What changed in this filing

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Item 1. Business

2023-04-14 compared with 2022-03-31 · 79 added, 107 removed, 220 unchanged (46% of the section changed)

12 unchanged sentences

End Market Product Categories Equipment/Products (End Use)

Power Systems (Energy)* Electric Power Generation (“Gensets”)

Power Systems * Electric Power Generation (“Gensets”)

Large Custom Genset Enclosures Mobile and Stationary Gensets for:

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The Company’s engines and power systems include both emission-certified compression and spark-ignited internal combustion engines ranging from 0.99 liters (“L”) to 53L of displacement, which are enabled by advanced controls to run on a wide variety of clean, alternative fuels, including natural gas, propane, and biofuels, as well as gasoline and diesel options, within the power systems, industrial and transportation end markets.

COVID-19 and other Recent Business Impacts

The ongoing COVID-19 pandemic has resulted in the implementation of significant governmental measures to control the spread of the virus, including quarantines, travel restrictions, business shutdowns and restrictions on the movement of people in the United States and abroad.

During 2020 and 2021, as a result of the COVID-19 pandemic, the global economy experienced substantial turmoil, which led to challenging market conditions across certain areas of the Company’s business.

In addition, due to unprecedented decreases in demand, an oil price war, and economic uncertainty resulting from the COVID-19 pandemic, average crude oil prices were considerably lower in 2020 as compared to prices at the end of 2019.

At year-end 2021, crude oil prices were 55% above prices at year-end 2020.

However, U.S.

rig counts have been slower to return as the average count for 2021 was up 10% versus 2020 and average rig counts remain significantly below the full year 2019 average.

Meanwhile, the Company believes that capital spending within the U.S.

oil markets during 2021 remained well below 2019 levels.

These factors have contributed to a continued challenging environment for the sale of the Company’s oil and gas related products during 2021.

A significant portion of the Company’s sales and profitability has historically been derived from the sale of products that are used within the oil and gas industry.

In addition, the Company experienced delays in its supply chain during 2021 due to temporary shortages of raw materials and container delays of overseas materials as bottlenecks occurred at ports in Asia and North America.

This, in turn, caused delivery delays to some of the Company’s customers.

The Company also experienced inflationary cost pressures for certain materials and shipping-related costs.

Additionally, the Company has also experienced higher tariff costs as a result of the non-renewal of certain tariff exclusions that expired at the end of 2020.

The Company is working to mitigate the impact of these matters through price increases and other measures, such as seeking certain tariff exclusions, where possible.

The potential for continued disruptions, economic uncertainty, and unfavorable oil and gas market dynamics may have a material adverse impact on the timing of delivery of customer orders and the levels of future customer orders.

Lastly, during 2021, the Company incurred significantly higher legal costs due to its obligation to indemnify certain former officers and employees of the Company.

Specifically, spending activity was elevated during 2021 due to the USAO trial involving former officers and employees of the Company that occurred during the year.

With a verdict reached in the USAO trial matter in September 2021, the Company believes its costs related to the matter will cease.

However, at this time, the Company is not able to estimate the potential future amount of its indemnity obligations related to the pending SEC matter involving prior officers and employees.

Commitments and Contingencies for further discussion of the Company’s indemnification obligations.

Accordingly, the above challenges may continue to have a material adverse impact on the Company’s future results of operations, financial position, and liquidity.

Strategic Initiatives/Growth Strategies

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The Company also continues to transform its manufacturing operations through the ongoing adoption of lean, agile and flexible lines, which provides opportunities for improved efficiency, margins and profitability, particularly as volume and sales improve.

The Company has also been investing heavily in the expansion of its heavy-duty engine product line, particularly through its collaboration with Weichai.

The Company has also been investing heavily in the expansion of its heavy-duty engine product line, particularly through its collaboration with

Weichai America Corp., a wholly-owned subsidiary of Weichai Power Co., Ltd.

(HK2338, SZ000338) (herein collectively referred to as “Weichai”).

This product line has historically provided better margins.

During 2021, the Company continued to incur substantial legal costs related to governmental investigation matters and its obligations to indemnify certain former officers and employees of the Company.

Specifically, spending activity was elevated during 2021 due to the USAO trial involving former officers and employees of the Company that occurred.

With a verdict reached in the USAO trial matter in September 2021, the Company believes its costs related to the matter will cease.

However, at this time, the Company is not able to estimate the potential future amount of its indemnity obligations related to the pending SEC matter involving prior officers and employees.

The Company also continues to incur costs related to the remediation of the deficiencies in its internal control over financial reporting and for the enhancement of its corporate compliance program pursuant to the Non-Prosecution Agreement (“NPA”) with the USAO.

Upon the conclusion of these matters, the Company expects to see a decline in these expenses.

Warranty expense mitigation efforts

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As part of this program, the Company has adopted tighter controls, monitors major areas of spending and is centralizing certain business processes.

During 2021, the Company took rightsizing actions to align its staffing with current needs, while also streamlining certain roles.

These actions, when coupled with attrition, contributed to the reduction headcount by approximately 100 positions totaling approximately 12.5%.

The Company continues to review its facilities footprint in light of its current and planned business mix and its evolving needs.

To date, these efforts resulted in the exit and sublease of its Hanover Park, IL materials and warehousing facility which is expected to generate annualized savings of approximately $1.3 million.

with approximately $0.9 million expected to be realized in 2022.

During 2022, the Company continues to align its staffing with current needs and streamlining certain roles.

Strengthen the business through the optimization of business systems and technology

The Company is working to strengthen its business through the optimization of its business systems and technology to support the remediation of internal controls, improve processes, drive greater operational efficiencies and provide better and timelier decision making across the organization.

As part of this initiative, the Company is working on the continued enhancement and optimization of its Enterprise Resource Planning system and associated workflows.

The Company is working to strengthen its business through the optimization of its business systems and technology to support the strengthening of internal controls, improve processes, drive greater operational efficiencies and provide better and timelier decision making across the organization.

The Company also continues to work on the enhancement and optimization of its Enterprise Resource Planning system and associated workflows.

Grow the business in the highest return on investment areas

The Company has been a major participant in the power systems market for many years as a supplier to several of the world’s leading power generation companies and through its large custom Generator Set (“Genset”) enclosure business.

Building on its broad product offering the Company received EPA certification for its 32L and 40L heavy-duty engines in 2018 and for its 53L heavy-duty engines in 2019.

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The key trends include the following:

• the worldwide growth of intermittent sources of energy, such as wind and solar, and an aged electric grid in the United States, coupled with power outage activity due to weather or power shutdowns, which is driving increased demand for generators, microgrids and demand response equipment;

• increasingly stringent regulations and growing efforts to reduce emissions, which are driving demand for clean energy and alternatives to diesel power engines (e.g., EPA Tier 4 emission standards, CARB regulations, MEE policies in China, and grants, rebates and other incentives for adopting clean energy applications), in particular, in several markets such as the power generation market for microgrids and oil and gas applications, school bus and arbor care market, among others;

• growth in datacenters and their increasing demand for electricity, which is driving growth for backup power (commercial generators/microgrids);

• the worldwide growth of intermittent sources of energy, such as wind and solar, and an aged electric grid in the United States, coupled with power outage activity due to weather or power shutdowns, are driving increased demand for generators, microgrids and demand response equipment;

• increasingly stringent regulations and growing efforts to reduce emissions are driving demand for clean energy and alternatives to diesel power engines (e.g., EPA Tier 4 emission standards, CARB regulations, MEE policies in China, and grants, rebates and other incentives for adopting clean energy applications), in several markets such as the power generation market for microgrids and oil and gas applications, school bus and arbor care markets, among others;

• growth in data centers and their increasing demand for electricity, which is driving growth for backup power (commercial generators/microgrids);

• growth in e-commerce activity around the world, which is driving demand for last-mile delivery vehicles;

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New product expansion by leveraging deep industry experience

Throughout the Company’s history, it has evolved from a provider of diesel power systems to become a major supplier of power systems fueled by alternatives to diesel, including gasoline, propane, and natural gas, among others.

Throughout the Company’s history, it has evolved from a provider of diesel power systems to becoming a major supplier of power systems fueled by alternatives to diesel, including gasoline, propane, and natural gas, among others.

By leveraging the deep industry experience of its engineering and new-product development teams, the Company is continuing to take steps to broaden the range of its power system product offerings, including engine classes, power ratings and the OEM and direct user market categories into which it supplies products.

The Company plans to capitalize on its technologically sophisticated, in-house design, prototyping, testing and application engineering capabilities to further refine its superior power system te chnology.

The Company plans to capitalize on its technologically sophisticated, in-

house design, prototyping, testing and application engineering capabilities to further refine its superior power system te chnology.

Leverage the Company’s relationship with Weichai

In March 2017, the Company executed a share purchase agreement (the “SPA”) with Weichai America Corp., a wholly owned subsidiary of Weichai Power Co., Ltd.

(HK2338, SZ000338) (herein collectively referred to as “Weichai”).

In March 2017, the Company executed a share purchase agreement (the “SPA”) with Weichai America Corp.

Under the terms of the SPA, Weichai invested $60.0 million in the Company (the “Weichai Transactions”) by purchasing a combination of newly issued Common Stock and preferred stock, par value $0.001 (the “Preferred Stock”), as well as a stock purchase warrant, which significantly strengthened the Company’s financial condition and contributed to the extinguishment of its $60.0 million term loan in 2017.

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The Company and Weichai also entered into a strategic collaboration agreement (the “Collaboration Agreement”) under which they have been working together to accelerate market opportunities for each company’s respective product lines across various geographic and end-user markets.

The Collaboration Agreement was extended for three years in March 2020 and was set to expire in March 2023 .

On March 22, 2023, the Collaboration Agreement was extended for an additional term of three years.

The Collaboration Agreement provides the Company with strategic benefits and opportunities, including the ability to leverage Weichai’s strengths and capabilities in R&D, manufacturing, procurement and distribution and its widespread sales channels in China and other emerging markets.

This collaboration has enabled the Company to broaden its existing product portfolio, improve material quality, decrease costs, accelerate the development of new products and bring them to market, and expand access and exposure to new markets.

Among other things, the Collaboration Agreement establishes a joint steering committee, permits Weichai to second a limited number of certain technical, marketing, sales, procurement and finance personnel to work at the Company and establishes several collaborations, including with respect to stationary natural gas applications and Weichai diesel engines.

The Collaboration Agreement also provides for the steering committee to create different subcommittees with various operating roles, and it otherwise governs the treatment of intellectual property of the parties prior to the collaboration and the intellectual property developed during the collaboration.

The Collaboration Agreement had a term of three years that was set to expire in March 2020.

In March 2020, the Collaboration Agreement was extended for an additional term of three years.

Also, through the Company’s relationship with Weichai, it has access to Weichai’s ‘New Energy’ product portfolio and is exploring product diversification opportunities in the areas of battery storage and electrification.

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Financial Statements and Supplemental Information , for additional information.

Weichai is currently the Company’s majority stockholder, holding over 51% of the Company’s outstanding Common Stock, as of March 28, 2022 .

Weichai is currently the Company’s majority stockholder, holding over 51% of the Company’s outstanding Common Stock, as of December 31, 2022 .

Expand global business

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The Company sees long-term opportunity in continuing to grow its business worldwide with further R&D investment including new-product development and offerings.

In January 2022, PSI and Baudouin, a subsidiary of Weichai, entered into an international distribution and sales agreement which enables Baudouin to bring PSI’s power systems line of products into the European, Middle Eastern, and African markets.

In January 2022, PSI and Société Internationale des Moteurs Baudouin (“Baudouin”), a subsidiary of Weichai, entered into an international distribution and sales agreement which enables Baudouin to bring PSI’s power systems line of products into the European, Middle Eastern, and African markets, which resulted in over $2.0 million of sales.

In addition to sales, Baudouin will manage service, support, warranty claims, and technical requests.

PSI is optimistic that this agreement will offer enhanced global growth opportunities, particularly in Europe.

The Company believes that this agreement will continue to offer enhanced global growth opportunities, particularly in Europe.

Sales and Marketing

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The Company’s customers primarily include global OEMs and direct end-users across a wide range of applications that demand high product quality, best-in-class engineering support and on-time delivery.

Within several applications for which the Company provides solutions, it maintains supplier relationships with two or more customers, which are often among the largest in that category.

The Company’s largest customers, based upon its consolidated net sales in 2021, included the following subsidiaries/affiliates of Daimler AG:

Freightliner Custom Chassis Corporation, Thomas Built Buses and FUSO Company (collectively, “Freightliner”) and Hyster-Yale Materials Handling Group.

Freightliner and Hyster-Yale Materials Handling Group represented 21% and 17% of 2021 consolidated net sales, respectively.

The largest customers change from time to time as a result of various factors, including prevailing market conditions, customers’ strategies and inventory of the Company’s power systems.

In each of the Company’s end markets there are a variety of competitors, including engine manufacturers, independent suppliers and distributors of engines, fuel systems and component providers, manufacturers of power generation equipment, engine packagers and integrators, and the in-house operations of certain OEMs, some of which have longer operating histories, strong brand recognition and significantly greater financial and marketing resources.

Within several applications for which the Company provides solutions, it maintains supplier relationships with customers, which are often among the largest in that category.

The Company’s largest customer, represented 19% of consolidated net sales in 2022.

The largest customer changes from time to time as a result of various factors, including prevailing market conditions, customers’ strategies and inventory of the Company’s power systems.

Each of the Company’s end markets have a variety of competitors, including engine manufacturers, independent suppliers and distributors of engines, fuel systems and component providers, manufacturers of power generation equipment, engine packagers and integrators, and the in-house operations of certain OEMs, some of which have longer operating histories, strong brand recognition and significantly greater financial and marketing resources.

Notwithstanding significant competition, the Company believes that the following factors provide it with a differentiated value proposition that allows the Company to compete effectively:

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Through this process, customers are able to streamline their supply base by consolidating procurement and assembly efforts down to a single part number product supplied by the Company.

The Company delivers this assembly to its customer’s production line ready to install into the customers’ product.

The Company is party to a supply agreement with Doosan, under which it purchases and distributes, on an exclusive basis, specified Doosan engines within a territory consisting of the United States, Canada and Mexico.

The Company delivers this assembly to its customers production lines ready to install into the customers’ product.

The Company is party to a supply agreement with Doosan, under which it purchases and distributes specified Doosan engines within a territory consisting of the United States, Canada and Mexico.

On October 1, 2019, the supply agreement with Doosan was amended and extended to December 31, 2023, after which the agreement will automatically be extended for additional one-year terms unless a notice of termination is provided by either party six months prior to the scheduled expiration.

The addendum also includes minimum product purchase commitments for the period 2019 through 2023, subject to reductions based on market declines in oil prices and defined prescribed payments to Doosan triggered by shortfalls in purchases made by the Company during each annual calendar period.

As of December 31, 2021, the Company recorded a $1.6 million liability related to a purchasing shortfall of the 2021 volume commitment.

Commitments and Contingencies in Part II.

Financial Statement and Supplemental Information for further discussion.

The addendum also included minimum product purchase commitments for the period 2019 through 2023, subject to reductions based on market declines in oil prices and defined prescribed payments to Doosan triggered by shortfalls in purchases made by the Company during each annual calendar period.

On July 1, 2022, the supply agreement was amended to remove exclusivity and the minimum product purchase commitments.

The Company had an exclusive supply agreement with GM through December 31, 2019 to purchase and distribute GM 6.0L engines to on-highway customers.

With the GM announcement that it will discontinue its production of the GM 6.0L engine, the Company conducted last-time buys of this engine during 2019 through 2021 (including certain engines where prepayment was provided), to ensure adequate supply to certain transportation customers .

At December 31, 2021, the Company had fully exhausted its stock of engines where prepayment was provided and holds a small quantity of other GM 6.0L engines which it expects to deliver to customers throughout 2022.

At December 31, 2022, the Company holds a small quantity of other GM 6.0L engines which it expects to deliver to customers throughout 2023.

The Company does not have a supply agreement with GM for its successor product to the GM 6.0L engine;

however, it will source the 6.0L through a GM designated third party manufacturer.

The Company is also party to a supply agreement with SAME through December 31, 2022 for the exclusive purchase and distribution of engines around the world, with the exception of China (including Hong Kong, Macao and Taiwan), within the forklift and marine markets.

The agreement, which automatically extends for an additional one-year term on an annual basis, unless either party provides notice of termination at least 180 days before the expiration date, includes minimum purchase commitments.

The Company was also party to a supply agreement with SAME through December 31, 2022, for the exclusive purchase and distribution of engines around the world, with the exception of China (including Hong Kong, Macao and Taiwan), within the forklift and marine markets.

The agreement included minimum purchase commitments which had no financial impact or monetary penalties for the year ended December 31, 2022 .

Product Support

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The Company monitors and manages attrition.

It approves, through its human resources department, the replacement of key positions that it believes are critical to sustaining improved business performance and analyzes departure data to continually improve upon the experience of employees.

It approves, through its human

resources department, the replacement of key positions that it believes are critical to sustaining improved business performance and analyzes departure data to continually improve upon the experience of employees.

Turnover for salaried employees in 2022 was approximately 23.0%.

The Company’s talent management and succession planning process includes the identification of key

positions based on current and future business strategies, the identification of potential successors, and a plan for talent development.

The Company’s talent management and succession planning process includes the identification of key positions based on current and future business strategies, the identification of potential successors, and a plan for talent development.

The Company focuses on attracting and retaining the best employees by providing market competitive pay and benefits.

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Health and safety are also a key priority, as the Company is committed to removing conditions that cause personal injury or occupational illness.

Employees participate in trainings sessions focused on these topics and are encouraged to promote behaviors that protect others from risk of injury.

Employees participate in training sessions focused on these topics and are encouraged to promote behaviors that protect others from risk of injury.

The Company sets annual targets for its Total Recordable Incident Rate (“TRIR”) and Days Away, Restricted or Transferred (“DART”) and regularly reviews these metrics.

For 2022, the Company achieved an overall TRIR of 4.8, meaning that for every 100 employees, 0.48 employees incurred an injury that resulted in recordable medical treatment.

The DART was 3.7 in 2021, meaning that for every 100 employees, 0.37 individuals experienced an incident that resulted in days away from work.

In response to the COVID-19 pandemic and to support the Company’s customers and communities, the Company made keeping employees safe a priority.

Many of the Company’s employees have the ability to work from home and continue to have that option since the outbreak of the COVID-19 pandemic.

Recently, the Company has made efforts to transition employees back into the office environment.

However, the Company continues to focus resources and investments on its R&D and production facilities including the following steps to help protect the health and safety of e mployees:

• visitor/vendor questionnaires for all non-employees entering the Company’s facilities;

• mandatory personal protective equipment provided for employees;

• masks required inside open plants and facilities.

The DART was 4.3 i n 2022, meaning that for every 100 employees, 0.43 individuals experienced an incident that resulted in days away from work or restricted work tasks.

Environmental Matters

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The Company is committed to producing high quality products that provide reduced emissions and to operating its facilities in a manner that mitigates their impact on the environment.

For the full year ended 2021, just over 50% of the engines sold run on either propane or natural gas.

For the full year ended 2022, approximately 70% of the engines sold run on either propane or natural gas.

Also, the Company has taken the following steps to enhance its sustainability:

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These regulations generally serve to restrict exhaust emissions, with a primary focus on oxides of nitrogen, hydrocarbons and carbon monoxide.

Exhaust emission regulations for engines used in off-highway industrial and power generation equipment vary based upon the use of the equipment into which the engine is incorporated (such as stationary power generation or mobile off-highway industrial equipment) and the type of fuel used to

drive the power system.

Similarly, on-road regulations from the EPA and CARB focus on the same exhaust constituents as well as sophisticated requirements to meet on-board diagnostic (“OBD”) system regulations.

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In order to address the impact of the transition of its emission regulation requirements in 2020 and 2021, the Company licensed its technology to a third-party small manufacturer to produce and certify the 6.0L gasoline engine and utilized averaging, banking, and trading compliance provisions for the sale of its 8.8L gasoline engine.

The Company ended the program to outsource and sell the certified 6.0L engines effective December 31, 2021.

The Company is utilizing averaging, banking, and trading compliance provisions for compliance with the EPA Phase 2 GHG emission regulations.

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All of the Company’s emission-certified power systems meet existing exhaust emission standards of the EPA and CARB.

Failure to comply with these standards could result in adverse effects on the Company’s future financial results.

Failure to comply with these standards could result in materially adverse effects on the Company’s future financial results.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law.

The IRA contains several revisions to the Internal Revenue Code, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022.

While these tax law changes have no immediate effect and are not expected to have a material adverse effect on our results of operations going forward, we will continue to evaluate their impact as further information becomes available.

The IRA also includes incentives and other provisions for companies to address climate change, increase investment in renewable energy, and enhance energy efficiency.

The Company increased governance procedures with its Board of Directors (the “Board”) to monitor and identify opportunities and implications presented as a result of the IRA.

Information about the Company’s Executive Officers

The following selected information for each of the Company’s current executive officers was prepared as of March 29, 2022.

The following selected information for each of the Company’s current executive officers was prepared as of April 10, 2023 .

Executive Officer Since

Present Position with the Company

Lance Arnett 51 2019 Chief Executive Officer

Klein 48 2018 Chief Financial Officer

(Dino) Xykis 63 2020 Chief Technical Officer

Lance Arnett was appointed as the Company’s Chief Executive Officer effective February 15, 2021.

Arnett previously served as the Company’s Chief Commercial Officer since November 18, 2019.

Prior to joining the Company, from January 2009 to November 2019, he worked at Cummins Inc., a publicly traded company on the NYSE that designs, manufactures, distributes and services a broad portfolio of power solutions.

During his tenure, he served in various capacities for Cummins Central Region in Minnesota, most recently serving as Director and Chief of Staff of their North American OEM Performance Cell.

In this capacity, he oversaw direct strategy for their North American business including sales, engineering, assembly and upfit, pricing, marketing, and customer support.

His previous roles at Cummins Central Region include serving as Interim President, Vice President of OEM business, Vice President of OEM and Customer Care and Executive Director of Operational Effectiveness.

Prior thereto, from 2006 to 2009, he worked as Business Development Manager for PreVisor, Inc.

and, from 2001 to 2006, he served as Director, Franchise Sales and Development at Mighty Distributing System of America (Mighty Auto Parts).

Earlier in his career, he served in management and sales roles within the staffing industry.

Klein has served as the Chief Financial Officer since January 2021 and as the Principal Accounting Officer since May 14, 2018.

Klein previously served as the Company’s Interim Chief Financial Officer from July 20, 2020 to January 19, 2021 and the Company’s Corporate Controller from May 14, 2018 to July 20, 2020.

Prior to joining the Company, he served as Assistant Corporate Controller at Littelfuse, Inc., a publicly traded company on the NASDAQ, with customers in the electronics, automotive and industrial markets with products that include fuses, semiconductors, polymers, ceramics, relays and sensors.

Prior to that role, from 2008 to 2017, Mr.

Klein served in various positions of increasing responsibility within finance and accounting, including most recently as Assistant Corporate Controller, at Navistar International Corporation, a NYSE-listed global manufacturer of commercial and military trucks, school buses, diesel engines and provider of service parts for trucks and diesel engines.

Prior to Navistar, he worked for Hewitt Associates as Manager of External Reporting and at Ernst & Young LLP as a senior manager of assurance and advisory services.

(Dino) Xykis was appointed as the Chief Technical Officer on March 15, 2021.

Xykis is responsible for the oversight of the Company’s advanced product development, engineering design and analysis, on-highway engineering, applied engineering, emissions and certification, Waterford, Michigan engineering operations, program management and product strategic planning.

Since joining the Company in 2010 and until his appointment as Chief Technical Officer in March 2021, Mr.

(Dino) Xykis 63 2020 Interim Chief Executive Officer, Chief Technical Officer

Xun (Kenneth) Li 53 2022 Chief Financial Officer

Sidong Shao 42 2022 Executive Vice President

(Dino) Xykis was appointed as the Interim Chief Executive Officer on June 1, 2022.

Xykis was also appointed as the Company’s Chief Technical Officer on March 15, 2021.

He is responsible for the oversight of the Company’s advanced product development, engineering design and analysis, on-highway engineering, applied engineering, emissions and certification, Waterford, Michigan engineering operations, program management and product strategic planning.

Since joining the Company

in 2010 and until his appointment as Chief Technical Officer in March 2021, Mr.

Xykis served as Vice President of Engineering for the Company.

He has more than 30 years of professional experience in multi-disciplined engineering areas including senior management and executive positions at various companies including Cummins Inc., an NYSE-listed company, and Generac Power Systems, an NYSE-listed company.

He has more than 30 years of professional experience in multi-disciplined engineering areas including senior management and executive positions at various companies including Cummins Inc., a publicly traded company on the NYSE, and Generac Power Systems, a publicly traded company on the NYSE.

Xykis also served as Adjunct Professor of Mechanical Engineering and Mechanics at the Milwaukee School of Engineering and previously served on the audit and compensation committees of the Board of Directors of Image Sensing Systems, a publicly traded company on NASDAQ, from 1996 to 2001.

Xykis has also served on the advisory board of Civil, Environmental, and Geo-Engineering, College of Science and Engineering, University of Minnesota for the past eight years.

Xykis holds a Bachelor’s degree in Structural Engineering, a Master’s degree in Vibration/Dynamics, and a PhD.

in Structural/Applied Mechanics from the University of Minnesota, Minneapolis.

Xun (Kenneth) Li was appointed as the Chief Financial Officer on August 26, 2022.

Li is an accomplished executive who has more than 20 years of professional experience in the areas of finance, accounting, financial planning & analysis, internal controls and strategy, among others.

Most recently, Mr.

Li served as Chief Financial Officer for ND Paper, a leading pulp, packaging and paper company, from 2020 to August 2022, where he was a member of the executive leadership management team with primary responsibility for finance, accounting, tax, auditing, treasury, risk management, internal audit, and strategic planning, among other areas, and served as a strategic advisor to the Chief Executive Officer.

Prior to this role, Mr.

Li was with Caterpillar Inc., a publicly traded company on the NYSE, from 2008 through 2020, where he served in various financial leadership positions, the most recent of which was chief financial officer of the global mining machine product group from 2013 to 2020.

Prior to Caterpillar, Mr.

Li was with Ford Motor Company, a publicly traded company on the NYSE, where he held finance leadership roles of increasing responsibility, from 2003 to 2008.

Li earned the Masters in Business Administration degree with high distinction and a Master of Science (M.S.) degree in Accounting, both from the University of Michigan.

He also holds an M.S.

in Mechanical Engineering from the University of Oklahoma and a Bachelors of Science degree in Mechanical Engineering from Shanghai JiaoTong University.

Li is also a certified public accountant in the state of Illinois.

Sidong Shao was appointed as the Executive Vice President on September 26, 2022.

He is responsible for the oversight of the Company’s product management, purchasing and supply chain.

Prior to being appointed to his current positions Mr.

Shao served on the Company’s Board from December 2020 to September 2022.

Shao served on the Board as a Weichai designee and was also a member of the Executive Committee.

Shao previously served as the President and Chairman of the Board of Directors of Weichai from 2019 to September 2022.

From May 2012 to April 2018, Mr.

Shao was President of Weichai Westport Inc., a joint venture between Weichai Power and Westport Fuel Systems Inc., a publicly traded company on the NASDAQ and Toronto Stock Exchanges, that manufactures and sells alternative-fuel engines for automobiles, heavy-duty trucks, power generation and shipping applications.

Shao has a Bachelor’s degree in Industrial Energy and Power Engineering from Shandong University.

Shao also holds a Master’s degree in Power Engineering from Tianjin University and a Masters of Business Administration degree from Missouri State University.

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-K

Item 1. Business