.

Other Income .

Other income in the consolidated

statements of operations reports certain gains and losses associated with activities not directly related to our core operations.

For the three-month period ended March 31, 2025, other

non-operating income was $23, as compared to $40 during the three-month period ended March 31, 2024.

for Income Taxes .

Our effective income tax rate for the three and nine months ended September 30, 2024, and 2023 was 0.0%.

Loss (Income) per Share

generated a net loss of $1,121 during the three months ended September 30, 2024, as compared to net income of $1,011 during the three

months ended September 30, 2023.

net loss per basic and diluted share for the three months ended September 30, 2024, was $0.10, as compared to net income per basic share

of $0.10 for the three months ended September 30, 2023.

generated a net loss of $4,439 during the nine months ended September 30, 2024, as compared to net income of $2,601 during the nine months

ended September 30, 2023.

net loss per basic and diluted share for the nine months ended September 30, 2024, was $0.42, as compared to net income per basic share

of $0.26 for the nine months ended September 30, 2023.

AND CAPITAL RESOURCES

On October 20, 2020, we entered into an At the Market Sale Agreement with H.C.

Wainwright & Co., LLC (“Wainwright”),

pursuant to which we may offer and sell our shares of common stock from time to time through Wainwright, acting as sales agent or principal

(the “ATM Program”).

As of September 30, 2024, the Company had $3,080 of cash on hand generated primarily from the sale of

common stock under the ATM Program.

Since October 20, 2020, and through September 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 nine months ended September 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

As of September 30, 2024, $69,853 of common stock remained available for issuance under the ATM Program.

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 between Israel and Hamas, have resulted, and may continue

to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including

those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an

unknown period of time.

As a result of the current uncertainty in economic activity, we are unable to predict the potential size and

duration of the impact on our revenue and our results of operations, if any.

The extent of the potential impact of these macroeconomic

factors on our operational and financial performance will depend on a variety of factors, including the extent of geopolitical disruption

and its impact on our clients, partners, industry, and employees, all of which are uncertain at this time and cannot be accurately predicted.

We continue to monitor the effects of these macroeconomic factors and intends to take steps deemed appropriate to limit the impact on

our business.

During the nine months ended September 30, 2024, we were able to operate substantially at capacity.

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

negatively affect our sales, marketing, and client service efforts, delay and lengthen our sales cycles, decrease our employees’,

clients’, or partners’ productivity, or create operational or other challenges, any of which could harm our business and

results of operations.

Used in Operating Activities .

Cash used in our operating activities was $4,118 during the nine months ended September 30, 2024, as

compared to $228 during the nine months ended September 30, 2023.

The increase in cash used in operating activities is primarily due

to the increase in our net loss and working capital fluctuations.

Used in Investing Activities.

Cash used in investing activities during the nine months ended September 30, 2024, was $1,277, as compared

to $2,345 during the nine months ended September 30, 2023.

Additions to property and equipment during the nine months ended September

30, 2024, were $1,277, as compared to $2,345 of additions during the nine months ended September 30, 2023.

Provided by/ (Used in) Financing Activities.

Cash provided by our financing activities was $4,893 during the nine months ended September

30, 2024, as compared to cash used in financing activities of $142 during the nine months ended September 30, 2023.

The increase in cash

provided by financing activities is primarily due to the sale of common stock under the ATM Program.

As of September 30, 2024, we had working capital of $9,103, including $3,080 of cash on hand, compared to working capital

of $9,421, including $3,582 of cash on hand as of December 31, 2023.

of Liquidity .

As of September 30, 2024, we had $3,080 of cash on hand generated primarily from the sale of common stock under

the ATM Program.

We have historically met our 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 and the sale of common stock under the ATM

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

acquisitions.

October 29, 2024, we closed on the sale of our Pioneer Custom Electrical Products, LLC subsidiary for gross cash proceeds of $48,000.

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

We expect our cash requirements to

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

We expect that product development and

promotional activities related to our new initiatives will continue in the near future and we expect to continue to incur costs

related to such activities.

We expect that our cash balance is sufficient to fund operations for the next twelve months from the

date our unaudited condensed interim consolidated financial statements are issued.

of September 30, 2024, we had no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other

relationships with unconsolidated entities or other persons that had, or that may have, a material effect on our financial condition,

changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Company had $1,277 of additions to property and equipment during the nine months ended September 30, 2024, as compared to $2,345 of additions

to property and equipment during the nine months ended September 30, 2023.

Trends, Events, Uncertainties and Factors That May Affect Future Operations

believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors, including

the cyclical nature of the electrical equipment industry and the markets for our products and services.

Our operating results could also

be impacted by changing customer requirements and exposure to fluctuations in prices of important raw supplies, such as copper, steel

and aluminum.

We have various insurance policies, including cybersecurity, covering risks in amounts that we consider adequate.

to these measures, we attempt to recover other cost increases through improvements to our manufacturing efficiency and through increases

in prices where competitively feasible.

Lastly, other economic conditions we cannot foresee may affect customer demand.

the consequences of the ongoing geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine and the ongoing conflict

between Israel and Hamas, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult

to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market

volatility, which may in turn adversely affect our business and operations.

We predominately sell to customers in the industrial production

and commercial construction markets.

Accordingly, changes in the condition of any of our customers may have a greater impact than if

our sales were more evenly distributed between different end markets.

For a further discussion of factors that may affect future operating

results see the sections entitled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q

and “Part I - Item 1A.

For the three months ended March 31, 2025 and 2024, the Company recorded no income tax provision, resulting in an

effective tax rate (ETR) of 0%.

current quarter’s 0% effective tax rate primarily reflects:

continued application of a full valuation allowance on the Company’s federal, state,

and foreign deferred tax assets;

absence of any discrete income-generating events or significant attribute utilization;

impact of non-deductible permanent items, including meals & entertainment, officer compensation

subject to §162(m), and penalties;

recognition of return-to-provision (RTP) or foreign tax credit (FTC) benefits during the

absence of any tax rate changes or deferred remeasurement activity.

to continued volatility in operating results and the non-reliability of full-year forecasted income, management determined that it was not practicable to

compute a reliable annual effective tax rate.

As such, the Company applied the discrete method under ASC 740-270-30-18 to determine the

tax provision for the quarter.

Company expects to continue applying the discrete method until a reliable forecast of annual

taxable income can be established.

Net Loss per Share from Continuing Operations

We generated a net loss from continuing operations

of $2,076 during the three months ended March 31, 2025, as compared to $1,655 during the three months ended March 31, 2024.

Our net loss from continuing operations per basic

and diluted share during the three months ended March 31, 2025, was $0.19, compared to a net loss from continuing operations per basic

and diluted share of $0.16 during the three months ended March 31, 2024.

from Discontinued Operations

from discontinued operations, net of tax was $1,147, during the three months ended March 31, 2025, as compared to $620 during the three

months ended March 31, 2024.

The $1,147 of income recognized during the three months ended March 31, 2025, was due to finalizing the

net working capital adjustment with the buyer of the PCEP Sale.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2025, we had $25,840 of cash on hand generated primarily from the PCEP Sale.

On October 29, 2024, we closed on the

PCEP Sale for gross cash proceeds of $48,000 and $2,000 in equity.

On January 7, 2025, we paid a one-time special cash dividend of

an aggregate of $16,665.

As of December 31, 2024, the Company recorded a consideration due to the buyer of the PCEP Sale of $3,347

related to a net working capital adjustment.

On April 16, 2025, we and the buyer from the PCEP Sale finalized the net working

capital adjustment and as a result, we recorded a $1,147 adjustment to the consideration due to the buyer of the PCEP Sale.

Subsequent to March 31,

2025, we paid the $2,200 consideration to the buyer of the PCEP Sale.

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

which may decrease demand for a broad variety of goods and services, including those provided by our 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, we are unable to predict

the potential size and duration of the impact on our revenue and our results of operations, if any.

The extent of the potential impact

of these macroeconomic factors on our operational and financial performance will depend on a variety of factors, including the extent

of geopolitical disruption and its impact on our clients, partners, industry, and employees, all of which are uncertain at this time and

cannot be accurately predicted.

We continue to monitor the effects of these macroeconomic factors and intend to take steps deemed appropriate

to limit the impact on our business.

During the three months ended March 31, 2025, we were able to operate substantially at capacity.

There can be no assurance that precautionary measures,

whether adopted by us or imposed by others, will be effective, and such measures could negatively affect our sales, marketing, and client

service efforts, delay and lengthen our sales cycles, decrease our employees’, clients’, or partners’ productivity,

or create operational or other challenges, any of which could harm our business and results of operations.

The cash flows related to the discontinued operations

have not been segregated and are included in the unaudited condensed consolidated statements of cash flows.

Cash Provided by/ Used in Operating Activities .

Cash provided by our operating activities was $1,502 during the three months ended March 31, 2025, as compared to cash used in our operating

activities of $1,950 during the three months ended March 31, 2024.

The decrease in cash used in operating activities is primarily due

to working capital fluctuations.

Cash Used in Investing Activities.

in investing activities during the three months ended March 31, 2025, was $595, as compared to cash used in our investing activities of

$213 during the three months ended March 31, 2024.

During the three-month periods ended March 31, 2025, and 2024, additions to our property

and equipment were $595 and $213, respectively.

Cash Used in/ Provided by Financing Activities.

Cash used in our financing activities was $16,689 during the three months ended March 31, 2025, as compared to cash provided by our financing

activities $4,808 during the three months ended March 31, 2024.

The increase in cash used in financing activities is primarily due to

the payment of a one-time special cash dividend.

Working Capital .

As of March 31, 2025, we had

working capital of $26,151, including $25,840 of cash on hand, compared to working capital of $26,679, including $41,622 of cash on hand

as of December 31, 2024.

Assessment of Liquidity .

As of March 31, 2025,

we had $25,840 of cash on hand generated primarily from the PCEP Sale.

We have historically met our 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,

the completion of the PCEP Sale in October 2024 and the sale of common stock.

Historically, our cash requirements were generally for operating

activities, debt repayment, capital improvements and acquisitions.

We expect to meet our cash needs with our working

capital and cash flows from operating activities.

We expect our cash requirements to be generally for operating activities, capital improvements

and product development.

We expect that product development and promotional activities related to our new initiatives will continue in

the near future and we expect to continue to incur costs related to such activities.

We expect that our cash balance is sufficient to

fund operations for the next twelve months from the date our unaudited condensed consolidated financial statements are issued.

As of March 31, 2025, we had no off-balance sheet

transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other

persons that had, or that may have, a material effect on our financial condition, changes in financial condition, revenues or expenses,

results of operations, liquidity, capital expenditures or capital resources.

Capital Expenditures

Our additions to property and equipment were $595

during the three months ended March 31, 2025, as compared to $213 of additions during the three months ended March 31, 2024.

Known Trends, Events, Uncertainties and Factors

That May Affect Future Operations

We believe that our future operating results will

continue to be subject to quarterly variations based upon a wide variety of factors, including the cyclical nature of the electrical equipment

industry and the markets for our products and services.

Our operating results could also be impacted by changing customer requirements

and exposure to fluctuations in prices of important raw supplies, such as copper, steel and aluminum.

We have various insurance policies,

including cybersecurity, covering risks in amounts that we consider adequate.

In addition to these measures, we attempt to recover other

cost increases through improvements to our manufacturing efficiency and through increases in prices where competitively feasible.

other economic conditions we cannot foresee may affect customer demand.

In addition, the consequences of the ongoing geopolitical conflicts,

such as the ongoing conflict between Russia and Ukraine and the ongoing conflict between Israel and Hamas, including related sanctions

and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and

macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business

and operations.

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.

We predominately sell to customers in the

industrial production and commercial construction markets.

Accordingly, changes in the condition of any of our customers may have a greater

impact than if our sales were more evenly distributed between different end markets.

For a further discussion of factors that may affect

future operating results see the sections entitled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report

on Form 10-Q and “Part I - Item 1A.

Risk Factors” in our Annual Report on Form 10-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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 2. Management’s Discussion and Analysis