UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-35212

PIONEER POWER SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware		27-1347616
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

400 Kelby Street, 12th Floor
Fort Lee, New Jersey		07024
(Address of principal executive offices)		(Zip Code)

(212) 867-0700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		PPSI		Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

The number of shares outstanding of the registrant’s common stock, $0.001 par value, as of November 13, 2025, was 11,095,266.

PIONEER POWER SOLUTIONS, INC.

Form 10-Q

For the Quarterly Period Ended September 30, 2025

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	1
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025, and 2024	1
Unaudited Condensed Consolidated Balance Sheets at September 30, 2025, and December 31, 2024	2
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025, and 2024	3
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025, and 2024	4
Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	24
Item 4. Controls and Procedures	25

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	26
Item 1A. Risk Factors	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3. Defaults Upon Senior Securities	26
Item 4. Mine Safety Disclosures	26
Item 5. Other Information	26
Item 6. Exhibits	27

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

PIONEER POWER SOLUTIONS, INC.

Condensed Consolidated Statements of Operations

(In thousands, except for share and per share amounts)

(Unaudited)

	2025			2024			2025			2024
	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenues	$	6,888		$	6,416		$	21,998		$	13,126
Cost of goods sold		6,248			4,894			19,896			10,428
Gross profit		640			1,522			2,102			2,698
Operating expenses
Selling, general and administrative		1,976			1,980			6,878			6,168
Research and development		111			256			726			705
Total operating expenses		2,087			2,236			7,604			6,873
Operating loss from continuing operations		(1,447	)		(714	)		(5,502	)		(4,175	)
Interest income (expense), net		184			(24	)		615			27
Other (expense) income, net		(438	)		-			(118	)		40
Loss before income taxes		(1,701	)		(738	)		(5,005	)		(4,108	)
Income tax expense		69			-			69			-
Net loss from continuing operations		(1,770	)		(738	)		(5,074	)		(4,108	)
(Loss) income from discontinued operations, net of income taxes		(580	)		(383	)		467			(331	)
Net loss	$	(2,350	)	$	(1,121	)	$	(4,607	)	$	(4,439	)

Basic (loss) earnings per share:
Loss from continuing operations	$	(0.16	)	$	(0.07	)	$	(0.46	)	$	(0.39	)
(Loss) earnings from discontinued operations		(0.05	)		(0.03	)		0.04			(0.03	)
Basic loss per share	$	(0.21	)	$	(0.10	)	$	(0.42	)	$	(0.42	)

Diluted (loss) earnings per share:
Loss from continuing operations	$	(0.16	)	$	(0.07	)	$	(0.46	)	$	(0.39	)
(Loss) earnings from discontinued operations		(0.05	)		(0.03	)		0.04			(0.03	)
Diluted loss per share	$	(0.21	)	$	(0.10	)	$	(0.42	)	$	(0.42	)

Weighted average common shares outstanding:
Basic		11,095,266			10,917,038			11,106,439			10,652,911
Diluted		11,095,266			10,917,038			11,186,975			10,652,911

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PIONEER POWER SOLUTIONS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except for share amounts)

(Unaudited)

	September 30,			December 31,
	2025			2024
ASSETS
Current assets
Cash	$	17,336		$	41,622
Accounts receivable, net of allowance for credit losses of $15 and $13 as of September 30, 2025, and December 31, 2024, respectively		4,606			7,826
Inventories		6,780			6,068
Prepaid expenses and other current assets		325			1,141
Total current assets		29,047			56,657
Property and equipment, net		5,663			6,503
Operating lease right-of-use assets		353			530
Financing lease right-of-use assets		377			221
Investments		821			2,000
Lease receivable and other assets		1,319			40
Total assets	$	37,580		$	65,951

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	4,384		$	4,543
Current portion of operating lease liabilities		131			244
Current portion of financing lease liabilities		139			109
Deferred revenue		871			991
Consideration due to buyer		-			3,347
Income taxes payable		756			4,079
Dividend payable		-			16,665
Total current liabilities		6,281			29,978
Operating lease liabilities, non-current portion		233			301
Financing lease liabilities, non-current portion		249			121
Other long-term liabilities		118			122
Total liabilities		6,881			30,522
Stockholders’ equity
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued		-			-
Common stock, $0.001 par value, 30,000,000 shares authorized; 11,095,266 and 11,120,266 shares issued and outstanding on September 30, 2025, and December 31, 2024, respectively		11			11
Additional paid-in capital		35,295			35,418
Accumulated deficit		(4,607	)		-
Total stockholders’ equity		30,699			35,429
Total liabilities and stockholders’ equity	$	37,580		$	65,951

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PIONEER POWER SOLUTIONS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	2025			2024
	For the Nine Months Ended
	September 30,
	2025			2024
Operating activities
Net loss	$	(4,607	)	$	(4,439	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		753			471
Amortization of right-of-use financing leases		92			93
Amortization of right-of-use operating leases		177			551
Change in allowance for credit losses		112			(46	)
Stock-based compensation		25			334
Loss attributable to equity method investee		198			-
Loss on disposal of property and equipment		183			-
Selling profit on sales-type lease		(749	)		-
Gain on change in consideration due to buyer		(1,147	)		-
Changes in current operating assets and liabilities:
Accounts receivable, net		3,060			(966	)
Inventories		(110	)		(8,520	)
Prepaid expenses and other assets		1,360			5,048
Accounts payable, accrued liabilities and other liabilities		(499	)		(1,550	)
Income taxes		(3,323	)		(5	)
Deferred revenue		(120	)		5,477
Operating lease liabilities		(185	)		(566	)
Net cash used in operating activities		(4,780	)		(4,118	)

Investing activities
Purchase of property and equipment		(1,532	)		(1,277	)
Payment of consideration payable		(2,200	)		-
Dividend received from equity method investee		981			-
Net cash used in investing activities		(2,751	)		(1,277	)

Financing activities
Net proceeds from issuance of common stock		-			4,986
Payment of cash dividend		(16,665	)		-
Principal repayments of financing leases		(90	)		(93	)
Net cash (used in)/ provided by financing activities		(16,755	)		4,893

Decrease in cash		(24,286	)		(502	)
Cash
Cash, beginning of year		41,622			3,582
Cash, end of year	$	17,336		$	3,080

Supplemental cash flow information:
Interest paid	$	8		$	26
Income taxes paid, net of refunds		3,924			-
Non-cash investing and financing activities:
Surrender and retirement of common stock		148			224
Transfer from property and equipment to inventory		(602	)		-
Sales-type lease origination		1,410			-
Derecognition of assets in exchange for net investment in sales-type lease		(661	)		-
Property and equipment obtained in exchange for accounts payable and accrued liabilities		339			-
Finance lease ROU assets obtained in exchange for finance lease liabilities		248			-
Operating lease ROU assets obtained in exchange for operating lease liabilities		-			3,337

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PIONEER POWER SOLUTIONS, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except for share amounts)

(Unaudited)

					Additional					Total
	Common Stock				paid-in		Accumulated			stockholders’
	Shares		Amount		capital		deficit			equity
Balance - June 30, 2024		10,917,038	$	11	$	38,724	$	(22,947	)	$	15,788
Net loss		-		-		-		(1,121	)		(1,121	)
Stock-based compensation		-		-		13		-			13
Balance - September 30, 2024		10,917,038	$	11	$	38,737	$	(24,068	)	$	14,680

Balance - June 30, 2025		11,095,266	$	11	$	35,285	$	(2,257	)	$	33,039
Net loss		-		-		-		(2,350	)		(2,350	)
Stock-based compensation		-		-		10		-			10
Balance - September 30, 2025		11,095,266	$	11	$	35,295	$	(4,607	)	$	30,699

						Additional						Total
	Common Stock					paid-in			Accumulated			stockholders’
	Shares			Amount		capital			deficit			equity
Balance - January 1, 2024		9,930,022		$	10	$	33,837		$	(19,629	)	$	14,218
Net loss		-			-		-			(4,439	)		(4,439	)
Stock-based compensation		125,000			-		334			-			334
Surrender and retirement of common stock		(57,541	)		-		(224	)		-			(224	)
Issuance of common stock, net of transaction costs		919,557			1		4,790			-			4,791
Balance - September 30, 2024		10,917,038		$	11	$	38,737		$	(24,068	)	$	14,680

Balance - January 1, 2025		11,120,266		$	11	$	35,418		$	-		$	35,429
Balance		11,120,266		$	11	$	35,418		$	-		$	35,429
Net loss		-			-		-			(4,607	)		(4,607	)
Stock-based compensation		-			-		25			-			25
Surrender and retirement of common stock		(25,000	)		-		(148	)		-			(148	)
Balance - September 30, 2025		11,095,266		$	11	$	35,295		$	(4,607	)	$	30,699
Balance		11,095,266		$	11	$	35,295		$	(4,607	)	$	30,699

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PIONEER POWER SOLUTIONS, INC.

Notes to Unaudited Condensed Consolidated Financial Statements for the Quarterly Period Ended September 30, 2025

(In thousands, except for share and per share amounts)

1. BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES

Organization and Operations

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

Segments

In determining operating and reportable segments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting (“ASC 280”), the Company concluded that it has one reportable segment: Critical Power Solutions (“Critical Power”), as defined in its Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2025.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. The Company believes that the disclosures made are adequate to make the information presented not misleading to the reader. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim consolidated financial statements have been included. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year. The year-end balance sheet data was derived from audited consolidated financial statements but this filing does not include all disclosures required by U.S. GAAP for a year-end balance sheet.

ASC 740-270 requires the use of an estimated annual effective tax rate to compute the tax provision during an interim period unless certain exceptions are met. The Company is currently in the process of estimating its annual effective tax rate for the year ending December 31, 2025, and, as such, the annual effective tax rate is unknown.

These unaudited condensed interim consolidated financial statements include the accounts of Pioneer and Titan Energy Systems, Inc. (“Titan”), its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company and its subsidiary included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Liquidity

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated financial statements, as of September 30, 2025, the Company had $17,336 of cash on hand and working capital of $22,766. The cash on hand was generated primarily from the sale (the “PCEP Sale”) of the Company’s former wholly owned subsidiary, Pioneer Custom Electrical Products Corp. (“PCEP”). On October 29, 2024, the Company closed on the PCEP sale for gross cash proceeds of $48,000 and $2,000 in equity. As of December 31, 2024, the Company recorded a consideration due to the buyer of the PCEP Sale of $3,347 related to a net working capital adjustment. On April 16, 2025, the Company and the buyer of the PCEP Sale finalized the net working capital adjustment and as a result, the Company recorded a $1,147 adjustment to the consideration due to the buyer of the PCEP Sale during the three months ended March 31, 2025. On April 16, 2025, the Company paid the $2,200 consideration due to the buyer of the PCEP Sale. See Note 8 – Discontinued Operations for details.

The Company has historically met its cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the sale of the transformer business units in August 2019, the completion of the sale of the PCEP business unit in October 2024, and the sale of common stock. Historically, the Company’s cash requirements were generally for operating activities, debt repayment, capital improvements and acquisitions. The Company expects to meet its cash needs with the working capital and cash flows from the Company’s operating activities. The Company expects its cash requirements to be generally for operating activities, product development and capital improvements. The Company expects that its current cash balance is sufficient to fund operations for the next twelve months from the date our unaudited condensed consolidated financial statements are issued.

Risks and Uncertainties

The continuing impacts of the rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments, such as the ongoing conflict between Russia and Ukraine, and the ongoing conflict between Israel and Hamas, have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by the Company’s clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time. Additionally, 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, the Company is unable to predict the potential size and duration of the impact on its revenue and its results of operations, if any. The extent of the potential impact of these macroeconomic factors on the Company’s operational and financial performance will depend on a variety of factors, including the extent of geopolitical disruption and its impact on the Company’s clients, partners, industry, and employees, all of which are uncertain at this time and cannot be accurately predicted. The Company continues to monitor the effects of these macroeconomic factors and intends to take steps deemed appropriate to limit the impact on its business.

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

Rounding

All dollar amounts (except share and per share data) presented are stated in thousands of dollars, unless otherwise noted. Amounts may not foot due to rounding.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Since the Annual Report for the year ended December 31, 2024, there have been no material changes to the Company’s significant accounting policies, except as disclosed in this note.

Recent Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures that reflect how operations and related tax risks, as well as how tax planning and operational opportunities, affect the tax rate and prospects for future cash flows. This standard is effective for the Company’s annual reporting beginning January 1, 2025, with early adoption permitted. The Company is currently assessing the impact that adoption of this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220- 40)”, and in January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”. This standard requires public companies to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The new standard, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact that adoption of this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

In May 2025, the FASB issued ASU 2025-04, “Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Scope Application of Profits Interest and Share-Based Customer Payments”. This ASU provides clarification on how to account for share-based payments made to customers, including updated guidance on performance conditions and forfeiture estimation. It also removes the reference to the ASC 606 constraint guidance for recognizing such awards. The amendments are effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact that adoption of this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

In September 2025, the Financial Accounting Standards Board FASB issued ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer.” This ASU refines the scope of Topic 815 to exclude certain contracts whose underlyings are based on operations or activities specific to one of the parties, rather than on general market variables, and clarifies the accounting for share-based noncash consideration received from a customer under Topic 606. The amendments specify that an entity should apply the revenue guidance to share-based consideration until the right to receive or retain that consideration becomes unconditional, at which point subsequent changes in fair value are recognized outside of revenue. The Company is currently assessing the impact that adoption of this new accounting guidance will have on its consolidated financial statements and footnote disclosures.

Revenue Recognition

Bill and Hold Arrangements

From time to time, the Company enters into bill and hold arrangements, whereby the Company sells mobile EV charging equipment and the equipment is warehoused at a Company or third party location pursuant to directions received from the Company’s customer. Even though the equipment is not physically in the customer’s possession, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in a bill and hold arrangement when: customer acceptance specifications have been met, legal title has transferred, the customer has a present obligation to pay for the product and the risk and rewards of ownership have transferred to the customer.

Additionally, all the following bill and hold criteria must be met in order for control to be transferred to the customer: the reason for the bill and hold arrangement is substantive, the customer has requested the product be warehoused, the product has been identified as separately belonging to the customer, the product is currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or direct it to another customer.

Lessor Arrangements

The Company determines whether an arrangement is or contains a lease at inception. The Company leases generators and mobile EV charging equipment to certain of its customers. As a lessor, when a lease meets certain criteria indicating that the Company has effectively transferred control of the underlying asset to the customer, the lease is classified as a sales-type lease. When a lease does not meet the criteria for a sales-type lease but meets the criteria of a direct financing lease, the lease is classified as a direct financing lease. When none of the required criteria for sales-type lease or direct-financing lease are met, the lease is classified as an operating lease.

Sales-type leases are recognized as a net investment in the lease on the unaudited consolidated balance sheets. The net investment comprises the lease receivable including any unguaranteed residual value of the underlying asset. For sales-type leases, product revenue is generally recognized upon lease commencement. The discounted unguaranteed residual value of the underlying leased assets is not material to the net investment in the lease balance. The Company monitors the performance of customers who leased equipment and are subject to ongoing payments. No allowance has been recorded for the receivables under the leasing arrangements.

The lease terms are included in the Company’s contracts and the determination of whether the Company’s contracts contain leases generally does not require significant assumptions or judgments. Leasing revenues do not include material amounts of variable payments. Lessees do not provide residual value guarantees on rented equipment.

3. REVENUES

Nature of the Company’s products and services

The Company’s principal products and services include distributed energy resources, power generation equipment and mobile electric vehicle charging solutions.

Products

The Company’s Electrical Infrastructure business (included in discontinued operations; see Note 8 – Discontinued Operations for details) provided electric power systems and equipment and distributed energy resources that helped customers effectively and efficiently protect, control, transfer, monitor and manage their electric energy needs.

The Company’s Critical Power business provides customers with power generation equipment and the Company’s suite of mobile e-Boost electric vehicle charging solutions.

Services

Power generation systems represent considerable investments that require proper maintenance and service in order to operate reliably during a time of emergency. The Company’s power maintenance programs provide preventative maintenance, repair and support service for the Company’s customers’ power generation systems.

The timing of revenue recognition, customer billings and cash collections results in accounts receivable, contract assets and deferred revenue at the end of each reporting period. Contract assets include unbilled amounts typically resulting from revenue recognized exceeding amounts billed to customers for contracts utilizing an input method based on the proportion of labor hours incurred as compared to the total estimated labor hours for the fixed-fee contract performance obligations. The Company bills customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries.

Revenue Recognition

During the three months ended September 30, 2025, and 2024, the Company recognized $45 and $0 of equipment revenue over time, respectively, from its Critical Power segment. Additionally, the Company recognized $3,780 and $3,494 of revenue at a point in time from the sale of its products, which is typically recognized upon delivery, from its Critical Power segment during the three months ended September 30, 2025, and 2024, respectively. There were no bill and hold arrangements during the three months ended September 30, 2025, and 2024.

During the nine months ended September 30, 2025, and 2024, the Company recognized $221 and $45 of equipment revenue over time, respectively, from its Critical Power segment. Additionally, the Company recognized $11,590 and $5,395 of revenue at a point in time from the sale of its products, which is typically recognized upon delivery, from its Critical Power segment during the nine months ended September 30, 2025, and 2024, respectively. Included within point in time revenue during the nine months ended September 30, 2025, was $2,337 of revenue recognized pursuant to bill and hold arrangements. There were no bill and hold arrangements during the nine months ended September 30, 2024.

Service revenues include maintenance contracts that are recognized over time based on the contract term and repair services which are recognized as services are delivered. The Company recognized $2,857 and $2,401 of service revenue during the three months ended September 30, 2025, and 2024, respectively. The Company recognized $7,590 and $6,456 of service revenue during the nine months ended September 30, 2025, and 2024, respectively.

Under its continuing operations, the Company recognizes revenue as services are provided. Amounts billed and due from customers, as well as the value of unbilled account receivables, are generally classified within current assets in the unaudited condensed consolidated balance sheets.

The change in deferred revenue as of September 30, 2025, was driven primarily by ordinary course contract activity. As of January 1, 2024, the Company had a deferred revenue balance of $307.

For the three months ended September 30, 2025, and 2024, the Company recognized revenue of $17 and $70, respectively, related to amounts that were included in deferred revenue as of December 31, 2024, and 2023, respectively, resulting primarily from the progress made on the various active contracts during the respective reporting periods.

For the nine months ended September 30, 2025, and 2024, the Company recognized revenue of $478 and $170, respectively, related to amounts that were included in deferred revenue as of December 31, 2024, and 2023, respectively, resulting primarily from the progress made on the various active contracts during the respective reporting periods.

As of September 30, 2025, the Company had $871 related to contract liabilities where performance obligations have not yet been satisfied, which has been included within deferred revenue in the unaudited condensed consolidated balance sheet.

Concentration of Risk

For the three months ended September 30, 2025, the Company derived 19% and 17% of its revenue from two customers. For the three months ended September 30, 2024, the Company derived 45% and 10% of its revenue from two customers.

For the nine months ended September 30, 2025, the Company derived 30% of its revenue from one customer. For the nine months ended September 30, 2024, the Company derived 22%, 10% and 10% of its revenue from three customers.

As of September 30, 2025, three customer’s outstanding receivable balance equaled 53% of the total outstanding receivable balance. As of December 31, 2024, one customer’s outstanding receivable balance equaled 72% of the total outstanding receivable balance.

As of September 30, 2025, one customer represented 100% of the Company’s lease receivable balance.

Return of a product requires that the buyer obtain permission in writing from the Company. When the buyer requests authorization to return material for reasons of their own, the buyer will be charged for placing the returned goods in saleable condition, restocking charges and for any outgoing and incoming transportation paid by the Company. The Company warrants title to the products, and also warrants the products on date of shipment to the buyer, to be of the kind and quality described in the contract, merchantable, and free of defects in workmanship and material. Returns and warranties during the three and nine months ended September 30, 2025, were $85 and $609, respectively. Returns and warranties during the three and nine months ended September 30, 2024, were insignificant.

Disaggregated Revenue

The following table presents the Company’s revenues disaggregated by revenue discipline:

SCHEDULE OF REVENUE DISAGGREGATED

	2025			2024		2025		2024
	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2025			2024		2025		2024
Revenues - ASC 606
Products	$	3,825		$	3,494	$	11,811	$	5,440
Services		2,857			2,401		7,590		6,456
Total revenues - ASC 606	$	6,682		$	5,895		19,401		11,896
Revenues - ASC 842
Sales-type lease revenue		(7	)		-		1,403		-
Fixed lease revenue		213			521		1,194		1,230
Total revenues - ASC 842		206			521		2,597		1,230
Total revenue	$	6,888		$	6,416

SEC Form 10-Q filed by Pioneer Power Solutions Inc.