What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-02 compared with 2025-03-24 · 256 added, 256 removed, 854 unchanged (37% of the section changed)

3 unchanged sentences

Consolidated Financial Statements of Power Solutions International, Inc.

Report of Independent Registered Public Accounting Firm ( BDO USA, P.C.

Reports of Independent Registered Public Accounting Firm ( BDO USA, P.C.

, Chicago, IL , PCAOB ID# 243 )

10 unchanged sentences

We have audited the accompanying consolidated balance sheets of Power Solutions International, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, stockholders’ equity (deficit), and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

(the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company will not have sufficient cash and cash equivalents to repay amounts owed under its existing debt arrangements as they become due in 2025 without additional financing and uncertainties exist about the Company’s ability to refinance, amend or extend these debt arrangements.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 2, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

1 unchanged sentence

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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Previous estimates are adjusted as actual warranty claims data becomes available.

We identified the estimation of certain accrued product warranties as a critical audit matter.

The principal consideration for this determination was the significant judgment used by management when determining the accrued product warranty estimates.

Auditing management’s estimates and assumptions to determine certain accrued product warranties involved especially

challenging auditor judgment due to the significant audit effort in performing procedures related to the significant assumptions, specifically the applicability of historical claims experience.

We identified the estimation of certain accrued product warranties as a critical audit matter, as auditing such accrued product warranties was especially challenging due to the nature and extent of audit effort required to address this matter.

The primary procedures we performed to address this critical audit matter included:

Evaluating management’s assumptions to estimate certain future warranty claims by comparing the current product warranty claims estimates to the prior year estimates and investigating significant differences to evaluate the applicability of the historical claims experience.

Testing the completeness and accuracy of certain underlying historical warranty claims information used to estimate future warranty claims.

Testing the design and operating effectiveness of certain relevant internal controls related to the Company’s estimation of accrued product warranties.

Reconciling certain underlying historical warranty claims information to the calculation of estimated future warranty claims.

Testing the completeness and accuracy of certain underlying historical warranty claims information used in management’s estimation of accrued product warranties.

Testing the mathematical accuracy of management’s calculation of certain accrued product warranties.

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March 2, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors

Power Solutions International, Inc.

Wood Dale, Illinois

Opinion on Internal Control over Financial Reporting

We have audited Power Solutions International, Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years then ended, and the related notes and our report dated March 2, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, P.C.

Chicago, Illinois

March 2, 2026

POWER SOLUTIONS INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

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Goodwill 29,835 29,835

Deferred tax assets 13,322 —

Customs-related deposits 12,893 2,503

Other noncurrent assets 614 374

TOTAL ASSETS $ 424,745 $ 328,182

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

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Current maturities of long-term debt 28 52

Revolving line of credit 95,000 50,000

Revolving line of credit, current — 95,000

Finance lease liability, current 355 78

Operating lease liability, current 6,346 4,503

Other short-term financing (from related parties $ 25,000 and $ 94,820 as of December 31, 2024 and 2023, respectively)

25,000 94,820

Other accrued liabilities (from related parties $ 807 and $ 1,833 as of December 31, 2024 and 2023, respectively)

Other short-term financing (to related parties $ 25,000 as of December 31, 2024)

Other accrued liabilities (to related parties $ 60 and $ 807 as of December 31, 2025 and 2024, respectively)

37,353 44,726

Total current liabilities 92,278 227,567

Deferred income taxes 1,568 1,478

Deferred tax liabilities — 1,568

Long-term debt, net of current maturities 10 38

Revolving line of credit, long-term 95,000 —

Finance lease liability, long-term 1,224 16

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Commitments and Contingencies (Note 11)

STOCKHOLDERS’ EQUITY (DEFICIT)

STOCKHOLDERS’ EQUITY

Common stock – $ 0.001 par value;

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Additional paid-in capital 157,602 157,561

Accumulated deficit ( 91,511 ) ( 160,790 )

Retained earnings (accumulated deficit) 22,476 ( 91,511 )

Treasury stock, at cost, 76 and 117 shares at December 31, 2025 and 2024, respectively

( 1,492 ) ( 823 )

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) 65,250 ( 3,917 )

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 328,182 $ 284,303

TOTAL STOCKHOLDERS’ EQUITY 178,609 65,250

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 424,745 $ 328,182

See Notes to Consolidated Financial Statements

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(in thousands, except per share amounts) For the Year Ended December 31,

(from related parties $ 1,766 and $ 2,449 for the year ended December 31, 2024 and 2023, respectively)

(to related parties $ 1,266 and $ 1,766 for the year ended December 31, 2025 and 2024, respectively)

$ 722,405 $ 475,967

Cost of sales

(from related parties $ 1,304 and $ 1,790 for the year ended December 31, 2024 and 2023, respectively)

(derived from related party net sales $ 863 and $ 1,304 for the year ended December 31, 2025 and 2024, respectively)

537,506 335,430

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Operating income 109,714 81,644

Other expense (income), net

Interest expense (from related parties $ 634 and $ 6,998 for the year ended December 31, 2025 and 2024, respectively)

11,443 17,069

Other expense (income) ( 352 ) —

Total other expense, net 6,350 11,443

Income before income taxes 103,364 70,201

Income tax expense 922 900

Income tax (benefit) expense ( 10,623 ) 922

Net income $ 113,987 $ 69,279

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POWER SOLUTIONS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands) Common Stock Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Stockholders’ Equity (Deficit)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands) Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Treasury Stock Total Stockholders’ Equity

Balance at December 31, 2023 $ 23 $ 157,770 $ ( 160,790 ) $ ( 920 ) $ ( 3,917 )

Net income — — 69,279 — 69,279

Stock Appreciation Rights (“SAR”) issued — ( 187 ) — 187 —

Stock-based compensation expense — 89 — — 89

Common stock issued for stock-based awards, net — — — ( 2 ) ( 2 )

Tax benefit from exercise of stock based compensation — — — ( 201 ) ( 201 )

Restricted Stock Awards — ( 111 ) — 111 —

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Stock-based compensation expense — 427 — — 427

Tax benefit from exercise of stock based compensation — — — ( 201 ) ( 201 )

Repurchases to settle tax withholding obligations for stock-based compensation awards — — — ( 1,055 ) ( 1,055 )

Restricted Stock Awards — ( 112 ) — 112 —

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Deferred income taxes ( 14,890 ) 90

(Credit) Provision for losses in accounts receivable ( 4,086 ) 1,668

(Credit) for losses in accounts receivable ( 922 ) ( 4,086 )

Increase in allowance for inventory obsolescence, net 118 2,405

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Payments of deferred financing costs ( 1,157 ) ( 709 )

Other financing activities, net — ( 2 )

Net cash used in financing activities ( 27,694 ) ( 25,934 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 31,897 ( 1,306 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 13,543 ) 31,897

Cash, cash equivalents, and restricted cash at beginning of the year 58,491 26,594

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

(HK2338, SZ000338) (herein collectively referred to as “Weichai”), owns a majority of the outstanding shares of the Company’s Common Stock.

As a result, Weichai is able to exercise control over matters requiring stockholders’ approval, including the election of directors, amendment of the Company’s Certificate of Incorporation (the “Charter”) and approval of significant corporate transactions.

This control could have the effect of delaying or preventing a change of control of the Company or changes in management and will make the approval of certain transactions impractical without the support of Weichai.

Weichai has entered into an Investor Rights Agreement (the “Rights Agreement”).

(HK2338, SZ000338) (herein collectively referred to as “Weichai”), owns approximately 46.0 % of the outstanding shares of the Company’s Common Stock as of December 31, 2025 .

Weichai has entered into an Investor Rights Agreement (the “Rights Agreement”) with the Company.

The Rights Agreement provides Weichai with representation on the Company’s Board of Directors (the “Board”) and management representation rights.

Weichai currently has four representatives on the Board, which constitutes the majority of the directors serving on the Board.

In addition, the Company and Weichai have entered into a Shareholders Agreement with the Company’s founders (the “Founders”), pursuant to which the Founders have agreed to vote in favor of Weichai’s designees to the Board and for certain other matters.

The Founders currently own less than 10% of the Company’s Common Stock as of December 31, 2025.

According to the Rights Agreement, during any period when the Company is a “controlled company” within the meaning of the Nasdaq Listing Rules, it will take such measures as to avail itself of the “controlled company” exemptions available under Rule 5615 of the Nasdaq Listing Rules from Rules 5605(b), (d) and (e) to the extent applicable.

Going Concern Considerations

For the year ended December 31, 2024 , the Company reported net income of $ 69.3 million and generated $ 62.4 million in cash flow from operating activities.

In August 2024, the Company refinanced its debt through a new Revolving Credit Agreement with three banks.

Additionally, the Company entered into a new Shareholder’s Loan Agreement (the “SLA”) with Weichai to replace all existing Shareholder Loan Agreements.

The new Revolving Credit Agreement and the SLA mature on August 30, 2025 and August 31, 2025, respectively, and have borrowing capacity of $ 120.0 million and $ 105.0 million, respectively.

As of December 31, 2024, t he Company held $ 55.3 million in cash and cash equivalents and its short-term debt obligations under the new Revolving Credit Agreement and SLA totaled $ 95.0 million and $ 25.0 million, respectively.

While the Company has achieved profitability and generated positive cash flows from operating activities in 2024, uncertainties exist about the Company’s ability to refinance, amend or extend its outstanding indebtedness .

Debt , for further information regarding the terms and conditions of the Company’s debt agreements.

Due to these uncertainties, the Company’s management has concluded that, substantial doubt exists as to its ability to continue as a going concern within one year after the date that these financial statements are issued.

The Company’s plans to alleviate the substantial doubt about its ability to continue as a going concern may not be successful, and it may be forced to limit its business activities or be unable to continue as a going concern, which would have a material adverse effect on its results of operations and financial condition.

The consolidated financial statements included herein have been prepared assuming that the Company will continue as a going concern and contemplating the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

The Company’s ability to continue as a going concern is dependent on extending and amending, refinancing or repaying the indebtedness outstanding under the Company’s existing debt arrangements.

Without additional financing, the Company anticipates that it will not have sufficient cash and cash equivalents to repay amounts owed under its existing debt arrangements as they become due.

In order to provide the Company with a more permanent source of liquidity, management plans to seek an extension and amendment and/or replacement of its existing debt agreements or seek additional liquidity from its current or other lenders before the maturity dates in 2025.

There can be no assurance that the Company’s management will be able to successfully complete an extension and amendment of its existing debt agreements or obtain new financing on acceptable terms, when required or if at all.

These consolidated financial statements do not include any adjustments that might result from the outcome of the Company’s efforts to address these issues.

During 2025, the Company reported net income of $ 114.0 million and cash provided by operations of $ 24.1 million.

On July 30, 2025, the Company amended its Uncommitted Revolving Credit Agreement (the “Revolving Credit Agreement”), which extended the maturity date from August 30, 2025 to July 30, 2027 (See Note 6.

Debt ) and increased the borrowing capacity to $ 135.0 million.

As the Company has achieved profitability, is generating positive cash flows from operating activities, and has amended the Revolving Credit Agreement, the Company has concluded that its existing cash and cash equivalents and cash from operations will be sufficient for the Company for at least twelve months from the issuance of these consolidated financial statements.

Basis of Presentation and Consolidation

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For the Year Ended December 31,

Customer A ** 14 %

Customer B 20 % 11 %

Customer C 10 % 11 %

Customer E 10 % **

Customer F 13 % **

The following table presents customers individually accounting for more than 10% of the Company’s trade accounts receivable:

As of December 31,

Customer A ** 12 %

Customer B 14 % **

Customer C 10 % **

Customer D ** 15 %

Customer E 11 % **

Customer G 11 % **

The following table presents suppliers individually accounting for more than 10% of the Company’s purchases:

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Supplier A 21 % 16 %

Supplier B 16 % 14 %

** Less than 10% of the total

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GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Significant estimates and assumptions include the valuation of allowances for uncollectible receivables, inventory reserves, warranty reserves, stock-based compensation, evaluation of goodwill, other intangibles, property, plant and equipment for

impairment, income tax valuation allowances and determination of useful lives of long-lived assets.

Actual results could materially differ from those estimates.

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It is the Company’s policy to review inventories on a continuing basis for obsolete, excess and slow-moving items and to record valuation adjustments for such items in order to eliminate non-recoverable costs from inventory.

Valuation adjustments are recorded in an inventory reserve account and reduce

the cost basis of the inventory in the period in which the reduced valuation is determined.

Valuation adjustments are recorded in an inventory reserve account and reduce the cost basis of the inventory in the period in which the reduced valuation is determined.

Inventory reserves are established based on quantities on hand, usage and sales history, customer orders, projected demand and utilization within a current or future power system.

16 unchanged sentences

Balance at end of period $ 8,253 $ 8,135

As of December 31, 2024, the Company’s inventory include d $ 0.8 million of raw materials provided by its customers for installation in the fulfillment of its performance obligations to these customers and recorded an associated contract liability.

As of December 31, 2025 and 2024, the Company’s inventory include d $ 0.2 million and $ 0.8 million, respectively, of raw materials provided by its customers for installation in the fulfillment of its performance obligations to these customers and recorded an associated contract liability.

Revenue for further information regarding contract assets and contract liabilities.

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If, however, the reporting unit’s estimated fair value is less than its carrying amount, the Company records an impairment for the difference between the estimated fair value and the carrying value.

The Company calculates its estimated fair value using the income and market approaches when feasible, or an asset approach when neither the income nor the market approach has sufficient data.

Under the quantitative approach, the Company calculates its estimated fair value using the income and market approaches when feasible, or an asset approach when neither the income nor the market approach has sufficient data.

For the income approach, a discounted cash flow method, the Company uses internally developed discounted cash flow models that include the following assumptions, among others:

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The asset approach estimates the selling price the unit could achiev e under assumed market conditions.

The Company used the income and market approaches when determining its estimated fair value as of October 1, 2024 a nd 2023 .

During the years ended December 31, 2024 and 2023, the Company performed a quantitative assessment and determined that the estimated fair value of the reporting unit exceeded the carrying value;

as such, no impairment charges were recognized.

The Company performed its annual goodwill impairment assessment as of October 1, 2025, utilizing the qualitative approach permitted under applicable accounting guidance.

Based on the totality of information considered, and after weighing both positive and negative qualitative factors, management concluded that it was not more likely than not that the fair value of its reporting unit was below its carrying amount.

As a result, the Company determined that a quantitative goodwill impairment test was not required, and no impairment charge was recognized for the period ended December 31, 2025.

The Company performed its annual goodwill impairment assessment as of October 1, 2024, utilizing the quantitative approach to determine the estimated fair value of its reporting unit and no impairment charge was recognized for the period ended December 31, 2024 .

Other Accrued Liabilities

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Non-interest bearing note payable 740 693

Customs accrual 1,248 1,162

Taxes payable 257 200

Other 2,685 4,645

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2 The Company has an incentive compensation plan, which authorizes the granting of a variety of different types of awards including, but not limited to, non-qualified stock options, incentive stock options, Stock Appreciation Rights (“SARs”), Restricted Stock Awards (“RSAs”) , deferred stock and performance units to its executive officers, employees, consultants and Directors.

T he SAR awards granted for the year ended December 31, 2024 and December 31, 2023 were all liability classified awards and remained outstanding.

T he SAR awards granted for the year ended December 31, 2025 and 2024 were all liability classified awards and remained outstanding.

Stock-Based Compensation for additional information on the SARs and RSAs.

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Warranties for certified emission products are mandated by the U.S.

Environmental Protection Agency (the “EPA”) and / or the California Air Resources Board (the “CARB”) and are longer than the Company’s standard warranty on certain emission-related products.

Environmental Protection Agency (the “EPA”) and / or CARB and are longer than the Company’s standard warranty on certain emission-related products.

The Company’s products also carry limited warranties from suppliers.

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Warranty costs and recoveries are included in Cost of sales in the Consolidated Statements of Income.

As of December 31, 2024 and 2023, reimbursed warranty costs due from a significant supplier included in accounts receivable are approximately $ 0.2 million and $ 1.3 million , respectively.

As of both December 31, 2025 and 2024 , reimbursed warranty costs due from a significant supplier included in accounts receivable are approximately $ 0.2 million .

Accrued product warranty activities included in Other noncurrent liabilities on the Consolidated Balance Sheet are presented below:

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Recently Issued Accounting Pronouncements – Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) .

The standard replaced the incurred loss impairment methodology under current U.S.

GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments.

The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.

The new standard was effective for non-public companies, and public business entities that meet the definition of a smaller reporting company as defined by the SEC, for interim and annual periods beginning after December 15, 2022.

The Company adopted this guidance effective January 1, 2023.

The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures – Segment Reporting (Topic 280) .

The amendments to this standard require public entities to disclose more detailed information about their reportable segments’ significant expenses on an interim and annual basis.

The amendments to this standard do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

The amendments to this standard apply to all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this guidance for the year ending December 31, 2024 and subsequent interim periods.

Segment Reporting for the new disclosures required by the standard.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures - Income Taxes (Topic 740) .

The amendments to this standard enhances the transparency and decision usefulness of income tax disclosures, primarily related to rate reconciliation and income taxes paid information as well as effectiveness of overall income tax disclosures.

The new standard is effective for non-public companies, and public business entities that meet the definition of a smaller reporting company as defined by the SEC, for annual periods beginning after December 15, 2024, although early adoption is permitted.

The Company currently plans to adopt this guidance effective January 1, 2025.

The adoption of the standard is not expected to have a material impact on the Company’s consolidated financial statements.

The new standard is effective for public entities for annual periods beginning after December 15, 2024 .

The Company adopted this guidance retrospectively for the year ended December 31, 2025.

Refer to Note 12.

Income Taxes for the related disclosures, which include updates to the specific categories presented in the tax rate reconciliation, additional information for reconciling items that meet the applicable quantitative threshold, and enhanced disclosures regarding income taxes paid on an annual basis.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income:

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While we anticipate that the adoption of this standard will require additional disclosures, the Company is currently assessing the impact of the amendment to this standard on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses:

Measurement of Credit Losses for Accounts Receivable and Contract Assets (Topic 326) .

The update permits entities to elect a practical expedient for estimating expected credit losses on current trade receivables and current contract assets by assuming that conditions existing at the balance sheet date will remain unchanged over the life of those assets.

The updated standard is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption perm itted.

The Company is currently assessing the impact of the amendment to this standard on its consolidated financial statements.

Revenue Recognition

64 unchanged sentences

Europe 3,373 7,090

Other 53 5,185

Total $ 722,405 $ 475,967

15 unchanged sentences

( 1,699 ) ( 1,877 ) ( 2,401 )

Net contract assets (liabilities) $ 9,401 $ 10,412 $ ( 1,835 )

Net contract assets $ 10,780 $ 9,401 $ 10,412

During the years ended December 31, 2025 and 2024, the Company recognized $ 9.2 million and $ 1.7 million of revenue upon satisfaction of performance obligations related to amounts that were included in the net contract liabilities balance as of December 31, 2024 and 2023, respectively.

D uring the three months ended December 31, 2024 and 2023, the Company recognized $ 0.2 million and $ 0.3 million, respectively, of revenue upon satisfaction of performance obligations related to amounts that were included in the net contract liabilities balan ce as of September 30, 2024 and 2023 , respectively.

Remaining Performance Obligations

1 unchanged sentence

For performance obligations that extend beyond one year, the Company had $ 2.1 million of remaining performance obligations as of December 31, 2025 primarily related to extended warranties.

The Company expects to recognize revenue related to these remaining performance obligations of approximately $ 0.7 million in 2025, $ 0.2 million in 2026, $ 1.5 million in 2027, $ 0.2 million in 2028, and none in 2029 and beyond.

The Company expects to recognize revenue related to these remaining performance obligations of approximately $ 0.4 million in 2026, $ 1.5 million in 2027, $ 0.2 million in 2028, and none in 2029 and beyond.

Weichai Transactions

Weichai Shareholder’s Loan Agreements

The Company is party to a $ 105.0 million SLA with Weichai.

The Company entered into a $ 105.0 million Shareholder’s Loan Agreement (the “SLA”) with Weichai in August 2024.

The SLA was fully repaid during the second quarter of 2025.

See additional discussion of these debt agreements in Note 6.

Weichai Collaboration Arrangement and Other Related Party Transactions

Weichai Collaboration Arrangement and Related Party Transactions

The Company and Weichai executed a strategic collaboration agreement (the “Collaboration Agreement”) on March 20, 2017, in order to achieve their respective strategic objectives and enhance the strategic cooperation alliance to share experiences, expertise and resources .

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

On March 22, 2023, the Collaboration Agreement was extended for an additional term of three years , expiring in March 2026.

The Company has received a renewal notice from Weichai and is in the process of negotiating the renewal of the Collaboration Agreement;

however, no formal extension has been executed as of the date of this filing.

The Company evaluates whether an arrangement is a collaborative arrangement at its inception ba sed on the facts and circumstances specific to the arrangement.

1 unchanged sentence

For those collaborative arrangements where it is determined that the Company is the principal participant, costs incurred and revenue generated from third parties are recorded on a gross basis in the financial statements.

The Company purchased $ 21.5 million and $ 6.2 million of inventory from Weichai during 2024 and 2023, respectively.

Purchases of inventory from Weichai were $ 39.8 million and $ 21.5 million for the years ended December 31, 2025 and 2024, respectively.

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.

1 unchanged sentence

Refer to the Consolidated Balance Sheets and Statements of Income for detailed related party information.

Subsequent Events for information regarding the purchase agreement with Shandong Weichai Import & Export Corporation, an affiliate of Weichai (“SWIEC”), and manufacture of record (“MOR”) agreement with Weichai.

During the year ended December 31, 2025, the Company and KION North America Corporation ("KNA"), a subsidiary of Weichai, entered into an agreement to settle development costs incurred by the Company related to a 2.4L dual-fuel engine intended for use by KNA in the production of materials handling equipment.

See Note 16 for further details.

Related Party Transactions for information regarding the purchase agreement with Shandong Weichai Import & Export Corporation (“SWIEC”), an affiliate of Weichai, KION North America Corporation ("KNA"), and manufacture of record (“MOR”) agreement with Weichai.

Property, Plant and Equipment

37 unchanged sentences

Revolving Credit Agreement 1

$ 95,000 6.52 % $ — — % August 30, 2025

Credit Agreement 2

— — % 50,000 8.71 % March 21, 2025

$ — — % $ 95,000 6.52 %

Shareholder’s Loan Agreement — — % 25,000 8.49 % August 31, 2025

$25 Million Loan Agreement — — % 25,000 9.44 % May 20, 2025

$50 Million Loan Agreement — — % 50,000 9.44 % November 30, 2024

$30 Million Loan Agreement — — % 19,820 9.41 % March 31, 2025

Total short-term debt $ — $ 120,000

Long-term debt:

Revolving Credit Agreement 1

$ 95,000 6.35 % $ — — % July, 30 2027

Finance leases and other debt 1,617 ** 184 ** Various

2 unchanged sentences

Long-term debt $ 96,234 $ 54

1 Unamortized financing costs and deferred fees on the new Revolving Credit Agreement are not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheet.

Unamortized debt issuance costs, were $ 0.4 million at December 31, 2024.

2 As of December 31, 2023, unamortized financing costs and deferred fees on the Credit Agreement were not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheet.

Unamortized debt issuance costs were $ 0.2 million as of December 31, 2023.

1 Unamortized financing costs and deferred fees on the amended Revolving Credit Agreement are not presented in the above table as they are classified in Prepaid expenses and other current assets on the Consolidated Balance Sheet.

Unamortized debt issuance costs, were $ 1.0 million and $ 0.4 million at December 31, 2025 and 2024, respectively .

2 Includes the weighted average interest rate.

2 unchanged sentences

Revolving Credit Agreement and Shareholder’s Loan Agreement

On August 30, 2024, the Company closed on its new Uncommitted Revolving Credit Agreement (the “Revolving Credit Agreement”), with Standard Chartered Bank (“ Standard Chartered ”) and two other lenders.

The Revolving Credit Agreement allows the Company to borrow up to $ 120.0 million and has a maturity date of August 30, 2025 .

The Revolving Credit Agreement is subject to customary events of default and covenants, including minimum consolidated EBITDA and Consolidated Interest Coverage Ratio covenants for the third and fourth quarters of 2024 and the first and second quarters of 2025.

Borrowings under the Revolving Credit Agreement will incur interest at the applicable Secured Overnight Financing Rate (“SOFR”) plus 2.00 % per annum.

The obligations under the Revolving Credit Agreement are unconditionally guaranteed, on a joint and several basis, by certain wholly-owned, existing and subsequently acquired or formed direct and indirect subsidiaries of the Company, subject to customary exceptions.

The obligations under the Revolving Credit Agreement are secured by substantially all assets of the Company and the Company’s wholly-owned subsidiaries.

In addition, the Company paid fees of $ 0.6 million related to the Revolving Credit Agreement which are deferred and amortized over the term of the Revolving Credit Agreement .

On August 30, 2024, the Company closed on the Revolving Credit Agreement , with Standard Chartered Bank (“Standard Chartered”) and two other lenders.

The Revolving Credit Agreement allowed the Company to borrow up to $ 120.0 million and had a maturity date of August 30, 2025 .

The Revolving Credit Agreement was subject to customary events of default and covenants, including minimum consolidated EBITDA and Consolidated Interest Coverage Ratio covenants for the third and fourth quarters of 2024 and the first and second quarters of 2025.

Borrowings under the Revolving Credit Agreement incurred interest at the applicable Secured Overnight Financing Rate (“SOFR”) plus 2.00 % per annum.

The obligations under the Revolving Credit Agreement were unconditionally guaranteed, on a joint and several basis, by certain wholly-owned, existing and subsequently acquired or formed direct and indirect subsidiaries of the Company, subject to customary exceptions.

The obligations under the Revolving Credit Agreement were secured by substantially all assets of the Company and the Company’s wholly-owned subsidiaries.

In addition, the Company paid fees of $ 0.6 million related to the Revolving Credit Agreement which were deferred and amortized over the term of the Revolving Credit Agreement.

As part of the closing of the Revolving Credit Agreement , the Company made an initial draw in the amount of $ 100.0 million .

The Company utilized the amount drawn under the Revolving Credit Agreement (i) to repay the outstanding balance of approximately $ 40.0 million under the Company’s Fourth Amended and Restated Uncommitted Revolving Credit Agreement, dated March 22, 2024, by and among the Company and Standard Chartered;

and (ii) to prepay approximately $ 60.0 million under the various shareholder loan agreements between PSI and Weichai.

As of December 31, 2024, the Company had $ 95.0 million outstanding under the Revolving Credit Agreement.

See further discussion below.

In connection with the Revolving Credit Agreement , on August 30, 2024, the Company also entered into a new Shareholder’s Loan Agreement (the “SLA”) with Weichai, which allows the Company to borrow up to $ 105.0 million and expires August 31, 2025 .

Borrowings under the SLA will incur interest at the applicable SOFR, plus 4.05 % per annum.

If the interest rate for any loan is lower than Weichai’s borrowing cost, the interest rate for such loan shall be equal to Weichai’s borrowing cost plus

The borrowing requests made under the SLA are subject to Weichai’s discretionary approval.

The payment of the borrowings under the SLA is subordinated in all respects to the Revolving Credit Agreement with the exception that the Company is allowed to make a single payment of $ 10.0 million to Weichai.

The $ 60.0 million portion of the initial advance under the Revolving Credit Agreement was applied to pay all principal, interest, and other amounts outstanding under the $30 Million Loan Agreement , the $25 Million Loan Agreement , and the $50 Million Loan Agreement (each as discussed below) , except for $ 25.0 million which is the outstanding principal balance under the SLA as of December 31, 2024.

On March 22, 2024, the Company amended and restated its $ 130.0 million Third Amended and Restated Uncommitted Revolving Credit Agreement with Standard Chartered.

The Fourth Amended and Restated Uncommitted Revolving Credit Agreement (the "Credit Agreement") reduced the borrowing capacity to $ 50.0 million and extended the maturity date of loans outstanding under its previous credit facility to the earlier of March 21, 2025 or the demand of Standard Chartered.

The Credit Agreement was subject to customary events of default and covenants, including minimum consolidated EBITDA and Consolidated Interest Coverage Ratio covenants for the second and third quarters of 2024.

Borrowings under the Credit Agreement incurred interest at either the alternate base rate or the SOFR plus applicable rate of 3.45 % per annum.

In addition, the Company paid fees of $ 0.1 million related to the Credit Agreement which were deferred and amortized over the term of the Credit Agreement.

The Credit Agreement was secured by substantially all of the Company’s assets and provided Standard Chartered the right to demand payment of any and all of the outstanding borrowings and other amounts owed under the Credit Agreement at any point in time prior to the maturity date at Standard Chartered’s discretion.

The Company repaid the outstanding balance of $ 40.0 million and extinguished the Credit Agreement on August 30, 2024.

On March 22, 2024, the Company amended one of the four previous shareholder’s loan agreements with Weichai, to among other things, extend the maturity thereof.

The $30 Million Loan Agreement provided the Company with a $ 30.0 million subordinated loan at the discretion of Weichai and was amended to extend the maturity date to March 31, 2025 .

Borrowings under the $30 Million Loan Agreement bear interest at an annual rate equal to SOFR plus 4.05 % per annum.

Further, if the applicable SOFR rate was negative, the interest rate per annum should have been deemed as 4.05 % per annum.

If the interest rate for any loan was lower than Weichai’s borrowing cost, the interest rate for such loan would have been equal to Weichai’s borrowing cost plus 1.0 % .

All the amended shareholder loan agreements with Weichai were subject to customary events of default and covenants.

The Company was also previously party to a $ 130.0 million first Amended Shareholder’s Loan Agreement with Weichai, which was amended and restated in March 2023.

This first Amended Shareholder’s Loan Agreement provided the Company with a $ 130.0 million subordinated loan under which Weichai was obligated to advance funds solely for purposes of repaying outstanding borrowi ngs under Credit Agreement if the Company was unable to pay such borrowings.

This first Amended Shareholder’s Loan Agreement wa s replaced by the new SLA .

The Company was also previously party to a $50 Million Loan Agreement with Weichai, which was amended and restated in November 2023.

The $50 Million Loan Agreement provided the Company with a $ 50.0 million uncommitted facility that was subordinated to the Third Amended and Restated Uncommitted Revolving Credit Agreement and any borrowing requests made under the $50 Million Loan Agreement were subject to Weichai’s discretionary approval.

Borrowings under the $50 Million Loan Agreement incurred interest at the applicable SOFR , plus 4.65 % per annum and could have been used for general corporate purposes, except for certain legal expenditures which required additional approval from Weichai.

Further, if the applicable term SOFR was negative, the interest rate per annum should have been deemed as 4.65 % per annum.

If the interest rate for any loan was lower than Weichai’s borrowing cost, the interest rate for such loan would have been equal to Weichai’s borrowing cost plus 1.0 %.

This $50 Million Loan Agreement was replaced by the new SLA.

The Company was also previously pa rty to a $25 Million Loan Agreement with Weichai, which was amended and restated in May 2024.

The $25 Million Loan Agreement provided the Company with a $ 25.0 million subordinated loan.

Borrowings under the $25 Million Loan Agreement incurred interest at the applicable SOFR rate, plus 4.05 % per annum.

Further, if the applicable term SOFR was negative, the interest rate per annum should have been deemed as 4.05 % per annum.

If the interest rate for any loan under the $25 Million Loan Agreement was l ower than Weichai’s borrowing cost, the interest rate for such loan would have been equal to Weichai’s borrowing cost plus 1.0 %.

This $25 Million Loan Agreement was replaced by the new SLA.

As of December 31, 2024, the Company’s total outstanding debt obligations under the Revolving Credit Agreement , the SLA , and for finance leases and other debt were $ 120.2 million in the aggregate, and its cash and cash equivalents were $ 55.3 million .

The Company's total accrued interest for the Revolving Credit Agreement and the SLA was $ 1.2 million as of December 31, 2024 .

The Company’s total accrued interest for its Credit Agreement and all shareholder loans was $ 1.9 million as of December 31, 2023 .

and (ii) to prepay approximately $ 60.0 million under previous shareholder loan agreements between PSI and Weichai.

In connection with the Revolving Credit Agreement , on August 30, 2024, the Company also entered into a new SLA with Weichai, which allowed the Company to borrow up to $ 105.0 million and expired August 31, 2025 .

Borrowings under the SLA incurred interest at the applicable SOFR, plus 4.05 % per annum.

If the interest rate for any loan was lower than Weichai’s borrowing cost, the interest rate for such loan would be equal to Weichai’s borrowing cost plus 1.0 % .

The borrowing requests made under the SLA were subject to Weichai’s discretionary approval.

The payment of the borrowings under the SLA was subordinated in all respects to the Revolving Credit Agreement with the exception that the Company was allowed to make a single payment of $ 10.0 million to Weichai.

The $ 60.0 million portion of the initial advance under the Revolving Credit Agreement was applied to pay all principal, interest, and other amounts outstanding under the Shareholder’s Loan Agreements that the Company was previously party to with Weichai except for $ 25.0 million.

In January 2025, the Company amended the Revolving Credit Agreement.

After the amendment date, the Company was able to repay the outstanding balance under the

SLA in principal and interest provided there are no new borrowings under the SLA.

In June 2025, the Company made the final payment of outstanding balances and fully repaid the SLA.

On July 30, 2025, the Company closed on the Second Amendment (the “Amendment”) to the Revolving Credit Agreement with Standard Chartered and three other lenders.

The Amendment continues to enable the Company to borrow under a revolving line of credit secured by substantially all the Company’s tangible and intangible assets.

The Amendment extended the maturity to July 30, 2027, and increased the borrowing capacity of the revolving line of credit to a maximum of $ 135.0 million.

The Amendment is subject to customary events of default and quarterly covenants, including minimum consolidated EBITDA, consolidated interest coverage ratio, and consolidated leverage ratio covenants for each fiscal quarter ending hereafter.

Borrowings under the Amendment will incur interest at the applicable Secured Overnight Financing Rate (“SOFR”) plus 2.10 %.

In the event the Company’s majority shareholder, Weichai, holds less than fifty percent ( 50 %) of the common equity of the Company, the interest rate under the Amendment will increase to the applicable SOFR plus 2.60 % per annum.

The obligations under the Amendment remain unconditionally guaranteed, on a joint and several basis, by certain wholly-owned, existing and subsequently acquired or formed direct and indirect subsidiaries of the Company, subject to customary exceptions.

In addition, the Company paid fees of $ 1.2 million related to the Amendment which are deferred and amortized over the term of the Amendment .

As of December 31, 2025 , the Company had $ 95.0 million outstanding under the amended Revolving Credit Agreement.

As of December 31, 2025, the Company’s total outstanding debt obligations under the Revolving Credit Agreement and for finance leases and other debt were $ 96.6 million in the aggregate, and its cash and cash equivalents were $ 41.3 million .

The Company's total accrued interest for the Revolving Credit Agreement was $ 0.3 million and $ 1.2 million as of December 31, 2025 and 2024, respectively .

Accrued interest is included within Other Accrued Liabilities on the Consolidated Balance Sheets.

See Item 8., Note 1.

Summary of Significant Accounting Policies and Other Information for further discussion of the Company’s going concern considerations.

The below schedule of remaining maturities of long-term debt excludes finance leases (refer to Item 8., Note 8.

1 unchanged sentence

Year Ending December 31, Maturities of Long-Term Debt

Total $ 95,038

Other Non-Current Liabilities

2 unchanged sentences

The note payable includes an option for the Company to extend maturity of the note to September 2029 upon written notice before the thirty-seventh payment and, if such option is exercised, the maximum payment amount of the note increases to $ 4.8 million.

The current portion of the note of $ 0.7 million is included in other accrued liabilities in the Company’s Consolidated Balance Sheets.

(in thousands) As of December 31, 2024

As of both December 31, 2025 and 2024 t he current portion of the note of $ 0.7 million is included in other accrued liabilities in the Company’s Consolidated Balance Sheets.

(in thousands) As of December 31, 2025 As of December 31, 2024

Note payable $ 2,810 $ 3,502

6 unchanged sentences

Year ending December 31, 2028 742 8

Year ending December 31, 2028 741 9

Total note payable $ 2,810 $ 265

The Company recorded $ 0.1 million discount amortization as interest expense as of December 31, 2024 .

The Company recorded $ 0.3 million and $ 0.1 million discount amortization as interest expense as of December 31, 2025 and 2024, respectively .

Lease Policies

12 unchanged sentences

The Company has obligations under lease arrangements primarily for facilities, equipment and vehicles.

These leases have original lease periods expiring between September 2025 and July 2034.

These leases have original lease periods expiring between March 2026 and March 2036.

The following table summarizes the lease expense by category in the Consolidated Statements of Income:

26 unchanged sentences

As of December 31, 2025 and 2024, t he weighted-average remaining lease term was 8.0 years and 5.3 years for operating leases and 4.2 years and 1.2 years for finance leases, respectively.

As of December 31, 2024 and 2023, the weighted-average discount rate was 7.5 % and 7.6 % for operating leases, respectively, and 6.5 % for finance le ases as of both periods.

As of December 31, 2025 and 2024, the weighted-average discount rate was 7.1 % and 7.5 % for operating leases, respectively, and 6.9 % and 6.5 % for finance le ases, respectively.

The following table presents supplemental balance sheet information related to leases:

16 unchanged sentences

2027 10,331 434

2028 9,489 434

2029 8,652 415

2030 7,262 75

Thereafter 28,104 —

14 unchanged sentences

The Company measured its material debt obligations and notes payable at original carrying value.

The fair value of the Revolving Credit Agreement and other short-term financing approximated carrying value, as it consisted primarily of short-term variable rate loans.

The fair value of the Revolving Credit Agreement and other short-term financing approximated carrying value, as it consisted primarily of variable rate loans.

The Company measured its non-interest bearing note payable using a rate which the Company could obtain financing of similar nature from other sources at the date of the transaction.

6 unchanged sentences

Note payable 2,810 — 2,810 —

Other financing 25,000 — 25,000

(in thousands) As of December 31, 2024

1 unchanged sentence

Level 1 Level 2 Level 3

Credit Agreement $ 50,000 $ — $ 50,000 $ —

Revolving Credit Agreement $ 95,000 $ — $ 95,000 $ —

Note payable 3,502 — 3,502 —

Other financing 25,000 — 25,000 —

37 unchanged sentences

On February 5, 2025 Plaintiff filed an Unopposed Motion for Final Approval of the Class Settlement, which the Court granted on February 7, 2025.

As of both December 31, 2024 and 2023, the Company had recorded an estimated liabili ty of $ 2.4 million , recorded within Other accrued liabilities on the Consolidated Balance Sheets related to the potential settlement of this matter.

As of December 31, 2024, the Company had recorded an estimated liabili ty of $ 2.4 million , recorded within Other accrued liabilities on the Consolidated Balance Sheets related to the potential settlement of this matter.

During the first quar ter of 2025, the final settlement amount of $ 2.4 million was paid to the Plaintiff, of which $ 0.7 million was paid by the Company and $ 1.7 million was paid by the Company’s insurance carrier.

Mast Powertrain v.

16 unchanged sentences

In October 2021, the Company and Winemaster entered into a Stipulation and Advancement Order to handle all future attorney’s fees relating to his DOJ and SEC cases, to the extent not reimbursed by Travelers under the side A po licy.

As of December 31, 2023 , the Company has approximately $ 8.8 million accrued for the reimbursement to Travelers recorded within Accounts payable on the Consolidated Balance Sheet.

In June 2024, the Company reached a settlement with Travelers for $ 4.5 million, resulting in a $ 4.3 million gain that was recorded within Selling, General and Administrative expenses on the Consolidated Statements of Income.

As of December 31, 2024, the Company recorded the aforementioned settlement liability within Other noncurrent liabilities with the current portion within Other accrued liabilities on the Consolidated Balance Sheets.

As of both December 31, 2025 and 2024, the Company recorded the aforementioned settlement liability within Other noncurrent liabilities with the current portion within Other accrued liabilities on the Consolidated Balance Sheets.

Refer to Note 7.

8 unchanged sentences

Summary of Significant Accounting Policies and Other Information , the Company had restricted cash of $ 3.7 million at December 31, 2025 related to these letters of credit and cash held in escrow due to a customer agreement.

Income tax expense was as follows:

The Company’s operations are located in the United States, therefore, the tax footnote includes only federal and state domestic tax obligations.

For the years ended December 2025 and 2024, the Company recognized pretax income of $ 103.4 million and $ 70.2 million, respectively.

Income tax (benefit) expense was as follows:

(in thousands) For the Year Ended December 31,

3 unchanged sentences

Total current tax expense $ 4,267 $ 832

Deferred tax expense (benefit)

Deferred tax (benefit) expense

Federal $ ( 4,949 ) $ 229

State ( 9,941 ) ( 139 )

Total deferred tax expense 90 200

Total tax expense $ 922 $ 900

The Com pany made net cash payments for income taxes of $ 1.6 million and $ 0.6 million in 2024 and 2023, respectively.

A reconciliation between the Company’s effective tax ra te on income before income taxes and the statutory tax rate is as follows:

Total deferred tax (benefit) expense ( 14,890 ) 90

Total tax (benefit) expense $ ( 10,623 ) $ 922

A reconciliation between the Company’s effective tax ra te on income before income taxes and the statutory tax rate in accordance with ASU 2023-09 is as follows:

(in thousands) For the Year Ended December 31,

Amount Percent Amount Percent

Income tax expense at federal statutory rate $ 14,742 21.0 % $ 5,713 21.0 %

Statutory U.S.

Federal tax rate $ 21,706 21.0 % $ 14,742 21.0 %

State income tax, net of federal benefit 1

Other permanent differences

( 8,520 ) ( 8.3 ) % 469 0.7 %

Research and development tax credits

( 706 ) ( 1.0 ) % ( 601 ) ( 2.2 ) %

Other tax credits

( 552 ) ( 0.8 ) % 277 1.0 %

Tax reserve reassessment

( 119 ) ( 0.2 ) % 158 0.6 %

Change in valuation allowance

( 15,815 ) ( 22.5 ) % ( 5,366 ) ( 19.7 ) %

Return adjustment

( 637 ) ( 0.9 ) % ( 673 ) ( 2.5 ) %

Tax credits ( 839 ) ( 0.8 ) % ( 670 ) ( 1.0 ) %

Changes in valuation allowance ( 24,091 ) ( 23.3 ) % ( 13,390 ) ( 19.0 ) %

Nontaxable and nondeductible items 520 0.5 % 27 — %

Changes in unrecognized tax benefits ( 443 ) ( 0.4 ) % ( 110 ) ( 0.2 ) %

1,044 1.0 % ( 146 ) ( 0.2 ) %

Income tax expense $ 922 1.3 % $ 900 3.3 %

For the years ended December 31, 2024 and 2023, the Company recognized pretax income of $ 70.2 million and $ 27.2 million, respectively.

The Company generates R&D tax credits as a result of its R&D activities, which reduce the Company’s effective income tax rate.

In general, these credits are general business credits and may be carried forward up to 20 years to be offset against future taxable income.

The income tax expense for both 2024 and 2023 primarily related to federal and state income taxes offset by R&D credits and a reduction in the valuation allowance against deferred tax assets.

Effective Tax Rate $ ( 10,623 ) ( 10.3 ) % $ 922 1.3 %

1 The state and local jurisdictions contributing to the majority (greater than 50%) of the tax effect in this category include Wisconsin, Pennsylvania, Illinois, and Texas.

2 Other represents the aggregation of individually insignificant reconciling items that do not meet the quantitative threshold for separate presentation in accordance with ASC 740, as amended by ASU 2023-09.

Qualitative Explanation of Effective Tax Rate Drivers

The Company’s effective tax rate of ( 10.3 )% for 2025 differed significantly from the statutory U.S.

federal rate of 21.0 % primarily due to a large decrease in the valuation allowance following the Company’s removal of substantial doubt about its

ability to continue as a going concern and improved financial performance.

The reduction in the valuation allowance resulted in a significant tax benefit in 2025.

Significant components of deferred income tax assets and liabilities consisted of the following:

1 unchanged sentence

Deferred tax assets:

Operating lease liability $ 14,203 $ 6,420

Net operating loss carryforwards 6,035 7,454

Capital loss carryforwards 182 195

Research and development credits 2,584 4,818

1 unchanged sentence

Inventory 2,213 3,925

Allowances and bad debts 492 1,646

Accrued warranty 2,029 3,392

Accrued wages and benefits 405 353

Other accrued expenses 1,544 5,042

Stock-based compensation 676 240

Capitalized research and development costs — 9,884

163(j) disallowed interest — 2,868

Contract liabilities 348 698

Operating lease liability 6,420 7,917

Other 2,266 2,973

1 unchanged sentence

Valuation allowance ( 183 ) ( 38,498 )

( 38,498 ) ( 54,314 )

Total deferred tax assets, net of valuation allowance $ 32,975 $ 8,552

5 unchanged sentences

Total deferred tax liabilities $ ( 19,653 ) $ ( 10,120 )

Net deferred tax liability

Net deferred tax asset (liability)

$ 13,322 $ ( 1,568 )

The Company’s net deferred tax liability is presented as a separate line item in the Consolidated Balance Sheets.

A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized.

The guidance on accounting for income taxes provides important factors in determining whether a deferred tax asset will be realized, including whether there has been sufficient taxable income in recent years and whether sufficient income can reasonably be expected in future years in order to utilize the deferred tax asset.

The Company has assessed the need to maintain a valuation allowance for deferred tax assets based on an assessment of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income.

Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance.

In assessing the realizability of the Company’s deferred tax assets, the Company considered whether it is more likely than not that some or all of the deferred tax assets will be realized through the generation of future taxable income.

In making this determination, the Company assessed all of the evidence available at the time, including recent earnings, forecasted income projections, historical performance, and that substantial doubt exists about the Company’s ability to continue as a going concern.

The Company determined that the negative evidence outweighed the objectively verifiable positive evidence and continues to maintain a valuation allowance against deferred tax assets .

The Company’s valuation allowance is $ 38.5 million and $ 54.3 million as of December 31, 2024 and December 31, 2023, respectively.

As of December 31, 2024, the Company has, on a tax-effected basis, $ 8.0 million in R&D and state tax credit carryforwards which begin to expire in 2025.

The Company has $ 0.6 million and $ 6.9 million of federal and state (tax effected, net of federal

tax benefit) net operating loss carryforwards, respectively, that are available to offset taxable income in the future.

The state net operating loss carryforwards begin to expir e in 2026 .

The federal net operating loss carryforwards do not expire.

Through March 31, 2025, the Company maintained a full valuation allowance against its deferred tax assets due to significant negative evidence, about realizability of the assets, including cumulative losses and substantial doubt about its ability to continue as a going concern.

Due to the successful refinancing of its debt, the Company concluded that substantial doubt about its ability to continue as a going concern no longer exists.

After evaluating all available evidence, including the alleviation of substantial doubt about the Company’s ability to continue as a going concern, recent and forecasted earnings, historical performance, and the Company’s improved financial condition, management determined that it is more likely than not that its deferred tax assets will be realized.

As a result, the Company released most of its valuation allowance during the second quarter of 2025 and now maintains a valuation allowance related to a capital loss carryforward resulting in total valuation allowance of $ 0.2 million and $ 38.5 million as of December 31, 2025 and 2024 , respectively.

For 2025, the release of the valuation allowance of $ 38.3 million consisted of $ 24.1 million of federal and $ 14.2 million of state deferred tax assets.

As of December 31, 2025, the Company had $ 6.1 million in research and development and state tax credit carryforwards which begin to expire in 2026 .

As of December 31, 2025, the Company had $ 7.6 million of state net operating loss carryforwards that are available to offset taxable income in the future.

The state net operating loss carryforwards begin to expire in 2031.

Cash payments for income taxes, disaggregated by jurisdiction, were as follows:

(in thousands) For the Year Ended December 31,

Federal $ 7,310 $ 652

State 1,708 962

Total $ 9,018 $ 1,614

Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:

(in thousands) For the Year Ended December 31,

Wisconsin $ 744 *

Pennsylvania 460 *

Illinois * 700

Minnesota * 126

*Jurisdiction below the threshold for the period presented

The change in unrecognized tax benefits excluding interest and penalties were as follows:

7 unchanged sentences

$ 1,261 $ 1,696

The amount of unrecognized tax benefits, that if recognized, would affect the annual effective tax rate was approximately $ 1.3 million and $ 0 million as of December 31, 2025 and 2024, respectively.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

As of December 31, 2025 and 2024, the amount accrued for interest and penalties was not material.

The Company reflects the liability for unrecognized tax benefits as Other noncurrent liabilities in its Consolidated Balance Sheets.

The amounts included in “reductions for tax positions of prior years” represent decreases in the unrecognized tax benefits relating to expiration of the statutes during each year shown, as well as settlements with Illinois tax authorities.

As of December 31, 2024, the Company believes the liability for unrecognized tax benefits, excluding interest and penalties, could decrease by an immaterial amount in 2025 due to lapses in the statute of limitations.

Due to the various jurisdictions in which the Company files tax returns, it is possible that there could be other changes in the amount of unrecognized tax benefits in 2025, but the amount cannot be estimated.

Unrecognized tax benefits that, if recognized, would affect the effective tax rate are not expected to be material.

With few exceptions, the major jurisdictions subject to examination by the relevant tax authorities and open tax years, stated as the Company’s fiscal years, are as follows:

The major jurisdictions subject to examination by the relevant tax authorities and open tax years, stated as the Company’s fiscal years, are as follows:

Jurisdiction Open Tax Years

1 unchanged sentence

States 2017 to 2025

The Company is currently under federal income tax audit for tax years 2014, 2015 and 2016.

The Company is currently under Illinois income tax audit for tax years 2015 and 2016.

Recent Tax Legislation

The One, Big, Beautiful Bill Act (the “Act”) was signed into law on July 4, 2025.

The Act contains significant tax law changes with various effective dates affecting business taxpayers.

Among the tax law changes that will impact the Company relate to the timing of certain tax deductions including depreciation expense, R&D expenditures and interest expense.

As a result, the Company recognized incremental tax timing benefits primarily related to the restoration of 100% bonus depreciation and the ability to immediately expense R&D costs under Section 174.

These changes did not have a material impact on the Company’s overall income tax expense for the year.

Stockholders’ Equity

13 unchanged sentences

Stock-Based Compensation

(“SARs”), Restricted Stock Awards (“RSAs”), deferred stock and performance units to its executive officers, employees, consultants and Directors.

The 2012 Plan is administered by the Compensation Committee of the Board.

The Company has an incentive compensation plan (the “2012 Plan”), which authorizes the granting of a variety of different types of awards including, but not limited to, non-qualified stock options, incentive stock options, Stock Appreciation Rights (“SARs”), Restricted Stock Awards (“RSAs”), deferred stock and performance units to its executive officers, employees, consultants and Directors.

The 2012 Plan is administered by the Compensation Committee of the Board and expires on May 26, 2028.

Under the 2012 Plan, 830,925 shares were initially made available for awards, with 700,000 additional shares added to the 2012 Plan in 2013.

21 unchanged sentences

Income tax benefit $ — $ —

The Company did not grant any SAR awards in 2024, and grante d 101,663 SAR awards in 2023.

The SAR awards granted for the year ended December 31, 2023 were all liability classified awards and remained outstanding.

As of December 31, 2024, the weighted-average remaining contractual term for the awards granted in 2023 was 8.32 years, the aggregate intrinsic value was zero and the unrecognized compensation expense was $ 1.0 million.

The Company granted 700 SAR awards in 2025 and did not grant any in 2024.

The assumptions used for determining the fair value of the SARs included the following:

18 unchanged sentences

Granted 700 65.76 —

Other 1,500 — —

Exercised ( 46,575 ) 7.51 3

4 unchanged sentences

Exercisable at December 31, 2025 21,970 $ 7.37 3.38 1

The total fair value of SARs that vested during 2024 and 2023 w as less than $ 0.1 million and $ 0.1 million, respectively.

The total aggregate intrinsic value of SARs that vested during both 2024 and 2023 w as $ 0.1 million.

Unrecognized compensation expense related to SARs as of both December 31, 2024 and 2023 was $ 0.1 million.

The total fair value of SARs that vested during both 2025 and 2024 w as less than $ 0.1 million.

The total aggregate intrinsic value of SARs that vested during 2025 and 2024 w as less than $ 0.1 million and $ 0.1 million, respectively.

Unrecognized compensation expense related to SARs as of December 31, 2025 was less than $ 0.1 million.

As of December 31, 2025, the weighted-average period over which the unrecognized compensation cost is expected to be recognized was approximately 2.56 years.

4 unchanged sentences

( 15,400 ) 3.91

( 18,389 ) 9.63

Balance as of December 31, 2024 15,000 $ 23.44

1 unchanged sentence

Balance as of December 31, 2025 15,000 $ 65.76

The total grant date fair value of restricted stock that vested during both 2024 and 2023 was $ 0.1 million.

The total aggregate fair value of restricted stock that vested during 2024 and 2023 was $ 0.2 million and less than $ 0.1 million, respectively.

Unrecognized compensation expense related to RSAs as of December 31, 2024 and 2023 was $ 0.3 million and less than $ 0.1 million, respectively.

As of December 31, 2024, the weighted-average period over which the unrecognized compensation cost is expected to be recognized was approximately 0.52 years .

The total grant date fair value of restricted stock that vested during 2025 and 2024 was $ 0.4 million and $ 0.1 million, respectively .

The total aggregate fair value of restricted stock that vested during 2025 and 2024 was $ 1.0 million and $ 0.2 million , respectively.

Unrecognized compensation expense related to RSAs as of December 31, 2025 was $ 0.9 million .

Earnings Per Share

3 unchanged sentences

The treasury stock method has been used to compute diluted earnings per share for 2025 and 2024.

The Company issued SARs and RSAs, all of which have been evaluated for their potentially dilutive effect under the treasury stock method.

The computations of basic and diluted earnings per share are as follows:

10 unchanged sentences

Earnings per share of common stock – diluted $ 4.94 $ 3.01

The aggregate number of shares excluded from the diluted earnings per share calculations because they would have been anti-dilutive were less than 0.1 million and 0.1 million shares 2024 and 2023, respectively.

The aggregate number of shares excluded from the diluted earnings per share calculations because they would have been anti-dilutive were none and less than 0.1 million shares 2025 and 2024, respectively.

For the twelve months ended December 31, 2025 and 2024, SARs and RSAs were not included in the diluted earnings per share calculations as they would have been anti-dilutive because the Company’s average stock price was less than or equal to the exercise price of the SARs or the grant price of the RSAs.

4 unchanged sentences

Commitments and Contingencies for information regarding the Company’s indemnification obligations related to certain former directors and officers of the Company.

Subsequent Events for information regarding the purchase agreement with SWIEC, and the MOR agreement with Weichai.

In January 2025, the Company entered into a five-year purchase agreement with SWIEC, for the exclusive purchase and distribution of certain engine and engine components for the fulfillment of a contract with a customer in North America.

The supply agreement includes annual minimum requirements of products ordered during the initial term.

If all minimum targets are met within the first three-year periods, the contract may be negotiated to extend beyond the five-year initial term.

The annual minimum requirements are as follows:

(in thousands)

Year Ending December 31,

2026 $ 49,937

Total $ 290,108

In February 2025, the Company entered into the MOR agreement with Weichai.

The MOR agreement requires the Company to pay Weichai a fee of 1.75 % of gross revenues generated by the sale of certain engines manufactured by Weichai.

Fees are due on a quarterly basis.

The 2025 fee is $ 0.1 million.

The MOR agreement expires in December 2029.

During the year ended December 31, 2025, PSI and KNA, a subsidiary of Weichai, were negotiating the terms of an agreement for PSI to develop and supply a 2.4L dual-fuel engine for use by KNA in the production of materials handling equipment.

Prior to entering into a written development agreement, KNA suspended its plans to purchase the engine.

PSI had completed significant development milestones at the time of suspension.

Effective December 31, 2025, the parties entered into a settlement agreement under which KNA paid approximately $ 0.5 million to resolve PSI's claims for development costs incurred.

Under the settlement agreement, KNA retains the right to resume development through December 31, 2028, and is under no obligation to do so.

Segment Reporting

22 unchanged sentences

Subsequent Events

The supply agreement includes annual minimum requirements of products ordered during the initial term.

If all minimum targets are

met within the first three-year periods, the contract may be negotiated to extend beyond the five-year initial term.

The annual minimum requirements are as follows:

(in thousands)

Year Ending December 31,

2025 $ 19,023

Total $ 309,131

In February 2025, the Company entered into the MOR agreement with Weichai.

The MOR agreement requires the Company to pay Weichai a fee of 1.75 % of gross revenues generated by the sale of certain engines manufactured by Weichai.

Fees are due on a quarterly basis.

The MOR agreement further requires the 1.75 % fee to be paid for applicable 2024 sales of these engines.

The 2024 fee is less than $ 0.1 million.

The MOR agreement expires in December 2029.

In February 2025, the Company made additional payments totaling $ 10.0 million related to the SLA.

The outstanding balance under the SLA is $ 15.0 million as of March 24, 2025.

On January 9, 2026, the Company completed the acquisition of MTL Manufacturing & Equipment, Inc.

(“MTL”), a company that specializes in the welding and fabrication of steel components, ranging from large Switchgear Sub Bases to Electrical Enclosure assemblies utilized in the data center industry, to various size fuel tanks used in power generation, for a total purchase price of $ 11.1 million.

The acquisition is expected to enhance the Company’s competitive position in the data center market through vertical integration of MTL's specialized manufacturing capabilities.

The integration is designed to provide improved supply chain control, reduced lead times, and access to MTL's established UL certifications.

The acquisition occurred after December 31, 2025, but prior to the issuance of these financial statements.

The initial accounting for the acquisition, including the allocation of purchase price to the assets acquired and liabilities assumed, is not yet complete.

Accordingly, the financial statements do not reflect any adjustments related to this acquisition.

On February 20, 2026, the U.S.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) exceeded presidential authority and were therefore invalid.

The President immediately replaced the IEEPA tariffs with tariffs under alternative statutory authority, though the scope and duration of future tariffs remain uncertain.

The Company is evaluating the impact of these developments on its supply chain costs and pricing.

PSI may be entitled to refunds of IEEPA tariffs paid during 2025, though the process and timing for obtaining such refunds remain uncertain.

To the extent the Company passed tariff costs through to customers, PSI may be required to reimburse customers for such amounts if the Company recovers IEEPA tariff refunds.

The extent to which tariffs will be reimposed under alternative statutory authorities, and their ultimate scope and duration, cannot be determined at this time.

Continued tariff uncertainty may materially affect the Company's costs, competitive position, and results of operations.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

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 8. Financial Statements and Supplementary Data