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) For the Three Months Ended March 31, 2025 2024 Revenues $ 6,740 $ 3,315 Cost of goods sold 6,592 2,780 Gross profit 148 535 Operating expenses Selling, general and administrative 2,414 2,050 Research and development 80 211 Total operating expenses 2,494 2,261 Operating loss from continuing operations ( 2,346 ) ( 1,726 ) Interest income, net 247 31 Other income, net 23 40 Loss before income taxes ( 2,076 ) ( 1,655 ) Income tax benefit - - Net loss from continuing operations ( 2,076 ) ( 1,655 ) Income from discontinued operations, net of income taxes 1,147 620 Net loss $ ( 929 ) $ ( 1,035 ) Basic (loss) earnings per share: Loss from continuing operations $ ( 0.19 ) $ ( 0.16 ) Earnings from discontinued operations 0.10 0.06 Basic loss per share $ ( 0.09 ) $ ( 0.10 ) Diluted (loss) earnings per share: Loss from continuing operations $ ( 0.19 ) $ ( 0.16 ) Earnings from discontinued operations 0.10 0.06 Diluted loss per share $ ( 0.09 ) $ ( 0.10 ) Weighted average common shares outstanding: Basic 11,120,266 10,112,310 Diluted 11,187,484 10,343,236 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 amounts) (Unaudited) March 31, December 31, 2025 2024 ASSETS Current assets Cash $ 25,840 $ 41,622 Accounts receivable, net of allowance for credit losses of $ 14 and $ 13 as of March 31, 2025 and December 31, 2024, respectively 5,345 7,826 Inventories 6,456 6,068 Prepaid expenses and other current assets 985 1,141 Total current assets 38,626 56,657 Property and equipment, net 6,193 6,503 Operating lease right-of-use assets 472 530 Financing lease right-of-use assets 198 221 Investments 1,943 2,000 Other assets 44 40 Total assets $ 47,476 $ 65,951 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued liabilities $ 4,720 $ 4,543 Current portion of operating lease liabilities 223 244 Current portion of financing lease liabilities 107 109 Deferred revenue 1,146 991 Consideration due to buyer 2,200 3,347 Income taxes payable 4,079 4,079 Dividend payable - 16,665 Total current liabilities 12,475 29,978 Operating lease liabilities, non-current portion 262 301 Financing lease liabilities, non-current portion 99 121 Other long-term liabilities 127 122 Total liabilities 12,963 30,522 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; 11,120,266 shares issued and outstanding on March 31, 2025, and December 31, 2024 11 11 Additional paid-in capital 35,431 35,418 Accumulated deficit ( 929 ) - Total stockholders’ equity 34,513 35,429 Total liabilities and stockholders’ equity $ 47,476 $ 65,951 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) For the Three Months Ended March 31, 2025 2024 Operating activities Net loss $ ( 929 ) $ ( 1,035 ) Adjustments to reconcile net loss to net cash provided by/ (used in) operating activities: Depreciation 258 122 Amortization of right-of-use financing leases 23 32 Amortization of right-of-use operating leases 58 179 Change in allowance for credit losses 2 49 Stock-based compensation 13 225 Loss attributable to equity method investee 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 2,479 ( 2,235 ) Inventories 32 ( 2,011 ) Prepaid expenses and other assets 424 217 Accounts payable, accrued liabilities and other liabilities 103 ( 296 ) Deferred revenue 155 2,989 Operating lease liabilities ( 55 ) ( 186 ) Net cash provided by/ (used in) operating activities 1,502 ( 1,950 ) Investing activities Purchase of property and equipment ( 595 ) ( 213 ) Net cash used in investing activities ( 595 ) ( 213 ) Financing activities Net proceeds from issuance of common stock - 4,841 Payment of cash dividend ( 16,665 ) - Principal repayments of financing leases ( 24 ) ( 33 ) Net cash (used in)/ provided by financing activities ( 16,689 ) 4,808 (Decrease) increase in cash ( 15,782 ) 2,645 Cash Cash, beginning of year 41,622 3,582 Cash, end of year $ 25,840 $ 6,227 Supplemental cash flow information: Interest paid $ - $ 9 Non-cash investing and financing activities: Transfer from property and equipment to inventory ( 420 ) - Property and equipment obtained in exchange for accounts payable 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) Additional Total Common Stock paid-in Accumulated stockholders’ Shares Amount capital deficit equity Balance - January 1, 2024 9,930,022 $ 10 $ 33,837 $ ( 19,629 ) $ 14,218 Net loss - - - ( 1,035 ) ( 1,035 ) Stock-based compensation - - 225 - 225 Issuance of common stock, net of transaction costs 891,838 1 4,650 - 4,651 Balance - March 31, 2024 10,821,860 $ 11 $ 38,712 $ ( 20,664 ) $ 18,059 Balance - January 1, 2025 11,120,266 $ 11 $ 35,418 $ - $ 35,429 Balance 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 11,120,266 $ 11 $ 35,431 $ ( 929 ) $ 34,513 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 for the Quarterly Period Ended March 31, 2025 (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. Pioneer’s products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Pioneer’s customers include, but are not limited to, federal and state government entities, package delivery business’, school bus fleet operations, EV charging infrastructure developers and owners, and distributed energy developers. Pioneer is headquartered in Fort Lee, New Jersey and operates 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, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2025. 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. The Company is currently in the process of estimating its annual effective tax rate for the year ending December 31, 2025, and, as such, the annual effective tax rate is unknown. 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 interim 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, 2024. Liquidity The accompanying condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated financial statements, as of March 31, 2025, the Company had $ 25,840 of cash on hand and working capital of $ 26,151 . The cash on hand was generated primarily from the sale (the “PCEP Sale”) of the Company’s former wholly owned subsidiary, Pioneer Custom Electrical Products Corp. (“PCEP”). On October 29, 2024, the Company closed on the PCEP sale for gross cash proceeds of $ 48,000 and $ 2,000 in equity. 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, the Company and the buyer of the PCEP Sale finalized the net working capital adjustment and as a result, the Company recorded a $ 1,147 adjustment to the consideration due to the buyer of the PCEP Sale. See Note 8 – Discontinued Operations for details . The Company has historically met its cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the sale of the transformer business units in August 2019, the completion of the sale of the PCEP business unit in October 2024, and the sale of common stock. Historically, the Company’s cash requirements were generally for operating activities, debt repayment, capital improvements and acquisitions. The Company expects to meet its cash needs with the working capital and cash flows from the Company’s operating activities. The Company expects its cash requirements to be generally for operating activities, product development and capital improvements. The Company expects that its current cash balance is sufficient to fund operations for the next twelve months from the date our unaudited condensed consolidated financial statements are issued. 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 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 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. Amounts may not foot due to rounding. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Since the Annual Report for the year ended December 31, 2024, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows. This standard is effective for the Company’s annual reporting beginning January 1, 2025 with early adoption permitted. The Company is currently assessing the impact that adoption of this new accounting guidance will have on its consolidated financial statements and footnote disclosures. In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220- 40)”, and in January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”. This standard requires public companies to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The new standard, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact that adoption of this new accounting guidance will have on its consolidated financial statements and footnote disclosures. Revenue Recognition Bill and Hold Arrangements From time to time, the Company enters into bill and hold arrangements, whereby the Company sells mobile EV charging equipment and the equipment is warehoused at a Company or third party location pursuant to directions received from the Company’s customer. Even though the equipment is not physically in the customer’s possession, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in a bill and hold arrangement when: customer acceptance specifications have been met, legal title has transferred, the customer has a present obligation to pay for the product and the risk and rewards of ownership have transferred to the customer. Additionally, all the following bill and hold criteria must be met in order for control to be transferred to the customer: the reason for the bill and hold arrangement is substantive, the customer has requested the product be warehoused, the product has been identified as separately belonging to the customer, the product is currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or direct it to another customer. 6 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 Electrical Infrastructure business (included in discontinued operations; see Note 8 – Discontinued Operations for details) provided electric power systems and equipment and distributed energy resources that helped customers effectively and efficiently protect, control, transfer, monitor and manage their electric energy needs. 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, contract assets 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, 2025, and 2024, the Company recognized $ 150 and $ 45 of equipment revenue over time, respectively, from its Critical Power segment. Additionally, the Company recognized $ 3,623 and $ 1,064 of revenue at a point in time from the sale of its products, which is typically recognized upon delivery, from its Critical Power segment during the three months ended March 31, 2025, and 2024, respectively. Included within point in time revenue during the three months ended March 31, 2025, was $ 2,337 of revenue recognized pursuant to bill and hold arrangements. There were no bill and hold arrangements during the three months ended March 31, 2024. 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 $ 2,444 and $ 1,881 of service revenue during the three months ended March 31, 2025, and 2024, respectively. Under its continuing operations, 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. The change in deferred revenue as of March 31, 2025, was driven primarily by ordinary course contract activity. As of January 1, 2024, the Company had a deferred revenue balance of $ 307 . For the three months ended March 31, 2025, and 2024, the Company recognized revenue of $ 230 and $ 113 respectively, related to amounts that were included in deferred revenue as of December 31, 2024, and 2023, respectively, resulting primarily from the progress made on the various active contracts during the respective reporting periods. As of March 31, 2025, the Company had $ 1,146 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 For the three months ended March 31, 2025, the Company derived 39 % and 11 % of its revenue from two customers. For the three months ended March 31, 2024, the Company derived 23 % and 16 % of its revenue from two customers. As of March 31, 2025, one customer’s outstanding receivable balance equaled 49 % of the total outstanding receivable balance. As of December 31, 2024, one customer’s outstanding receivable balance equaled 72 % of the total outstanding 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, 2025, were $ 370 , and returns and warranties during the three months ended March 31, 2024, were insignificant. 7 Disaggregated Revenue The following table presents the Company’s revenues disaggregated by revenue discipline: SCHEDULE OF REVENUE DISAGGREGATED For the Three Months Ended March 31, 2025 2024 Revenues - ASC 606 Products $ 3,773 $ 1,109 Services 2,444 1,881 Total revenues - ASC 606 6,217 2,990 Revenues - ASC 842 Fixed lease revenue 523 325 Total revenues - ASC 842 523 325 Total revenue $ 6,740 $ 3,315 Lease Revenues There were no leasing revenues arising from variable lease payments during the three-month periods ended March 31, 2025, and 2024. The following table presents future operating lease payments to be received as of March 31, 2025: SCHEDULE OF FUTURE OPERATING LEASE PAYMENTS TO BE RECEIVED For the Years Ending December 31, Total 2025 $ 1,107 2026 743 2027 200 2028 200 2029 142 Total $ 2,392 4. INVENTORIES The components of inventories are summarized below: SCHEDULE OF INVENTORIES March 31, December 31, 2025 2024 Raw materials $ 5,364 $ 4,899 Work in process 1,092 1,169 Total inventories $ 6,456 $ 6,068 8 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, 2025 2024 Accounts payable $ 3,376 $ 3,054 Accrued liabilities 1,344 1,489 Total accounts payable and accrued liabilities $ 4,720 $ 4,543 Accrued liabilities primarily consist of accrued insurance, accrued compensation and benefits and accrued warranty costs. As of March 31, 2025, and December 31, 2024, accrued insurance was $ 282 and $ 462 , respectively. Accrued compensation and benefits as of March 31, 2025, and December 31, 2024, were $ 196 and $ 453 , respectively. Accrued warranty costs as of March 31, 2025, and December 31, 2024, were $ 157 and $ 117 , respectively. The remainder of accrued liabilities are comprised of several insignificant accruals in connection with normal business operations. 6. STOCK-BASED COMPENSATION A summary of stock option activity during the three months ended March 31, 2025, 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, 2025 561,476 $ 4.22 Granted - - Exercised - - Forfeited/expired ( 7,309 ) 6.56 Outstanding as of March 31, 2025 554,167 4.19 5.07 $ 214 Exercisable as of March 31, 2025 537,498 4.15 4.97 214 Stock-based compensation expense recorded for the three months ended March 31, 2025, and 2024, was approximately $ 13 and $ 225 , respectively. As of March 31, 2025, there was $ 68 of stock-based compensation expense remaining to be recognized in the consolidated statements of operations over a weighted average remaining period of 1.3 years. 7. INCOME TAXES For the three months ended March 31, 2025, the Company recorded no provision for income taxes, resulting in an effective tax rate (ETR) of 0 %, compared to the U.S. federal statutory rate of 21 %. The difference between the Company’s ETR and the statutory rate was primarily driven by the following significant reconciling items: (i) Full valuation allowance on federal, state, and foreign deferred tax assets: As the Company continues to project that it is not more likely than not that deferred tax assets will be realized, no tax benefit was recognized on current quarter losses or deductible temporary differences; (ii) Non-deductible permanent items, including meals & entertainment, officer compensation under IRC §162(m), and penalties, which increased the statutory rate differential; (iii) Absence of discrete benefits from foreign tax credit (FTC) utilization or R&D credit return-to-provision (RTP) adjustments in the current period; (iv) No tax rate changes or deferred remeasurement items were recorded in the quarter. As a result, despite incurring a pre-tax loss in the quarter, the Company recorded no tax benefit. The Company also notes that the prior year December 31, 2024 effective tax rate was 29.75 %, primarily due to a discrete gain on the sale of a subsidiary that generated taxable income and allowed the Company to utilize previously reserved capital loss and net operating loss carryforwards, resulting in a partial release of the valuation allowance. No such income or attribute utilization occurred in the current period. Additionally, due to earnings volatility and the non-reliability of full-year forecasted income, management concluded it was not practicable to estimate a reliable annual effective tax rate. As such, the Company applied the discrete method under ASC 740-270-30-18 to calculate the interim income tax provision. The Company will continue to apply the discrete method until reliable forecast data becomes available to support a forecast-based ETR. 9 8. DISCONTINUED OPERATIONS Sale of Electrical Infrastructure Segment On October 29, 2024, the Company entered into an Equity Contribution and Purchase Agreement (the “Equity Purchase Agreement”), by and among the Company, PCEP, 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 PCEP 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; and (ii) sell all of the issued and outstanding equity interests of PCEP other than the Rollover Interests to the Buyer ((i) and (ii) being, the “Equity Transaction”). The 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. As of December 31, 2024, the Company recorded a consideration due to the Buyer of $3,347 related to a net working capital adjustment. On April 16, 2025, the Company and the Buyer finalized the net working capital adjustment and as a result, the Company recorded a $ 1,147 reduction in the consideration due to the Buyer, which is included as a component of discontinued operations during the three months ended March 31, 2025. Subsequent to March 31, 2025, the Company paid the $ 2,200 consideration to the Buyer. The Company previously determined that the Electrical Infrastructure business qualified for discontinued operations and as such, the financial results of the Electrical Infrastructure business are reflected as discontinued operations in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2024. Discontinued Operation Financial Information The following table summarizes the results from discontinued operations, net of tax, included in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2025, and 2024: SCHEDULE OF DISCONTINUED OPERATION FINANCIAL INFORMATION For the Three Months Ended March 31, 2025 2024 Revenues $ - $ 5,275 Cost of goods sold - 4,082 Gross profit - 1,193 Operating expenses Selling, general and administrative - 573 Total operating expenses - 573 Operating income from discontinued operations - 620 Interest expense - - Gain on sale of business, net of taxes ( 1,147 ) - Other expense - - Net income from discontinued operations $ 1,147 $ 620 9. EQUITY-METHOD INVESTMENT As disclosed in Note 8 – Discontinued Operations, on October 29, 2024, the Company deconsolidated its subsidiary, PCEP. As part of the transaction, the Company retained an equity interest in Pioneer Investment LLC via the issuance of Rollover Units. During the three months ended March 31, 2025, the Company recorded a loss from equity method investee of $ 57 , which is included in other income on the unaudited condensed consolidated statement of operations. 10 10. 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. A reconciliation of basic and diluted earnings (loss) per share is as follows (in thousands, except per share data): SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE For the Three Months Ended March 31, 2025 2024 Numerator: Loss from continuing operations $ ( 2,076 ) $ ( 1,655 ) Income from discontinued operations, net of income taxes 1,147 620 Net loss $ ( 929 ) $ ( 1,035 ) Denominator: Weighted average common shares outstanding - basic 11,120,266 10,112,310 Effect of dilutive securities: Stock options 67,218 127,531 Restricted stock units - 103,395 Weighted average common shares outstanding - diluted 11,187,484 10,343,236 Basic (loss) earnings per share: Loss per share from continuing operations $ ( 0.19 ) $ ( 0.16 ) Earnings per share from discontinued operations 0.10 0.06 Basic loss per share $ ( 0.09 ) $ ( 0.10 ) Diluted (loss) earnings per share: Loss per share from continuing operations $ ( 0.19 ) $ ( 0.16 ) Earnings per share from discontinued operations 0.10 0.06 Diluted loss per share $ ( 0.09 ) $ ( 0.10 ) 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 For the Three Months Ended March 31, 2025 2024 Stock options 387,500 345,500 Total 387,500 345,500 11 11. 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. 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 the 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 income (loss). The other segment item that is regularly provided to the CODM includes other income (expense) which is disclosed as a separate line item in the unaudited condensed consolidated statements of operations. Other income and expenses consist of interest income and interest expense, which are disclosed as separate line items in the unaudited condensed consolidated statements of operations. On October 29, 2024, the Company sold its Electrical Infrastructure segment to Mill Point Capital. Prior to the sale of the Electrical Infrastructure segment, the Company’s CODM assessed performance and allocated resources amongst its two reportable segments. See Note 8 - Discontinued Operations for additional information. Revenues are attributable to countries based on the location of the Company’s customers: SCHEDULE OF ATTRIBUTABLE TO COUNTIES BASED ON THE LOCATION For the Three Months Ended March 31, 2025 2024 Revenues United States $ 6,625 $ 3,315 Canada 115 - Total $ 6,740 $ 3,315 Approximately 39 % and 11 % of the Company’s revenues during the three months ended March 31, 2025, were made to Eneridge Inc. and Verizon Communications Inc., respectively. Approximately 23 % and 16 % of the Company’s revenues during the three months ended March 31, 2024, were made to AssetWorks, Inc. and Verizon Communications Inc., respectively. 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, 2025 2024 Property and equipment United States $ 6,193 $ 6,503 12