Pioneer Power Solutions, Inc.: Form 10-K for the period ended Dec 31, 2025

Overview

Pioneer Power Solutions, Inc. and its wholly owned subsidiary (referred to herein as the “Company,” “Pioneer,” “Pioneer Power,” “we,” “our” and “us”) design, manufacture, integrate, service, and sell distributed energy resources, on site and mobile power generation equipment and a platform of mobile electric vehicle (“EV”) charging solutions. Our products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Our customers include, but are not limited to, Federal and State government entities, package delivery businesses, school bus fleet operators, EV charging infrastructure developers and owners, and distributed energy developers. We are headquartered in Fort Lee, New Jersey and operate from two (2) additional locations in the United States for manufacturing, service and maintenance, engineering, and sales and administration.

U.S. dollars are reported in thousands, except for share and per share amounts (unless otherwise noted).

Description of Business Segment

In October 2024, we sold our Pioneer Custom Electrical Products Corp. (“PCEP”) business unit to a buyer (the “PCEP Sale”) as a result of a strategic change to the operations of our business.

Following the PCEP Sale, we currently have one reportable segment - Critical Power Solutions (“Critical Power”).

• Our Critical Power business provides customers with our suite of mobile EV charging solutions, power generation equipment and all forms of services, including but not limited to, preventative maintenance, repairs, fuel polishing, and remote monitoring. These products and services are marketed by our operations headquartered in Minnesota, currently doing business under our Pioneer eMobility (e-Boost) and Pioneer Critical Power (Titan) brand names.

Our Critical Power business designs, manufactures and sells mobile EV charging solutions under our e-Boost suite of products, in addition to distributing new power generation equipment, refurbishing and reselling used power generation equipment, and performing service and maintenance on our customers’ existing equipment. Many of these systems are used to maintain reliable, primary, peak shaving or emergency standby power at facilities where it is required or where the potential consequences of a power outage make it necessary, such as at major national retailers, hospitals, data centers, communications facilities, factories, military sites, office complexes and other critical operations.

In December of 2025, the Company launched two new product platforms:

1. PRYMUS - a new, mobile on-site power system concentrating on customers with requirements of 1-10 megawatts of mobile power to supplement their current energy profile,

2. PowerCore - a residential and small commercial based primary generator system integrating a DC fast charger into one solution.

Summary of Critical Power Segment Product Offerings

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Power generation systems represent considerable investments that require proper maintenance and service in order to operate reliably during a time of emergency. Our power maintenance programs provide preventative maintenance, repair and support service for our customers’ power generation systems. To support our customers in managing their critical infrastructure, we maintain inventories of repair parts, a fleet of service vehicles and a staff of certified field service technicians in the Midwest and Florida. To complete our geographic coverage, we maintain a network of field service partners located in other regions, enabling us to provide quick-response, 24/7 service capabilities that can effectively repair and maintain any make and model of back-up power equipment. Our field service organization services more than 5,900 generators owned by more than 850 customers located throughout the United States and its territories, including for multi-site, multi-state customers.

We recognize discrete revenue streams from service contracts, sales, installation, maintenance and repair services, and we offer service contracts to all owners of power generation and related equipment, whether or not the equipment was originally sold by us. Our service agreements have terms ranging from one to five years in duration, providing the Company with a recurring revenue stream.

Business Strategy

We believe we have established a stable platform from which to develop and grow our business lines, revenue, profitability and shareholder value. We are focused on internal growth through operating efficiencies, new product development, customer focus and broadening and deepening our market penetration.

We intend to build our revenue and net income through internal growth initiatives. Accomplishing these financial goals will be dependent on a number of factors, including our ability to execute the following strategies and actions:

• Establishing a scalable organizational infrastructure to support our expected growth;
• Investing in our capabilities to provide progressively more advanced equipment and service solutions;
• Continuously applying our manufacturing and service resources to their highest and best uses;
• Combining and streamlining our business unit supply chains and administrative functions; and
• Improving business processes to deliver consistency, quality and value to our customers.

Within our Critical Power business, we are actively marketing our preventive maintenance services to new national accounts including: major national retailers, telecommunications companies, data centers, banks, hospitals and health care facilities, educational institutions and property management companies. Since November 2021, we have been aggressively marketing our e-Boost mobile EV charging products to electric bus and truck manufacturers, fleet management companies, municipalities and EV infrastructure providers.

Our Industry

The market for Electrical Infrastructure equipment and Critical Power solutions is very fragmented due to the range of equipment types, electrical and mechanical properties, technological standards and service parameters required by different categories of end users for their specific applications. Many orders are custom-engineered and tend to be time-sensitive since other critical work is frequently being coordinated around the customer’s electrical equipment installation. The vast majority of North American demand for the types of solutions we provide is satisfied by thousands of producers and service companies in the United States.

We believe that several of the key industry trends supporting future growth in our industry are as follows:

• Aging and Overburdened North American Power Grid — The aging and overburdened North American power grid is expected to require significant capital expenditures to upgrade the existing infrastructure over the next several years to maintain adequate levels of reliability and efficiency. Significant capital investment will be required to relieve congestion, meet growing demand, achieve targets for efficiency, emissions and use of renewable sources, and to replace components of the U.S. power grid operating at, near or past their planned service lives.
• Increasing Long-Term Demand for Electricity and Reliable Power — The Department of Energy’s Energy Information Administration, or EIA, forecasts that total electricity use in the United States will increase by approximately 28% from 2011 to 2040. This increase is driven by anticipated population growth, economic expansion, increasing dependence on computing power throughout the economy and the increased use of electrical devices in the home. In order to meet growing demand for electricity in North America, substantial investment in increased electrical grid capacity and efficiency will be required, as well as the addition of specialized equipment to help ensure the reliability and quality of electricity for critical applications. In response to these challenges, there is an increasing trend among commercial and industrial companies to invest in on-site power sources, both for standby purposes in the event of a catastrophic power outage, or to reduce the amount of electricity they draw from the utility grid during peak periods.

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• Autonomous Vehicle Infrastructure and Rapid EV Deployment — While the broader mobile EV charging market has experienced a period of stabilization, the autonomous vehicle (“AV”) sector is entering a phase of rapid acceleration. AV charging depots require hyper-efficient deployment timelines to match the scaling of autonomous fleets. Our e-Boost solution is uniquely positioned to bridge the gap between fleet readiness and traditional utility connectivity, which can often take 12 to 24 months for high-capacity grid upgrades. The U.S. electric vehicle charging station market is projected to grow at a CAGR of 29.1% through 2030, with the fastest growth occurring in high-power DC fast charging segments (>250 kW) necessary for commercial and autonomous operations.
• Edge AI, Data Centers, and Sustainable Microgrids — The explosion of Generative Artificial Intelligence (“AI”) and Edge Computing has created an unprecedented demand for localized, “behind-the-meter” power. Global electricity demand for data centers is projected to double by 2030, with AI-optimized servers expected to account for 44% of total data center power consumption by that time. To meet this need, our PRYMUS mobile microgrid provides 1 MW to 10 MW blocks of onsite power with a 6-month deployment lead time, significantly faster than traditional infrastructure. This aligns with a broader industry shift toward decentralized energy; the global microgrid market is forecast to reach $24.44 billion by 2026, driven specifically by a 20.1% CAGR in the 5–10 MW segment often utilized for industrial and data center optimization.
• Residential Resilience and Premium Power Solutions — Consumer demand for energy independence is intensifying as the North American power grid faces increasing reliability challenges. This has created a high-value niche for “prime power” residential products. Our PowerCore system addresses this by offering 24/7/365 whole-home resiliency with integrated Level 2 and Level 3 charging. This caters to the growing segment of homeowners who view their residences as long-term financial assets and are increasingly seeking bidirectional (V2H) charging capabilities. With Level 2 infrastructure expected to see an incremental growth of over 5 million units by 2026, providing an all-in-one resiliency and high-speed charging solution captures a critical convergence of the residential and transportation energy markets.

Customers

A substantial portion of the products and services we offer are sold directly to customers by our marketing and sales personnel operating from our office locations in the United States. Our direct sales force and authorized representatives market our products and services to end users and third parties, such as original equipment manufacturers and their dealers, state and local governments, fleet management companies, school bus operators and various intermediary selling groups.

For the year ended December 31, 2025, 99% of our sales were to U.S. customers and 1% were to Canadian customers, compared to 87% of our sales were to U.S. customers and 13% were to Canadian customers for the year ended December 31, 2024. This was largely driven by companies involved in distributed generation, regulated and non-regulated utilities, and the industrial and wholesale sectors. During the years ended December 31, 2025, and 2024, we sold our electrical equipment and services to over 879 individual customers, and our 20 largest customers represented approximately 71% and 74% of our consolidated revenue, respectively.

Approximately 24% and 13% of our sales during the year ended December 31, 2025, were made to Eneridge, Inc. and SparkCharge, respectively. Approximately 22% and 13% of our sales during the year ended December 31, 2024, were made to INF Associates, LLC and British Columbia Hydro and Power Authority, respectively. Most of our sales to customers were made pursuant to specific contract terms and conditions for each project.

Revenue Backlog

Revenue backlog, which consists of purchase orders and contracts from customers that we believe to be firm, reflects the amount of revenue that we expect to realize in the future upon the satisfaction of customer orders for our products or services that are not yet complete or for which work has not yet begun. Our revenue backlog as of December 31, 2025, was approximately $12,617, as compared to $19,762 as of December 31, 2024. The decrease in our revenue backlog was primarily attributable to the fulfillment of orders for our mobile EV charging solutions that were included in backlog as of December 31, 2024 and recognized as revenue during the year ended December 31, 2025, without comparable new orders from our mobile EV charging solutions entering backlog as of December 31, 2025.

Competition

We experience intense competition from generator manufacturers and from distributors and servicers of such equipment. The number and size of our competitors varies considerably by product line and service category, with many of our competitors tending to be small, highly specialized or focused on a certain geographic market area or customer. A representative list of our direct competitors includes Xos Inc., Energy Vault, Inc., HM Cragg Co., and Interstate Power Systems, Inc.

Raw Materials and Suppliers

The principal materials purchased by us are certain electrical and engine components such as generators, transfer switches, electric vehicle chargers and related parts from a variety of suppliers. These components are available from and supplied by numerous sources at competitive prices. Unanticipated increases in component prices or disruptions in supply could increase production costs and adversely affect our profitability. Our largest suppliers during the year ended December 31, 2025, included Taylor Power Systems, Inc., Gillette Generators Inc. and Winco, Inc.

Research and Development

Because the industries in which we compete are characterized by rapid technological advances, our ability to compete successfully depends heavily upon our ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. We continue to develop new technologies to enhance existing products and services, and to expand the range of our offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology. During the years ended December 31, 2025, and 2024, we incurred $875 and $1,050, respectively, of R&D costs related to our mobile EV charging solutions, e-Boost.

Employees

As of December 31, 2025, we had 58 full-time employees.

Environmental

We are subject to numerous environmental laws and regulations concerning, among other areas, air emissions, discharges into waterways and the generation, handling, storing, transportation, treatment and disposal of waste materials. These laws and regulations are constantly changing and it is impossible to predict with accuracy the effect they may have on us in the future. Like many other industrial enterprises, our manufacturing operations entail the risk of noncompliance, which may result in fines, penalties and remediation costs, and there can be no assurance that such costs will be insignificant. To our knowledge, we are in substantial compliance with all federal, state, provincial and local environmental protection provisions, and believe that the future compliance cost should not have a material adverse effect on our capital expenditures, net income or competitive position. However, legal and regulatory requirements in these areas have been increasing and there can be no assurance that significant costs and liabilities will not be incurred in the future due to regulatory noncompliance.

Corporate History

We were originally formed in the State of Nevada in 2008. On November 30, 2009, we merged with and into Pioneer Power Solutions, Inc., a Delaware corporation, for the sole purpose of changing our state of incorporation from Nevada to Delaware and changing our name to “Pioneer Power Solutions, Inc”. On September 24, 2013, we completed an underwritten public offering, and our common stock began trading on the Nasdaq Capital Market under the symbol “PPSI”.

Available Information

Our corporate website is located at www.pioneerpowersolutions.com (http://www.pioneerpowersolutions.com). On the investor relations section of our website, we make available, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file them with or furnish them to the Securities and Exchange Commission (“SEC”). The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers, such as us, that file electronically with the SEC at www.sec.gov (http://www.sec.gov).

Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events and press and earnings releases as part of the investor relations section of our website. The contents of and the information on or accessible through our corporate website, including the investor relations portion of our website, are not a part of, and are not intended to be incorporated into, this report or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

Investing in our common stock involves a high degree of risk. Before investing in our common stock, you should carefully consider the following risks, together with the financial and other information contained in this Annual Report on Form 10–K for the year ended December 31, 2025, and our other periodic filings with the SEC. Additional risks and uncertainties that we are unaware of may become important factors that affect us. If any of the following events occur, our business, financial conditions and operating results may be materially and adversely affected. In that event, the trading price of our common stock may decline, and you could lose all or part of your investment.

Summary of Risk Factors

Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock.

• We have identified material weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock;
• Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock;
• Our operating results may vary significantly from quarter to quarter, which makes our operating results difficult to predict and can cause our operating results in any particular period to be less than comparable quarters and expectations from time to time;
• Our industry is highly competitive;
• A significant portion of our revenues have historically been concentrated and derived from a few customers. Material or significant loss of business from these customers could have an adverse effect on our business, financial condition and operating results;
• Certain of our business units have historically generated operating losses and negative cash flows, which may result in the usage of our cash;
• Our operations have been curtailed following the PCEP Sale, and we have limited sources of revenue following such sale, which may negatively impact the value and liquidity of our common stock;
• The departure or loss of key personnel could disrupt our business;
• Fluctuations in the price and supply of materials used to manufacture our products may reduce our profits;
• We may not be able to fully realize the revenue value reported in our backlog;
• We are subject to pricing pressure from our larger customers;
• Deterioration in the credit quality of several major customers could have a material adverse effect on our operating results and financial condition;
• We rely on third parties for key elements of our business whose operations are outside our control;
• Supply chain and shipping disruptions may result in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales and reputational damage, which may have a material adverse effect on our business, operating results and financial condition;
• Our business may face cybersecurity risk generally associated with our information technology systems which could materially affect our business, and our results of operations could be materially affected if our information technology systems (or third-party systems we rely on) are interrupted, damaged by unforeseen events, or fail for any extended period of time;
• Our business requires skilled labor, and we may be unable to attract and retain qualified employees;
• Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable;
• Our stock price may be volatile, which could result in substantial losses for investors;
• Our risk management activities may leave us exposed to unidentified or unanticipated risks;
• Regulatory, environmental, monetary and other governmental policies could have a material adverse effect on our profitability;

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• Global, market and economic conditions may negatively impact our business, financial condition and stock price;
• We face risks associated with litigation and claims, which could impact our financial results and condition;
• Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline;
• We are subject to financial reporting and other requirements for which our accounting, internal audit and other management systems and resources may not be adequately prepared;
• There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected;
• Any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations;
• The success of our business depends on achieving our strategic objectives, including dispositions;
• If we do not conduct an adequate due diligence investigation of a target business that we acquire, we may be required subsequently to take write downs or write-offs, restructuring, and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment;
• We may be unable to generate internal growth; and
• In the event that we fail to satisfy any of the listing requirements of the Nasdaq Capital Market, our common stock may be delisted, which could affect our market price and liquidity.

Risks Relating to Our Business and Industry

We have identified material weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that public companies evaluate and report on their systems of internal control over financial reporting. As disclosed in Part II, Item 9A, Controls and Procedures of this Annual Report on Form 10-K, our management, including our Chief Executive Officer and our Chief Financial Officer, has determined that we have two material weaknesses in our internal control over financial reporting as of December 31, 2025, a material weakness related to the lack of sufficient accounting personnel with the requisite skills, knowledge and expertise which negatively impacted the Company’s ability to maintain appropriate segregation of duties and effective controls, as well as a material weakness around information technology general controls related to user access and privileged access within systems supporting the Company’s accounting and financial reporting processes which allowed certain individuals to have elevated access to systems inconsistent with such individuals’ business needs. As a result of these material weaknesses, the Company’s management, under the supervision of the Audit Committee and with participation of the Company’s Chief Executive Officer and Chief Financial Officer, concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025.

Although we are working to remedy the material weaknesses and ineffectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures, there can be no assurance as to when the remediation plan will be fully developed and implemented or the outcome of such remediation efforts, or that in the future, additional material weaknesses will not exist, reoccur or otherwise be discovered, a risk that is significantly increased in light of the complexity of our business. Until our remediation plan is fully implemented, our management will continue to devote significant time, attention and financial resources to these efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, there will continue to be an increased risk that our future consolidated financial statements could contain errors that will be undetected. If we continue to have these existing material weaknesses, other material weaknesses or significant deficiencies in the future, it could create a perception that our financial results do not fairly state our financial condition or results of operations. See “Part II. Item 9A – Controls and Procedures.” These material weaknesses could adversely affect our business, reputation, revenues, results of operations, financial condition, and liquidity. This could also adversely affect our ability to timely file periodic reports under the Exchange Act, and limit our ability to access the capital markets through equity or debt issuances. Additional impacts could include a decline in our stock price, suspension of trading or delisting of our common stock by the Nasdaq Capital Market. Any of the foregoing could have an adverse effect on the value of our stock. For more information relating to the Company’s internal control over financial reporting, the material weaknesses that existed as of December 31, 2025, and the remediation activities undertaken by us, see Part II, Item 9A, Controls and Procedures of this Annual Report on Form 10-K. See also “—Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock.”

Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock.

We are responsible for establishing and maintaining adequate internal control over financial reporting, which 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 U.S. GAAP (as defined below). Because we are continuing to implement remedial actions to strengthen our financial control and management systems, our internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A failure to prevent or detect errors or misstatements may result in a decline in the price of our common stock and harm our ability to raise capital in the future.

If our management is unable to certify the effectiveness of our internal controls or if material weaknesses or significant deficiencies in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could harm our business and cause a decline in the price of our common stock. As disclosed under “Item 9A. Controls and Procedures” in this Annual Report on Form 10-K, in connection with preparing our financial statements for the year ended December 31, 2025, management concluded that two material weaknesses existed in our internal control over financial reporting related to the lack of sufficient accounting personnel with the requisite skills, knowledge and expertise which negatively impacted the Company’s ability to maintain appropriate segregation of duties and effective controls, as well as a material weakness in our information technology general controls related to user access and privileged access within systems supporting the Company’s accounting and financial reporting processes which allowed certain individuals to have elevated access to systems inconsistent with such individuals’ business needs. In addition, due to the same material weaknesses, we determined that our disclosure controls and procedures were not effective as of December 31, 2025. See “—We have identified two material weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.”

In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in the price of our common stock and harm our ability to raise capital. Failure to accurately report our financial performance on a timely basis could also jeopardize our listing on the Nasdaq Capital Market. Delisting of our common stock on any exchange would reduce the liquidity of the market for our common stock, which would reduce the price of, and increase the volatility of, our common stock.

We do not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all error or fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within an organization will be detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by individual acts of certain persons, by collusion of two or more people or by management override of the controls. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected in a timely manner or at all. See also “—General Risk Factors— There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.” If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results could be materially adversely affected, which could also cause investors to lose confidence in our reported financial information, which in turn could result in a reduction in the price of our common stock.

In addition, acquisitions can pose challenges in implementing the required processes, procedures and controls in the new operations. Companies that are acquired by us may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by the securities laws that currently apply to us.

Our operating results may vary significantly from quarter to quarter, which makes our operating results difficult to predict and can cause our operating results in any particular period to be less than comparable quarters and expectations from time to time.

Our quarterly results may fluctuate significantly from quarter to quarter due to a variety of factors, many of which are outside our control and have the potential to materially and adversely affect our results. Factors that affect our operating results include the following:

• the size, timing and terms of sales and orders, especially large customer orders;
• variations caused by customers delaying, deferring or canceling purchase orders or making smaller purchases than expected;
• the timing and volume of work under new agreements;
• the spending patterns of customers;
• customer orders received;
• a change in the mix of our products having different margins;

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• a change in the mix of our customers, contracts and business;
• increases in design and manufacturing costs;
• the length of our sales cycles;
• the rates at which customers renew their contracts with us;
• changes in pricing by us or our competitors, or the need to provide discounts to win business;
• a change in the demand or production of our products caused by severe weather conditions;
• our ability to control costs, including operating expenses;
• losses experienced in our operations not otherwise covered by insurance;
• the ability and willingness of customers to pay amounts owed to us;
• the timing of significant investments in the growth of our business, as the revenue and profit we hope to generate from those expenses may lag behind the timing of expenditures;
• costs related to the acquisition and integration of companies or assets;
• general economic trends, including changes in equipment spending or national or geopolitical events such as economic crises, wars or incidents of terrorism; and
• future accounting pronouncements and changes in accounting policies.

Accordingly, our operating results in any particular quarter may not be indicative of the results that you can expect for any other quarter or for an entire year.

Our industry is highly competitive.

The electrical equipment manufacturing industry is highly competitive and barriers to entry to manufacture similar systems to the ones the Company sells is easily imitated. On the service side of the Company’s business, we already compete with many other companies offering similar services. Many of these companies have a larger geographic footprint than Pioneer and substantially greater financial resources.

A significant portion of our revenues have historically been and continue to be concentrated and derived from a few customers. Material or significant loss of business from customers could have an adverse effect on our business, financial condition and operating results.

We historically have depended, and expect to continue to depend on a small number of customers for a large portion of our business each quarter, due to the scope of certain projects. Any change in the level of orders from customers could have a significant impact on our results of operations, and a loss of business from customers could have an adverse effect on our business, financial condition and operating results. Approximately 24% and 13% of our sales during the year ended December 31, 2025, were made to Eneridge, Inc. and SparkCharge, respectively. As of December 31, 2025, one customer represented 100% of the Company’s lease receivable balance. The majority of our sales to these customers and other customers in the past were made pursuant to contract terms and conditions for each project and it is expected that future sales will similarly be made pursuant to the relevant contract terms and conditions for future projects. See “Item 1. Business - Customers”.

Our Critical Power business has historically generated operating losses and negative cash flows, which may result in the usage of our cash.

We currently have one business unit (Critical Power), which has been unable to earn positive income and generate positive cash flow in its recent history. With $14,959 of cash on hand as of December 31, 2025, any such losses will negatively impact our cash balance.

Our operations have been curtailed following the PCEP Sale, and we have limited sources of revenue following such sale, which may negatively impact the value and liquidity of our common stock.

The PCEP Sale has reduced the size of our business operations, and our sources of revenue are limited to our Critical Power segment following the closing of the PCEP Sale. Although our board of directors may use a portion of the proceeds from the PCEP Sale to support the business operations remaining following the PCEP Sale, there can be no assurance that we will be successful at carrying out the operations of our remaining businesses, or that we will be successful at generating revenue. A failure by us to secure additional sources of revenue following the closing of the PCEP Sale could negatively impact the value and liquidity of our common stock.

The departure or loss of key personnel could disrupt our business.

We depend heavily on the continued efforts of Nathan J. Mazurek, our principal executive officer, and on other senior officers who are responsible for the day-to-day management of our operating subsidiary. In addition, we rely on our current electrical and mechanical design engineers, many of whom are important to our operations and would be difficult to replace. We cannot be certain that any of these individuals will continue in their respective capacities for any particular period of time. The departure or loss of key personnel, or the inability to hire and retain qualified employees, could negatively impact our ability to manage our business.

Fluctuations in the price and supply of materials used to manufacture our products may reduce our profits.

The principal materials purchased by us are certain electrical and engine components such as generators, transfer switches, electric vehicle chargers and related parts from a variety of suppliers. These components are available from, and supplied by, numerous sources at competitive prices. Unanticipated increases in component prices or disruptions in supply could increase production costs and adversely affect our profitability. We cannot provide any assurances that we will not experience difficulties sourcing our materials in the future.

We may not be able to fully realize the revenue value reported in our backlog.

We routinely have a backlog of work to be completed on contracts representing a significant portion of our annual sales. As of December 31, 2025, our order backlog was $12,617. Orders included in our backlog are represented by customer purchase orders and service contracts that we believe to be firm. Backlog consists of customer orders that either (1) have not yet been started or (2) are in progress and are not yet completed. In the latter case, the revenue value reported in backlog is the remaining value associated with work that has not yet been billed and recognized as revenue. From time to time, customer orders are canceled that appeared to have a high certainty of going forward at the time they were recorded as new business taken. In the event of a customer order cancellation, we may be reimbursed for certain costs but typically have no contractual right to the total revenue reflected in our backlog. In addition to us being unable to recover certain direct costs, canceled customer orders may also result in additional unrecoverable costs due to the resulting underutilization of our assets.

We are subject to pricing pressure from our larger customers.

We face significant pricing pressures in our business segment from our larger customers. Because of their purchasing size, our larger customers can influence market participants to compete on price terms. Such customers also use their buying power to negotiate lower prices. If we are not able to offset pricing reductions resulting from these pressures by improved operating efficiencies and reduced expenditures, those price reductions may have an adverse impact on our financial results.

Deterioration in the credit quality of several major customers could have a material adverse effect on our operating results and financial condition.

Significant assets included in our working capital are accounts receivable and lease receivable from customers. If customers responsible for a significant amount of accounts receivable and lease receivable become insolvent or are otherwise unable to pay for products and services, or become unwilling or unable to make payments in a timely manner, our operating results and financial condition could be adversely affected. A significant deterioration in the economy could have an adverse effect on these accounts receivable and lease receivable, which could result in longer payment cycles, increased collection costs and defaults in excess of management’s expectations. Deterioration in the credit quality of our major customers could have a material adverse effect on our operating results and financial condition.

We rely on third parties for key elements of our business whose operations are outside our control.

We rely on arrangements with third-party shippers and carriers such as independent shipping companies for timely delivery of our products to our customers. As a result, we may be subject to carrier disruptions and increased costs due to factors that are beyond our control, including labor strikes, inclement weather, natural disasters and rapidly increasing fuel costs. If the services of any of these third parties become unsatisfactory, we may experience delays in meeting our customers’ product demands and we may not be able to find a suitable replacement on a timely basis or on commercially reasonable terms. Any failure to deliver products to our customers in a timely and accurate manner may damage our reputation and could cause us to lose customers.

We also utilize third-party distributors to sell, install and service certain of our products. While we are selective in whom we choose to represent us, it is difficult for us to ensure that our distributors consistently act in accordance with the standards we set for them. To the extent any of our end-customers have negative experiences with any of our distributors or manufacturer’s representatives; it could reflect poorly on us and damage our reputation, thereby negatively impacting our financial results.

Supply chain and shipping disruptions may result in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales and reputational damage, which may have a material adverse effect on our business, operating results and financial condition.

Our third-party manufacturers and suppliers have experienced, and expect to continue to experience, supply chain disruption and shipping disruptions, including disruptions or delays in loading container cargo in ports of origin or off-loading cargo at ports of destination, congestion in port terminal facilities, labor supply and shipping container shortages, inadequate equipment and persons to load, dock and offload container vessels and for other reasons. These disruptions may impact our ability to receive materials and products from our manufacturers and suppliers, to distribute our products to our customers in a cost-effective and timely manner and to meet customer demand, all of which could have an adverse effect on our financial condition and results of operations. There can be no assurance that further unforeseen events impacting the supply chain will not have a material adverse effect on us in the future. Additionally, the impacts that supply chain disruptions have on our third-party manufacturers and suppliers are not within our control. It is not currently possible to predict how long it will take for these supply chain disruptions to cease or ease. Prolonged supply chain disruptions that may impact us or our manufacturers and suppliers could interrupt product manufacturing, increase raw material and product lead times, increase raw material and product costs, impact our ability to meet customer demand and result in lost sales and reputational damage, all of which could have a material adverse effect on our business, financial condition and results of operations.

Our business may face cybersecurity risk generally associated with our information technology systems which could materially affect our business, and our results of operations could be materially affected if our information technology systems (or third-party systems we rely on) are interrupted, damaged by unforeseen events, or fail for any extended period of time.

We rely on information systems (“IS”) in our business to obtain, rapidly process, analyze, manage and store data to among other things:

• receive, process and ship orders on a timely basis; and
• manage the accurate billing and collections from our customers.

IS risks have generally increased in recent years, and a cyberattack that bypasses our IS security systems causing an IS security breach may lead to a material disruption of our business operations and/or the loss of business information resulting in a material effect on our business.

In addition, we develop products and provide services to our customers that are technology-based, and a cyberattack that bypasses the IS security systems of our products or services causing a security breach and/or perceived security vulnerabilities in our products or services could also cause significant reputational harm, and actual or perceived vulnerabilities may lead to claims against us by our customers. Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our products to comply with applicable legal requirements, may not only cause us significant reputational harm, but may also lead to claims against us by our customers and involve fines and penalties, costs for remediation, and settlement expenses.

Our IS utilize certain third-party service organizations that manage a portion of our information systems, and our business may be materially affected if these third-party service organizations are subject to an IS security breach. Risks associated with these and other IS security breaches may include, among other things:

• future results could be materially affected due to theft, destruction, loss, misappropriation or release of confidential data or intellectual property;
• operational or business delays resulting from the disruption of information systems and subsequent clean-up and mitigation activities;
• we may incur claims, fines and penalties, and costs for remediation, or substantial defense and settlement expenses; and
• negative publicity resulting in reputation or brand damage with our customers, partners or industry peers.

We have various insurance policies, covering risks in amounts that we consider adequate. There can be no assurance that the insurance coverage we maintain is sufficient or will be available in adequate amounts or at a reasonable cost. Successful claims for misappropriation or release of confidential or personal data brought against us in excess of available insurance or fines or other penalties assessed or any claim that results in significant adverse publicity against us could have a material adverse effect on our business and our reputation.

Our business requires skilled labor, and we may be unable to attract and retain qualified employees.

Our ability to maintain our productivity and profitability will be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements. We may experience shortages of qualified personnel. We cannot be certain that we will be able to maintain an adequate skilled labor force necessary to operate efficiently and to support our growth strategy or that our labor expenses will not increase as a result of a shortage in the supply of skilled personnel. Labor shortages, increased labor costs or loss of our most skilled workers could impair our ability to deliver on time to our customers (thereby creating a risk that we lose our customers to competition) and would inhibit our ability to maintain our business or grow our revenues, and may adversely impact our profitability.

An overall tightening and increasingly competitive labor market has been observed in the United States. A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our manufacturing facilities and overall business. If we are unable to hire and retain employees capable of performing at a high-level, or if mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, have unintended negative effects, our business could be adversely affected. An overall labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows.

Demand for Edge AI infrastructure, data centers, and distributed energy solutions may not develop as expected or increase demand for our solutions.

The projections regarding the anticipated expansion of generative AI, Edge Computing and data center infrastructure and the global electricity demand from data centers are subject to significant uncertainty and may not materialize within the expected timeframes, or at all. Factors such as slower adoption of AI or Edge Computing technologies, improvements in data center energy efficiency, changes in regulatory or utility frameworks, or broader economic conditions could reduce or delay infrastructure investment and related power demand. Our PRYMUS mobile microgrid platform is designed to provide scalable onsite power solutions in 1 MW to 10 MW blocks with relatively rapid deployment timelines. However, our ability to generate revenue from this platform depends in part on continued growth in demand for decentralized energy systems serving data centers and similar industrial applications. If demand for such solutions develops more slowly than anticipated, if customers adopt alternative energy or infrastructure solutions, or if centralized grid capacity expands more quickly than expected demand for our products and services could be materially reduced. In addition, industry projections regarding the growth of the global microgrid market, including estimates of market size and compound annual growth rates for certain capacity segments, are based on third-party data and assumptions that may prove inaccurate. If the microgrid market does not grow as forecast, or if competing technologies or market developments reduce the need for distributed power generation, our business, financial condition, and results of operations could be materially and adversely affected.

Risks Relating to Our Organization

Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.

Our board of directors is authorized to issue shares of preferred stock in one or more series and to fix the voting powers, preferences and other rights and limitations of the preferred stock. Accordingly, we may issue shares of preferred stock with a preference over our common stock with respect to dividends or distributions on liquidation or dissolution, or that may otherwise adversely affect the voting or other rights of the holders of common stock. Issuances of preferred stock, depending upon the rights, preferences and designations of the preferred stock, may have the effect of delaying, deterring or preventing a change of control, even if that change of control might benefit our stockholders. In addition, we are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless (i) prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; (ii) the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (iii) on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

Section 203 of the Delaware General Corporation Law could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

General Risk Factors

Our stock price may be volatile, which could result in substantial losses for investors.

The market price of our common stock is highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control, including the following:

• technological innovations or new products and services by us or our competitors;
• additions or departures of key personnel, including Nathan J. Mazurek, our chairman, president and chief executive officer;
• sales of our common stock, including management shares;
• limited availability of freely-tradable “unrestricted” shares of our common stock to satisfy purchase orders and demand;
• our ability to execute our business plan;
• operating results that fall below expectations;
• loss of any strategic relationship;
• industry developments;
• economic and other external factors;
• our ability to manage the costs of maintaining adequate internal financial controls and procedures in connection with the acquisition of additional businesses;
• period-to-period fluctuations in our financial results; and
• announcements of acquisitions.

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In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also significantly affect the market price of our common stock.

Our risk management activities may leave us exposed to unidentified or unanticipated risks.

Although we maintain insurance policies for our business, these policies contain deductibles and limits of coverage. We estimate our liabilities for known claims and unpaid claims and expenses based on information available as well as projections for claims incurred but not reported. However, insurance liabilities are difficult to estimate due to various factors and we may be unable to effectively anticipate or measure potential risks to our company. If we suffer unexpected or uncovered losses, any of our insurance policies or programs are terminated for any reason or are not effective in mitigating our risks, we may incur losses that are not covered by our insurance policies or that exceed our accruals or that exceed our coverage limits and could adversely impact our consolidated results of operations, cash flows and financial position.

Regulatory, environmental, monetary and other governmental policies could have a material adverse effect on our profitability.

We are subject to international, federal, provincial, state and local laws and regulations governing environmental matters, including emissions to air, discharge to waters and the generation and handling of waste. We are also subject to laws relating to occupational health and safety. The operation of manufacturing plants involves a high level of susceptibility in these areas, and there is no assurance that we will not incur material environmental or occupational health and safety liabilities in the future. Moreover, expectations of remediation expenses could be affected by, and potentially significant expenditures could be required to comply with, environmental regulations and health and safety laws that may be adopted or imposed in the future. Future remediation technology advances could adversely impact expectations of remediation expenses. We can give no assurance that any lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results. Types of potential litigation cases include product liability, contract, employment-related, labor relations, personal injury or property damage, intellectual property, stockholder claims and claims arising from any injury or damage to persons, property or the environment from hazardous substances used, generated or disposed of in the conduct of our business. Adverse outcomes in some or all of these claims may result in significant monetary damages that could adversely affect our ability to conduct our business.

Global, market and economic conditions may negatively impact our business, financial condition and stock price.

Concerns over inflation, geopolitical issues, the U.S. financial markets, capital and exchange controls, unstable global credit markets and financial conditions, have led to periods of significant economic instability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, and increased unemployment rates. Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive. In addition, there is a risk that one or more of our current or future service providers, manufacturers, suppliers, our third-party payors, and other partners could be negatively affected by difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives.

In addition, we face several risks associated with international business and are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes, economic sanctions, trade wars and their collateral impacts and other international events. Any of these changes could have a material adverse effect on our reputation, business, financial condition or results of operations. There may be changes to our business if there is instability, disruption or destruction in a significant geographic region, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest; and natural or man-made disasters, including famine, flood, fire, earthquake, storm or disease. In addition, the consequences of the ongoing conflict between Russia and Ukraine, and the ongoing conflict in the Middle East, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations.

Additionally, since the start of the Trump Administration in 2025, U.S. policy changes have been implemented at a rapid pace and additional changes are likely. Changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

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

Our business, results of operations and financial condition could be affected by significant litigation or claims adverse to us. Types of potential litigation cases include product liability, contract, employment-related, labor relations, personal injury or property damage, intellectual property, trade secret or unfair competition claims, stockholder claims and claims arising from any injury or damage to persons, property or the environment from hazardous substances used, generated or disposed of in the conduct of our business. We have been involved in the past and may in the future be involved in legal proceedings.

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock and make it more difficult for us to raise funds through future offerings of common stock. Our stockholders and the holders of our options and warrants may sell substantial amounts of our common stock in the public market. The availability of these shares of our common stock for resale in the public market has the potential to cause the supply of our common stock to exceed investor demand, thereby decreasing the price of our common stock.

In addition, the fact that our stockholders, option holders and warrant holders can sell substantial amounts of our common stock in the public market, whether or not sales have occurred or are occurring, could make it more difficult for us to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

We are subject to financial reporting and other requirements for which our accounting, internal audit and other management systems and resources may not be adequately prepared.

We are subject to reporting and other obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the requirements of Section 404 of the Sarbanes-Oxley Act. Section 404 requires us to conduct an annual management assessment of the effectiveness of our internal controls over financial reporting. These reporting and other obligations place significant demands on our management, administrative, operational, internal audit and accounting resources. Any failure to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price.

In addition, our internal controls will also include those of any company or business that we may acquire in the future. Acquired companies or businesses are likely to have different standards, controls, contracts, procedures and policies, making it more difficult to implement and harmonize company-wide financial, accounting, information and other systems. As a result, our internal controls may become more complex and we may require significantly more resources to ensure they remain effective. Failure to implement required new or improved controls, or difficulties encountered in their implementation, either in our existing business or in businesses that we may acquire, could harm our operating results or cause us to fail to meet our reporting obligations.

There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.

The ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002 require us to identify material weaknesses in internal control over financial reporting, which is a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with accounting principles generally accepted in the United States. Our management, including our chief executive officer and chief financial officer, does not expect that our internal controls and disclosure controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, in our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

In addition, discovery and disclosure of a material weakness, including the material weaknesses identified in our internal control over financial reporting as of December 31, 2025, by definition, could have a material adverse impact on our consolidated financial statements. Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect how our stock trades. This could in turn negatively affect our ability to access equity markets for capital.

Any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations.

In an effort to effectively compete in the specialty electrical equipment manufacturing and service businesses, where increasing competition and industry consolidation prevail, we have sought to acquire complementary businesses in the past and will continue to do so in the future. In the event of any future acquisitions, we could:

• issue additional securities that would dilute our current stockholders’ percentage ownership or provide the purchasers of the additional securities with certain preferences over those of common stockholders, such as dividend or liquidation preferences;
• incur debt and assume liabilities; and
• incur large and immediate write-offs of intangible assets, accounts receivable or other assets.

These events could result in significant expenses and decreased revenue, which could adversely affect the market price of our common stock. In addition, integrating acquired businesses and completing any future acquisitions involve numerous operational and financial risks. These risks include difficulty in assimilating acquired operations, diversion of management’s attention, and the potential loss of key employees or customers of acquired operations. Furthermore, companies acquired by us may not generate financial results consistent with our management’s plans at the time of acquisition.

The success of our business depends on achieving our strategic objectives, including dispositions.

We continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives. When we decide to sell assets or a business, we may encounter difficulty in finding buyers or executing alternative exit strategies on acceptable terms in a timely manner, which could delay the accomplishment of our strategic objectives. Alternatively, we may dispose of a business at a price or on terms that are less than we had anticipated, or with the exclusion of assets that must be divested separately. After reaching an agreement with a buyer for the disposition of a business, the transaction remains subject to the satisfaction of pre-closing conditions, which may prevent us from completing the transaction. Dispositions may also involve continued financial involvement in the divested business, such as through continuing equity ownership, transition service agreements, guarantees, indemnities or other current or contingent financial obligations. Under these arrangements, performance by the divested businesses or other conditions outside our control could affect our future financial results.

If we do not conduct an adequate due diligence investigation of a target business that we acquire, we may be required subsequently to take write downs or write-offs, restructuring, and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

As part of our acquisition strategy, we will need to conduct a due diligence investigation of one or more target businesses. Intensive due diligence is time consuming and expensive due to the operations, accounting, finance and legal professionals who must be involved in the due diligence process. We may have limited time to conduct such due diligence. Even if we conduct extensive due diligence on a target business that we acquire, we cannot assure you that this diligence will uncover all material issues relating to a particular target business, or that factors outside of the target business and outside of our control will not later arise. If our diligence fails to identify issues specific to a target business or the environment in which the target business operates, we may be forced to write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in us reporting losses. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our common stock. In addition, charges of this nature may cause us to violate net worth or other covenants that we may be subject to as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.

We may be unable to generate internal growth.

Our ability to generate internal growth will be affected by, among other factors, our ability to attract new customers, increases or decreases in the number or size of orders received from existing customers, hiring and retaining skilled employees and increasing volume utilizing our existing facilities. Many of the factors affecting our ability to generate internal growth may be beyond our control, and we cannot be certain that our strategies will be implemented with positive results or that we will be able to generate cash flow sufficient to fund our operations and to support internal growth. If we do not achieve internal growth, our results of operations will suffer and we will likely not be able to expand our operations or grow our business.

In the event that we fail to satisfy any of the listing requirements of the Nasdaq Capital Market, our common stock may be delisted, which could affect our market price and liquidity.

Our common stock is listed on the Nasdaq Capital Market. For continued listing on the Nasdaq Capital Market, we will be required to comply with the continued listing requirements, including the minimum market capitalization standard, the minimum stockholders’ equity requirement, the corporate governance requirements and the minimum closing bid price requirement, among other requirements. In the event that we fail to satisfy any of the listing requirements of the Nasdaq Capital Market, our common stock may be delisted. If our securities are delisted from trading on the Nasdaq Capital Market, and we are not able to list our securities on another exchange or to have them quoted on the Nasdaq Capital Market, our securities could be quoted on the OTC Markets. As a result, we could face significant adverse consequences including:

• a limited availability of market quotations for our securities;
• a determination that our common stock is a “penny stock,” which would require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
• a limited amount of news and analyst coverage; and
• a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3 or obtain additional financing in the future).

We operate in the industrial sector, which is subject to various cybersecurity risks that could adversely affect our business, financial condition, and results of operations, including intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy laws and other litigation and legal risk; and reputational risk. We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. We currently have security measures in place to protect our employees, customers, and corporate data and prevent data loss and other security breaches, including a cybersecurity risk assessment program. Both management and our board of directors are actively involved in the continuous assessment of risks from cybersecurity threats, including prevention, mitigation, detection, and remediation of cybersecurity incidents.

Our current cybersecurity risk assessment program consists of not only real-time monitoring of things from patching policies to mandatory multi-factor authentication, but also policies in place for encryption of data both in transmission and at rest. The program outlines governance, policies and procedures, and technology we use to oversee and identify risks from cybersecurity threats and is informed by previous cybersecurity incidents we have observed in our company, in our industry, and as reported by our cybersecurity partner CCS Business Solutions, Inc.

Management, along with CCS Business Solutions, Inc., are responsible for day-to-day assessment and management of risks from cybersecurity threats, including the prevention, mitigation, detection, and remediation of cybersecurity incidents. The individuals currently serving in these roles are the Chief Financial Officer as the representative of our management, and the CEO of CCS Business Solutions, Inc. The CEO of CCS Business Solutions, Inc. has over 20 years of experience in the technology industry, with most of that experience being specifically in cybersecurity. He also has formal education with a degree in Computer Science with a concentration in Artificial Intelligence, mainly involving self-learning algorithms.

The board of directors is responsible for oversight of risks from cybersecurity threats in conjunction with our senior management team and CCS Business Solutions, Inc. This includes receiving reports and updates from our outside partner CCS Business Solutions, Inc. with respect to the management of risks from cybersecurity threats. Such reports cover our information technology security program, including its current status, capabilities, objectives and plans, as well as the evolving cybersecurity threat landscape. Additionally, the board of directors considers risks from cybersecurity threats as part of its oversight of our business strategy and risk management.

We routinely undertake activities to prevent, detect, and minimize the effects of cybersecurity incidents, including assessments of our data access in the form of user audits, real-time monitoring of risk on a per system level as it pertains to AV completeness, system vulnerabilities, and third-party patching. In addition to this, we actively monitor and practice disaster recovery and business continuity plans in the event that any risk is able to circumvent the controls we have in place.

We leverage the advice of third-party consultants and auditors to help us assess and identify risks from cybersecurity threats, including the threat of a cybersecurity incident, and manage our risk assessment program. Among other things, these providers perform an audit of the datacenter from the top down annually, to ensure that controls are effective, still implemented to the fullest, and are meeting industry standards.

We also have policies and procedures to oversee and identify the risks from cybersecurity threats associated with our use of third-party service providers. Our primary technology service provider undergoes annual evaluation through our Sarbanes-Oxley audit procedures, which provides insight into its internal operations and includes review of its SSAE-18 report.

To date, no cybersecurity incident (or aggregation of incidents) or cybersecurity threat has materially affected our results of operations or financial condition. However, an actual or perceived breach of our security could damage our reputation, or subject us to third-party lawsuits, regulatory fines or other actions or liabilities, any of which could adversely affect our business, operating results or financial condition. It is for this reason we are constantly reevaluating our cybersecurity stance, posturing against industry standards to try and effectively mitigate our risk.

We believe our facilities are well maintained, in proper condition to operate at higher than current levels and are adequately insured. We do not anticipate significant difficulty in renewing or extending existing leases as they expire, or in replacing them with equivalent facilities or office locations.

From time to time, we may become involved in lawsuits, investigations and claims that arise in the ordinary course of business. As of the date hereof, we are not aware of or a party to any legal proceedings to which we or our subsidiary is a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or any such proceedings known to be contemplated by governmental authorities that we believe could have a material adverse effect on our business, financial condition or operating results.

We can give no assurance that any lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.

We are not aware of any material proceedings in which any of our directors, officers or affiliates or any registered or beneficial shareholder of more than 5% of our common stock is an adverse party or has a material interest adverse to our interest.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”

Overview

We design, manufacture, integrate, service and sell distributed energy resources, on site power generation equipment and mobile EV charging solutions. Our products and services are sold to a broad range of customers in the utility, industrial and commercial markets. Our customers include, but are not limited to, Federal and State government entities, package delivery businesses, school bus fleet operators, EV charging infrastructure developers and owners, and distributed energy developers. We are headquartered in Fort Lee, New Jersey and operate from two (2) additional locations in the United States for manufacturing, service and maintenance, engineering, and sales and administration.

We intend to grow our business through continued internal investments in product development and expansion of our manufacturing, engineering, sales and marketing personnel.

Following the sale of our PCEP business unit in October 2024, we currently have one reportable segment: Critical Power. Our Critical Power business provides customers with our suite of mobile e-Boost© EV charging solutions, power generation equipment and all forms of preventative maintenance, repairs, remote monitoring and other service on our customers’ equipment. These products and services are marketed by our operations headquartered in Minnesota, currently doing business under the Titan, Pioneer eMobility and Pioneer Critical Power brand names.

U.S. dollars are reported in thousands, except for share and per share amounts (unless otherwise noted).

Critical Accounting Estimates

The preparation of consolidated financial statements and related disclosures are in conformity with U.S. GAAP. These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates and judgments upon which we rely are reasonable based upon information available to us at the time that we make these estimates and judgments. To the extent that there are material differences between these estimates and actual results, our financial results will be affected.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

Lessor Accounting — Sales-Type Leases

We enter into lease and rental arrangements with customers for our mobile EV charging equipment and related power generation equipment. At lease commencement, we evaluate each arrangement under ASC 842, Leases, to determine the appropriate lease classification. Leases that meet any one of the five classification criteria under ASC 842-10-25-2 are classified as sales-type leases, for which we derecognize the underlying asset, recognize a net investment in the lease (comprised of the lease receivable and the unguaranteed residual asset), and recognize any selling profit or loss at commencement. Interest income on the net investment is recognized over the lease term using the effective interest method.

This accounting requires judgment in several areas. Lease classification depends on management’s estimates of the economic life and fair value of the underlying equipment, which we determine based on historical experience, expected technological obsolescence, and anticipated usage. Changes in these estimates can shift a classification, significantly altering the timing of revenue recognition. We also estimate unguaranteed residual values based on expected equipment fair value at lease expiration, considering anticipated market demand, remaining useful life, and technological changes in the mobile EV charging market. Because this market is still developing, limited historical resale data is available and residual value estimates are subject to greater uncertainty than for more established equipment categories. In addition, the rate implicit in the lease, which incorporates the credit standing of the lessee, fair value of the asset, and expected residual value, affects the measurement of the net investment and the allocation of income over the lease term.

Changes in the above estimates could materially affect revenue, cost of revenue, and the carrying value of our net investment in sales-type leases. A decrease in fair values of the underlying asset would reduce the net investment and selling profit recognized at commencement. A reclassification from sales-type to operating would shift revenue from the commencement period to recognition ratably over the lease term.

In addition, there are other items within our consolidated financial statements that require estimation but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our consolidated financial statements.

Our significant accounting policies are more fully described in Note 2 – Summary of Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

RESULTS OF OPERATIONS

Overview of December 31, 2025, and 2024, Operating Results

Selected financial and operating data for our reportable business segment for the most recent two years is summarized below. This information, as well as the selected financial data provided in Note 13 to our Consolidated Financial Statements and related notes included in this Annual Report on Form 10-K, should be referred to when reading our discussion and analysis of results of operations below. Our summary of operating results during the years ended December 31, 2025, and 2024, are as follows (in thousands):

Backlog. Revenue backlog, which consists of purchase orders and contracts from customers that we believe to be firm, reflects the amount of revenue that we expect to realize in the future upon the satisfaction of customer orders for our products or services that are not yet complete or for which work has not yet begun. Backlog may vary significantly from reporting period to reporting period due to the timing of customer commitments.

Our revenue backlog as of December 31, 2025, from our Critical Power business was $12,617, a decrease of $7,145, or 36.2%, when compared to $19,762 as of December 31, 2024. The following table represents the progression of our backlog as of December 31, 2025, and 2024 (in thousands):

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Revenue

The following table represents our revenues by major product category for the periods indicated (in thousands, except percentages):

For the year ended December 31, 2025, our revenue from our Critical Power segment increased by $4,748, or 20.8% to $27,627, up from $22,879 during the year ended December 31, 2024, primarily due to an increase in sales and rentals of our suite of mobile EV charging solutions, e-Boost, partially offset by a decrease in service sales.

Gross Profit and Margin

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

For the year ended December 31, 2025, our gross margin from our Critical Power segment decreased to 12.4% of revenues, as compared to 24.1% during the year ended December 31, 2024. The decrease was primarily attributable to an unfavorable sales mix, in addition to a contract with a customer in our Pioneer eMobility business which generated lower margins on the initial units due to higher costs incurred during the early stages of production as we refined our manufacturing processes and optimized build efficiency.

Operating Expenses

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

Selling, General and Administrative Expense. For the year ended December 31, 2025, consolidated selling, general and administrative expense decreased by approximately $566, or 5.8%, to $9,146, as compared to $9,712 during the year ended December 31, 2024, primarily due to a decrease in stock-based compensation expense and professional fees, partially offset by an increase in information technology costs and insurance expense. As a percentage of our consolidated revenue, selling, general and administrative expense decreased to 33.1% during the year ended December 31, 2025, as compared to 42.4% during the year ended December 31, 2024, primarily due to the increase in total revenue during the year ended December 31, 2025.

R&D Expenses. Research and development expenses in our Critical Power segment consists of costs incurred in performing research and development activities, including salaries, benefits, overhead costs, contract services and other related costs. During the year ended December 31, 2025, we incurred $875 of R&D expenses related to developing our mobile e-Boost EV charging solutions as compared to $1,050 during the year ended December 31, 2024.

Operating Loss from Continuing Operations

The following table represents our operating loss for the periods indicated (in thousands):

During the year ended December 31, 2025, our operating loss from continuing operations increased by approximately $1,347, or 25.7%, to $6,595, as compared to $5,248 during the year ended December 31, 2024, primarily due to an increase in cost of goods sold resulting in a lower gross profit.

Non-Operating Income (Expense) from Continuing Operations

Interest Income. For the year ended December 31, 2025, we had interest income of approximately $739, as compared to interest income of approximately $431 during the year ended December 31, 2024. We generated most of our interest income from our cash on hand during the year ended December 31, 2025.

Other (Expense) Income. Other (expense) income in the consolidated statements of operations reports certain gains and losses associated with activities not directly related to our core operations.

For the year ended December 31, 2025, other non-operating expense was $518, as compared to other non-operating income of $50 during the year ended December 31, 2024, primarily due to the loss on our equity method investment.

Provision for Income Taxes. Our provision for income taxes reflects an effective tax rate on loss before taxes of (1.2)% for the year ended December 31, 2025, as compared to 29.7% for the year ended December 31, 2024, as set forth below (in thousands):

Net (Loss) Earnings per Share from Continuing Operations

We generated a net loss from continuing operations of $6,448 for the year ended December 31, 2025, as compared to $3,349 during the year ended December 31, 2024.

Our net loss from continuing operations per basic and diluted share for the year ended December 31, 2025, was $0.58, compared to a net loss from continuing operations per basic and diluted share of $0.31 for the year ended December 31, 2024.

Income from Discontinued Operations, Net of Income Taxes

Income from discontinued operations, net of tax was $449 during the year ended December 31, 2025, as compared to $35,204 during the year ended December 31, 2024. The decrease was primarily attributable to the completion of the PCEP Sale on October 29, 2024. Income from discontinued operations during 2024 included a $35,044 gain recognized on the sale of PCEP as well as the operating results of PCEP through the closing date. Income from discontinued operations during 2025 was primarily attributable to a net working capital adjustment with the buyer of the PCEP sale, net of tax.

LIQUIDITY AND CAPITAL RESOURCES

General. As of December 31, 2025, we had $14,959 of cash on hand generated primarily from the PCEP Sale. On October 29, 2024, we closed on the PCEP Sale for gross cash proceeds of $48,000 and $2,000 in equity. On January 7, 2025, we paid a one-time special cash dividend of an aggregate of $16,665. As of December 31, 2024, we recorded a consideration due to the buyer of the PCEP Sale of $3,347 related to a net working capital adjustment. On April 16, 2025, we and the buyer from the PCEP Sale finalized the net working capital adjustment and as a result, we recorded a $1,147 adjustment to the consideration due to the buyer of the PCEP Sale. During the year ended December 31, 2025, we paid the $2,200 consideration to the buyer of the PCEP Sale.

The continuing impacts of the rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments, such as the ongoing conflict between Russia and Ukraine, and the ongoing conflict in the Middle East, have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time. Additionally, the shutdown of the U.S. federal government, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariff policies and regulations, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. As a result of the current uncertainty in economic activity, we are unable to predict the potential size and duration of the impact on our revenue and our results of operations, if any. The extent of the potential impact of these macroeconomic factors on our operational and financial performance will depend on a variety of factors, including the extent of geopolitical disruption and its impact on our clients, partners, industry, and employees, all of which are uncertain at this time and cannot be accurately predicted. We continue to monitor the effects of these macroeconomic factors and intend to take steps deemed appropriate to limit the impact on our business. During the year ended December 31, 2025, we were able to operate substantially at capacity.

There can be no assurance that precautionary measures, whether adopted by us or imposed by others, will be effective, and such measures could negatively affect our sales, marketing, and client service efforts, delay and lengthen our sales cycles, decrease our employees’, clients’, or partners’ productivity, or create operational or other challenges, any of which could harm our business and results of operations.

The cash flows related to the discontinued operations have not been segregated and are included in the consolidated statements of cash flows.

Cash Used in Operating Activities. Cash used in our operating activities was $5,818 during the year ended December 31, 2025, as compared to cash used in our operating activities of $6,212 during the year ended December 31, 2024. The decrease in cash used in operating activities is primarily due to working capital fluctuations and the payment of federal and state income taxes.

Cash Used in/ Provided by Investing Activities. Cash used in investing activities during the year ended December 31, 2025, was $3,896, as compared to cash provided by our investing activities of $38,876 during the year ended December 31, 2024. The increase in cash used in investing activities is primarily due to the payment of the $2,200 consideration to the buyer of the PCEP Sale during the year ended December 31, 2025. During the year ended December 31, 2025, and 2024, additions to our property and equipment were $2,677 and $3,759, respectively.

During the year ended December 31, 2025, we received a cash dividend of $981 from our equity method investee. We elected to apply the cumulative earnings approach to classify distributions received from equity method investments in our consolidated statements of cash flows. Under this method, distributions received from equity method investees are included in our consolidated statements of cash flows as operating activities, unless the cumulative distributions exceed our share of cumulative equity in the investee’s net income (loss). In such cases, the excess distributions are considered returns of investment and are classified as investing activities. As of December 31, 2025, our cumulative distributions were $981, and our share of cumulative equity in the investee’s net loss was $601. As such, the cash distribution received during the year ended December 31, 2025, was classified as investing activity in the consolidated statements of cash flows.

Cash Used in/ Provided by Financing Activities. Cash used in our financing activities was $16,949 during the year ended December 31, 2025, as compared to cash provided by our financing activities $5,376 during the year ended December 31, 2024. The increase in cash used in financing activities is primarily due to the payment of a one-time special cash dividend.

Working Capital. As of December 31, 2025, we had working capital of $20,659, including $14,959 of cash, compared to working capital of $26,679, including $41,622 of cash on hand as of December 31, 2024.

Assessment of Liquidity. As of December 31, 2025, we had $14,959 of cash on hand generated primarily from the PCEP Sale. We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the sale of the transformer business units in August 2019, the completion of the PCEP Sale in October 2024 and the sale of common stock. Historically, our cash requirements were generally for operating activities, debt repayment, capital improvements and acquisitions.

We expect to meet our cash needs with our working capital and cash flows from operating activities in the long-term. We expect our cash requirements to be generally for operating activities, capital improvements and product development. We expect that product development and promotional activities related to our new initiatives will continue in the near future and we expect to continue to incur costs related to such activities. We expect that our cash balance is sufficient to fund operations for the next twelve months from the date our consolidated financial statements are issued.

As of December 31, 2025, we had no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that had, or that may have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Capital Expenditures

Our additions to property and equipment were $2,677 during the year ended December 31, 2025, as compared to $3,759 of additions during the year ended December 31, 2024.

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

We believe that our future operating results will continue to be subject to quarterly variations based upon a wide variety of factors, including the cyclical nature of the electrical equipment industry and the markets for our products and services. Our operating results could also be impacted by changing customer requirements and exposure to fluctuations in prices of important raw supplies, such as copper, steel and aluminum. We have various insurance policies, including cybersecurity, covering risks in amounts that we consider adequate. In addition to these measures, we attempt to recover other cost increases through improvements to our manufacturing efficiency and through increases in prices where competitively feasible. Lastly, other economic conditions we cannot foresee may affect customer demand. In addition, the consequences of the ongoing geopolitical conflicts, such as the ongoing conflict between Russia and Ukraine, and the ongoing conflict in the Middle East, including related sanctions and countermeasures, and the effects of rising global inflation, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. We predominately sell to customers in the industrial production markets. Accordingly, changes in the condition of any of our customers may have a greater impact than if our sales were more evenly distributed between different end markets. For a further discussion of factors that may affect future operating results see the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

New Accounting Pronouncements

The information required by this Item is provided in “Note 2 - Summary of Significant Accounting Policies” to our consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements not yet adopted by us which would have a material impact on our consolidated financial statements.

Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of our “disclosure controls and procedures”, as defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K. The disclosure controls and procedures evaluation was done in conjunction with an independent consultant and consulting firm and under the supervision and with the participation of management, including our chief executive officer and chief financial officer. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. As of December 31, 2025, based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were not effective. In light of this determination, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting, the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of internal control over financial reporting 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 over time.

Management, including our chief executive officer and our chief financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. In our assessment of the effectiveness of internal control over financial reporting as of December 31, 2025, we determined that the Company’s internal control over financial reporting was not effective as of December 31, 2025, due to material weaknesses related to i) a lack of sufficient accounting personnel with the requisite skills, knowledge and expertise resulting in an inability to maintain proper segregation of duties and effective controls and ii) information technology general controls related to user access and privileged access within systems supporting the Company’s accounting and financial reporting processes which allowed certain individuals to have elevated access to systems inconsistent with such individuals’ business needs.

Management’s Plan to Remediate the Material Weaknesses

The Company is executing a comprehensive remediation plan centered on implementing a new enterprise resource planning (“ERP”) system designed to enhance automation, improve process consistency and strengthen the reliability of financial reporting. The new ERP replaces multiple legacy systems and manual workflows with a single integrated platform containing embedded controls and standardized processes.

During the year ended December 31, 2025, the Company completed major stages of the implementation, including process design, system configuration, and initial deployment. As part of this effort, management is refining key process-level controls, enhancing IT general controls, including strengthening controls related to system security and user access, implementing additional automated monitoring activities and providing additional training as needed to relevant personnel. Internal audit and external specialists continue to support the assessment of the new control framework.

The Company remains committed to completing the remaining ERP implementation phases and dedicating the resources necessary to strengthen its control environment.

Additionally, the Company plans to hire additional accounting and finance personnel with the requisite skills, knowledge and expertise to address identified control deficiencies.

The Company is committed to maintaining a strong internal control environment and believes these remediation efforts will represent significant improvements in its controls over the control environment. Additional controls may also be required over time. While the Company believes that these efforts will improve its internal control over financial reporting, the Company will not be able to conclude whether the steps the Company is taking will remediate the material weaknesses in internal control over financial reporting until a sufficient period of time has passed to allow management to test the design and operational effectiveness of the new and enhanced controls. Until the remediation steps set forth above are fully implemented and tested, the material weaknesses described above will continue to exist.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting, as permitted by the rules of the SEC.

Changes in Internal Control over Financial Reporting

As of November 1, 2025, the Company completed the initial implementation of a new ERP system designed to enhance the integration and automation of its financial and operational processes. The implementation of the ERP system resulted in changes to internal controls over financial reporting, including updates to certain processes, transaction workflows, system based controls and data interfaces. These changes were part of a planned system upgrade intended to strengthen the overall control environment.

In connection with the ERP implementation, management performed additional testing and monitoring activities to validate the design and operating effectiveness of affected controls. These activities included user training, parallel processing, reconciliation procedures, and enhanced supervision during the transition period. As of December 31, 2025, management is still in the process of enhancing and refining controls and system configurations.

Other than described above, there have been no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2025, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.