Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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 June 30, 2023

☐ 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 August 11, 2023 was 10,009,545.

PIONEER POWER SOLUTIONS, INC.

Form 10-Q

For the Quarterly Period Ended June 30, 2023

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	1
Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022	1
Consolidated Balance Sheets at June 30, 2023 (Unaudited) and December 31, 2022	2
Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	3
Unaudited Consolidated Statement of Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022	4
Notes to Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	24
Item 4. Controls and Procedures	24

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	25
Item 1A. Risk Factors	25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3. Defaults Upon Senior Securities	25
Item 4. Mine Safety Disclosures	25
Item 5. Other Information	25
Item 6. Exhibits	25

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

PIONEER POWER SOLUTIONS, INC.

Consolidated Statements of Operations

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

(Unaudited)

	2023			2022 (Revised)			2023			2022 (Revised)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022 (Revised)			2023			2022 (Revised)
Revenues	$	12,130		$	4,863		$	20,638		$	11,225
Cost of goods sold		9,419			4,800			15,714			10,239
Gross profit		2,711			63			4,924			986
Operating expenses
Selling, general and administrative		3,089			2,585			5,246			4,331
Total operating expenses		3,089			2,585			5,246			4,331
Loss from operations		(378	)		(2,522	)		(322	)		(3,345	)
Interest income		(79	)		(104	)		(132	)		(206	)
Other expense, net		20			117			7			129
Loss before income taxes		(319	)		(2,535	)		(197	)		(3,268	)
Income tax expense		-			-			-			7
Net loss	$	(319	)	$	(2,535	)	$	(197	)	$	(3,275	)

Loss per share:
Basic	$	(0.03	)	$	(0.26	)	$	(0.02	)	$	(0.34	)
Diluted	$	(0.03	)	$	(0.26	)	$	(0.02	)	$	(0.34	)

Weighted average common shares outstanding:
Basic		9,908,434			9,727,878			9,838,989			9,684,610
Diluted		9,908,434			9,727,878			9,838,989			9,684,610

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

PIONEER POWER SOLUTIONS, INC.

Consolidated Balance Sheets

(In thousands, except for share amounts)

	2023			2022
	June 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS
Current assets
Cash	$	9,624		$	10,296
Accounts receivable, net		5,835			11,139
Inventories		8,457			8,748
Prepaid expenses and other current assets		2,625			2,853
Total current assets		26,541			33,036
Property and equipment, net		2,383			1,800
Operating lease right-of-use assets		1,110			1,450
Financing lease right-of-use assets		523			727
Other assets		138			162
Total assets	$	30,695		$	37,175

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	6,791		$	7,239
Current portion of operating lease liabilities		733			703
Current portion of financing lease liabilities		192			355
Deferred revenue		4,462			10,665
Total current liabilities		12,178			18,962
Operating lease liabilities, non-current portion		423			797
Financing lease liabilities, non-current portion		353			418
Other long-term liabilities		57			65
Total liabilities		13,011			20,242
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; 9,994,545 and 9,644,545 shares issued and outstanding on June 30, 2023 and December 31, 2022, respectively		10			10
Additional paid-in capital		33,821			32,859
Accumulated other comprehensive income		-			14
Accumulated deficit		(16,147	)		(15,950	)
Total stockholders’ equity		17,684			16,933
Total liabilities and stockholders’ equity	$	30,695		$	37,175

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

PIONEER POWER SOLUTIONS, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	2023			2022 (Revised)
	Six Months Ended
	June 30,
	2023			2022 (Revised)
Operating activities
Net loss	$	(197	)	$	(3,275	)
Adjustments to reconcile net loss to net cash provided by/ (used in) operating activities:
Depreciation		227			73
Amortization of right-of-use financing leases		205			124
Amortization of imputed interest		-			(214	)
Amortization of right-of-use operating leases		340			328
Change in receivable reserves		44			(141	)
Stock-based compensation		962			716
Other		(13	)		-
Changes in current operating assets and liabilities:
Accounts receivable		5,283			(2,642	)
Inventories		291			(3,987	)
Prepaid expenses and other assets		224			(67	)
Income taxes		(4	)		27
Accounts payable and accrued liabilities		(449	)		1,796
Deferred revenue		(6,204	)		5,966
Operating lease liabilities		(343	)		(325	)
Net cash provided by/ (used in) operating activities		366			(1,621	)

Investing activities
Purchases of property and equipment		(810	)		(174	)
Net cash used in investing activities		(810	)		(174	)

Financing activities
Net proceeds from the exercise of options for common stock		-			17
Principal repayments of financing leases		(228	)		(136	)
Net cash used in financing activities		(228	)		(119	)

Decrease in cash		(672	)		(1,914	)
Cash, beginning of period		10,296			11,699
Cash, end of period	$	9,624		$	9,785

Non-cash investing and financing activities:
Acquisition of right-of-use assets and lease liabilities	$	-		$	551

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

PIONEER POWER SOLUTIONS, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands, except for share amounts)

(Unaudited)

	Shares		Amount		capital		income		deficit			equity
							Accumulated
	Common Stock				Additional paid-in		other compre- hensive		Accumulated			Total stockholders’
	Shares		Amount		capital		income		deficit			equity
Balance - March 31, 2022 (revised)		9,644,545	$	10	$	31,914	$	14	$	(13,052	)	$	18,886
Net loss		-		-		-		-		(2,535	)		(2,535	)
Stock-based compensation		-		-		659		-		-			659
Balance - June 30, 2022 (revised)		9,644,545	$	10	$	32,573	$	14	$	(15,587	)	$	17,010

Balance - March 31, 2023		9,769,545	$	10	$	33,002	$	-	$	(15,828	)	$	17,184
Net loss		-		-		-		-		(319	)		(319	)
Stock-based compensation		225,000		-		819		-		-			819
Balance - June 30, 2023		9,994,545	$	10	$	33,821	$	-	$	(16,147	)	$	17,684

							Accumulated
	Common Stock				Additional paid-in		other compre- hensive			Accumulated			Total stockholders’
	Shares		Amount		capital		income			deficit			equity
Balance - January 1, 2022		9,640,545	$	10	$	31,840	$	14		$	(12,312	)	$	19,552
Net loss		-		-		-		-			(3,275	)		(3,275	)
Stock-based compensation		-		-		716		-			-			716
Exercise of stock options		4,000		-		17		-			-			17
Balance - June 30, 2022 (revised)		9,644,545	$	10	$	32,573	$	14		$	(15,587	)	$	17,010

Balance - January 1, 2023		9,644,545	$	10	$	32,859	$	14		$	(15,950	)	$	16,933
Balance		9,644,545	$	10	$	32,859	$	14		$	(15,950	)	$	16,933
Net loss		-		-		-		-			(197	)		(197	)
Stock-based compensation		350,000		-		962		-			-			962
Other		-		-		-		(14	)		-			(14	)
Balance - June 30, 2023		9,994,545	$	10	$	33,821	$	-		$	(16,147	)	$	17,684
Balance		9,994,545	$	10	$	33,821	$	-		$	(16,147	)	$	17,684

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

PIONEER POWER SOLUTIONS, INC.

Notes to Unaudited Consolidated Financial Statements for the Quarterly Period Ended June 30, 2023

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

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

Pioneer Power Solutions, Inc. and its wholly owned subsidiaries (referred to herein as the “Company,” “Pioneer,” “we,” “our” and “us”) design, manufacture, integrate, refurbish, service, distribute and sell electric power systems, distributed energy resources, power generation equipment and 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, electric, gas and water utilities, data center developers and owners, EV charging infrastructure developers and owners, and distributed energy developers. The Company is headquartered in Fort Lee, New Jersey and operates from three (3) additional locations in the U.S. for manufacturing, service and maintenance, engineering, sales and administration.

We have two reportable segments as defined in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on April 11, 2023: Transmission and Distribution Solutions (“T&D Solutions”) and Critical Power Solutions (“Critical Power”).

Presentation

The accompanying unaudited interim consolidated financial statements of the Company have been prepared pursuant to the rules of the SEC and reflect the accounts of the Company as of June 30, 2023. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), have been condensed or omitted pursuant to those rules and regulations. We believe 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 financial statements but does not include all disclosures required by U.S. GAAP for a year-end balance sheet.

All dollar amounts (except share and per share data) presented in the notes to our unaudited interim consolidated financial statements are stated in thousands of dollars, unless otherwise noted. Amounts may not foot due to rounding. 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. We have used a discrete-period computation method to calculate taxes for the fiscal three and six-month period ended June 30, 2023. The Company anticipates that its annual effective tax rate will be 0% for the year ending December 31, 2023. As of June 30, 2023, the Company continues to provide a 100% valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized.

These unaudited interim consolidated financial statements include the accounts of Pioneer and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

These unaudited interim consolidated financial statements should be read in conjunction with the risk factors under the heading “Part II - Item 1A. Risk Factors” and the risk factors and the audited consolidated financial statements and notes thereto of the Company and its subsidiaries included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Liquidity

The accompanying financial statements have been prepared on a basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, as of June 30, 2023, the Company had $9,624 of cash on hand and working capital of $14,363. The cash on hand was generated primarily from the sale of common stock under the ATM Program (as defined below) during the year ended December 31, 2021 and payment of all unpaid principal and interest from the two subordinated promissory notes we received in connection with the sale of the transformer business units in August 2019 for an aggregate principal amount of $7,500 (the “Seller Notes”) during the year ended December 31, 2022.

We have met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the Equity Transaction, proceeds from the sale of the CleanSpark common stock and warrants to purchase CleanSpark common stock, sale of common stock under the ATM Program, funding from the Payroll Protection Program and collecting all unpaid principal and interest from the Seller Notes. Our cash requirements historically 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 our operating activities. We expect our 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.

On December 13, 2021, we filed a prospectus supplement, which forms a part of our registration statement on Form S-3 (File No. 333-249569), that was declared effective by the SEC on October 27, 2020, in connection with the offer and sale of up to an aggregate offering amount of $8,600 of common stock that may be issued and sold under the ATM Program. We did not sell any shares of common stock under the ATM Program during the six months ended June 30, 2023. As of June 30, 2023, $8,600 of common stock remained available for issuance under the ATM Program.

Risks and Uncertainties

The World Health Organization determined that COVID-19 no longer fit the definition of a public health emergency and the U.S. government announced that the declaration of a public health emergency associated with COVID-19 expired on May 11, 2023. However, COVID-19 has remained and is expected to continue to remain as a serious endemic threat for an indefinite future period and may continue to adversely affect the global economy. The continuing impacts of the COVID-19 endemic, as well as rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments (including the war in Ukraine) 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. 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 continuing impacts of the COVID-19 endemic and the extent of geopolitical disruption and their respective impacts 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. During the six months ended June 30, 2023, the Company was able to operate substantially at capacity.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes in the Company’s accounting policies during the second quarter of 2023.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements not yet adopted by the Company which would have a material impact on the Company’s financial statements.

Accounting Standards Update (“ASU”) 2023-03, “Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 Emerging Issues Task Force (“EITF”) Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X: Income or Loss Applicable to Common Stock.” ASU 2023-03 amends the ASC for SEC updates pursuant to SEC Staff Accounting Bulletin No. 120; SEC Staff Announcement at the March 24, 2022 EITF Meeting; and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X: Income or Loss Applicable to Common Stock. These updates were immediately effective and did not have a significant impact on our financial statements.

Accounts Receivable

On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” using a modified retrospective approach. The standard amends several aspects of the measurement of credit losses related to certain financial instruments, including the replacement of the existing incurred credit loss model and other models with the current expected credit losses model. The cumulative effect of adoption did not result in an adjustment to the allowance for credit loss, and accordingly, the Company’s accumulated deficit as of January 1, 2023.

The Company accounts for trade receivables at original invoice amount less an estimate made for expected credit losses. The Company’s allowance for expected credit losses on accounts receivable reflects management’s estimate of credit losses over the remaining expected life of such assets, measured primarily using historical experience, as well as current conditions and forecasts that affect the collectability of the reported amount. There were no allowances for expected credit losses as of June 30, 2023 and December 31, 2022.

3. REVENUES

Nature of our products and services

Our principal products and services include electric power systems, distributed energy resources, power generation equipment and mobile EV charging solutions.

Products

Our T&D Solutions business provides electric power systems and distributed energy resources that help customers effectively and efficiently protect, control, transfer, monitor and manage their electric energy requirements.

Our Critical Power business provides customers with our suite of mobile e-Boost electric vehicle charging solutions and power generation equipment.

Services

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.

Our principal source of revenue is derived from sales of products and fees for services. We measure revenue based upon the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Customers typically receive the benefit of our products when the risk of loss or control for the product transfers to the customer and for services as they are performed. Under ASC 606, revenue is recognized when a customer obtains control of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or services.

During the three months ended June 30, 2023, the Company recognized $2,467 of revenue over time and incurred costs of $2,103. During the three months ended June 30, 2022, the Company recognized $574 of revenue over time and incurred costs of $592. Additionally, the Company recognized $7,773 and $2,432 of revenue at a point in time from the sale of our products during the three months ended June 30, 2023 and 2022, respectively.

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 $1,890 and $1,857 of service revenue during the three months ended June 30, 2023 and 2022, respectively.

During the six months ended June 30, 2023, the Company recognized $3,128 of revenue over time and incurred costs of $2,652. During the six months ended June 30, 2022, the Company recognized $900 of revenue over time and incurred costs of $870. Additionally, the Company recognized $13,558 and $6,934 of revenue at a point in time from the sale of our products during the six months ended June 30, 2023 and 2022, respectively.

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 $3,952 and $3,391 of service revenue during the six months ended June 30, 2023 and 2022, respectively.

During the three months ended June 30, 2023, the Company recognized approximately $3,285 of revenue that was recognized as deferred revenue at December 31, 2022, as compared to $214 of revenue during the three months ended June 30, 2022 that was recognized as deferred revenue at December 31, 2021.

During the six months ended June 30, 2023, the Company recognized approximately $7,794 of revenue that was recognized as deferred revenue at December 31, 2022, as compared to $2,056 of revenue during the six months ended June 30, 2022 that was recognized as deferred revenue at December 31, 2021.

The Company manages its accounts receivable credit risk by performing credit evaluations and monitoring amounts due from the Company’s customers. The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable.

As of June 30, 2023, two customers represented approximately 60% and 16% of the Company’s accounts receivable. At December 31, 2022, three customers represented approximately 57%, 13% and 11% of the Company’s accounts receivable.

For the three months ended June 30, 2023, one customer represented approximately 63% of the Company’s revenue. For the three months ended June 30, 2022, two customers represented approximately 35% and 11% of the Company’s revenue.

For the six months ended June 30, 2023, two customers represented approximately 57% and 10% of the Company’s revenue. For the six months ended June 30, 2022, three customers represented approximately 18%, 16% and 13% of the Company’s revenue.

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 six months ended June 30, 2023 and 2022 were insignificant.

The following table presents our revenues disaggregated by revenue discipline:

SCHEDULE OF REVENUE DISAGGREGATED

	2023		2022 (Revised)		2023		2022 (Revised)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Products	$	10,240	$	3,006	$	16,686	$	7,834
Services		1,890		1,857		3,952		3,391
Total revenue	$	12,130	$	4,863	$	20,638	$	11,225

See “Note 10 - Business Segment and Geographic Information”.

4. REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

In connection with the preparation of our consolidated interim financial statements for the quarter ended September 30, 2022, we completed an analysis of one of our customer contracts under ASC 606 and, as a result, we determined that the performance obligations are satisfied over time. See “Note 3 – Revenues in Notes to Consolidated Financial Statements” in Part I of this Quarterly Report on Form 10-Q. As a result of the analysis, we identified additional revenues to be recognized of $574 and $900 related to the three and six months ended June 30, 2022, respectively, along with the additional related cost of revenues of $592 and $870, respectively.

The following tables reconcile the balances as previously reported in the Quarterly Reports on Form 10-Q as of and for the three and six months ended June 30, 2022 to the as revised balances:

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
	For The Three Months Ended
	June 30, 2022
Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
Revenues	$	4,289		$	574		$	4,863
Cost of goods sold	$	4,208		$	592		$	4,800
Gross profit	$	81		$	(18	)	$	63
Net loss	$	(2,517	)	$	(18	)	$	(2,535	)
Loss per share - basic and diluted	$	(0.26	)		-		$	(0.26	)
Weighted average common shares outstanding - basic and diluted		9,728			-			9,728

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
	For The Six Months Ended
	June 30, 2022
Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
Revenues	$	10,325		$	900	$	11,225
Cost of goods sold	$	9,369		$	870	$	10,239
Gross profit	$	956		$	30	$	986
Net loss	$	(3,305	)	$	30	$	(3,275	)
Loss per share - basic and diluted	$	(0.34	)		-	$	(0.34	)
Weighted average common shares outstanding - basic and diluted		9,685			-		9,685

Condensed Consolidated Balance Sheet (Unaudited)	As Reported		Adjustment			As Revised
	June 30, 2022
Condensed Consolidated Balance Sheet (Unaudited)	As Reported		Adjustment			As Revised
Total current assets	$	31,080	$	(870	)	$	30,210
Total assets	$	34,116	$	(870	)	$	33,246
Total current liabilities	$	15,696	$	(900	)	$	14,796
Total liabilities	$	17,136	$	(900	)	$	16,236
Total stockholders’ equity	$	16,980	$	30		$	17,010

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
	For The Six Months Ended
	June 30, 2022
Cash Flows From Operating Activities (Unaudited)	As Reported			Adjustment			As Revised
Net loss	$	(3,305	)	$	30		$	(3,275	)
Changes in current operating assets and liabilities:
Inventories	$	(4,857	)	$	870		$	(3,987	)
Deferred revenue	$	6,866		$	(900	)	$	5,966
Net cash used in operating activities	$	(1,621	)	$	-		$	(1,621	)

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
	For The Six Months Ended
	June 30, 2022
Consolidated Statement of Stockholders’ Equity (Unaudited)	As Reported			Adjustment		As Revised
Accumulated deficit	$	(15,617	)	$	30	$	(15,587	)
Total stockholders’ equity	$	16,980		$	30	$	17,010

In accordance with SEC Staff Accounting Bulletin No. 108, we evaluated this revision based on an analysis of quantitative and qualitative factors as to whether it was material to the consolidated statements of operations for the three and six months ended June 30, 2022 and if amendments of previously filed financial statements with the SEC are required. We determined that the adjustment is neither quantitatively nor qualitatively material and, therefore, the revision does not have a material impact to the consolidated statements of operations for the three and six months ended June 30, 2022 or other prior periods.

5. INVENTORIES

The components of inventories are summarized below:

SCHEDULE OF INVENTORIES

	June 30,		December 31,
	2023		2022
Raw materials	$	5,705	$	2,962
Work in process		2,752		5,786
Total inventories	$	8,457	$	8,748

Inventories are stated at the lower of cost or a net realizable value determined on a weighted average method.

6. PROPERTY AND EQUIPMENT, NET

Property and equipment are summarized below:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30,			December 31,
	2023			2022
Machinery, vehicles and equipment	$	2,765		$	2,308
Furniture and fixtures		208			208
Computer hardware and software		612			591
Leasehold improvements		368			368
Construction in progress		831			499
		4,784			3,974
Less: accumulated depreciation		(2,401	)		(2,174	)
Total property and equipment, net	$	2,383		$	1,800

Depreciation expense was $97 and $37 for the three months ended June 30, 2023 and 2022, respectively.

Depreciation expense was $227 and $73 for the six months ended June 30, 2023 and 2022, respectively.

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities are summarized below:

	June 30,		December 31,
	2023		2022
Accounts payable	$	5,542	$	5,615
Accrued liabilities		1,249		1,624
Total accounts payable and accrued liabilities	$	6,791	$	7,239

Accrued liabilities primarily consist of accrued sales commissions, accrued compensation and benefits, accrued sales and use taxes and accrued insurance. At June 30, 2023 and December 31, 2022, accrued sales commissions were $250 and $278, respectively. Accrued compensation and benefits at June 30, 2023 and December 31, 2022 were $345 and $213, respectively. Accrued sales and use taxes at June 30, 2023 and December 31, 2022 were $108 and $258, respectively, and there was $157 of accrued insurance at June 30, 2023 as compared to $559 at December 31, 2022. The remainder of accrued liabilities are comprised of several insignificant accruals in connection with normal business operations.

At June 30, 2023, one supplier represented approximately 15% of the Company’s accounts payable. At December 31, 2022, none of the Company’s suppliers represented more than 10% of the Company’s accounts payable.

8. STOCK-BASED COMPENSATION

Stock-Based Compensation

A summary of stock option activity during the six months ended June 30, 2023 is as follows:

SCHEDULE OF STOCK OPTION ACTIVITY

	Stock Options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
Outstanding as of January 1, 2023		670,667		$	5.45
Granted		77,500			5.52
Exercised		-			-
Forfeited		(35,000	)		5.60
Outstanding as of June 30, 2023		713,167		$	5.45		5.90	$	2,216
Exercisable as of June 30, 2023		638,167		$	5.45		5.50	$	1,995

A summary of RSU activity during the six months ended June 30, 2023 is as follows:

SUMMARY OF RESTRICTED STOCK ACTIVITY

	Number of units			Weighted-average grant-date fair value per share		Weighted-average grant-date fair value
Unvested restricted stock units as of January 1, 2023		250,000		$	4.35	$	1,087
Units granted		100,000			5.75		575
Units vested		(225,000	)		4.97		(1,118	)
Units forfeited		-			-		-
Unvested restricted stock units as of June 30, 2023		125,000		$	4.35	$	544

Stock-based compensation expense recorded for the three and six months ended June 30, 2023 was approximately $819 and $962, respectively. Stock-based compensation expense recorded for the three and six months ended June 30, 2022 was approximately $659 and $716, respectively. At June 30, 2023, there was $719 of stock-based compensation expense remaining to be recognized in the consolidated statements of operations over a weighted average remaining period of 0.9 years.

9. BASIC AND DILUTED LOSS PER COMMON SHARE

Basic and diluted loss per common share is calculated based on the weighted average number of vested shares outstanding during the period. The Company’s employee and director equity awards, as well as incremental shares issuable upon exercise of warrants, are not considered in the calculations if the effect would be anti-dilutive.

As of June 30, 2023 and 2022, diluted loss per share excludes potentially dilutive common shares related to 713,167 and 670,667 shares underlying stock options, respectively, and 125,000 and 250,000 shares underlying nonvested RSUs, respectively, as their effect was anti-dilutive.

10. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

The Company follows ASC 280 - Segment Reporting in determining its reportable segments. The Company considered the way its management team, most notably its chief operating decision maker, makes operating decisions and assesses performance and considered which components of the Company’s enterprise have discrete financial information available. As the Company makes decisions using a manufactured products vs. distributed products and services group focus, its analysis resulted in two reportable segments: T&D Solutions and Critical Power. The Critical Power reportable segment is the Company’s Titan Energy Systems, Inc. business unit. The T&D Solutions reportable segment is the Company’s Pioneer Custom Electrical Products Corp. business unit.

The T&D Solutions segment is involved in the design, manufacture and sale of circuit protection and controls equipment used primarily by large industrial and commercial operations to manage their electrical power distribution needs. The Critical Power segment provides mobile high capacity charging equipment, power generation equipment and aftermarket field-services in order to help customers secure fast vehicle charging where fixed charging infrastructure does not exist, and additionally to ensure smooth, uninterrupted power to operations during times of emergency.

The following tables present information about segment income and loss:

SCHEDULE OF SEGMENT INCOME AND LOSS

	2023		2022 (Revised)		2023		2022 (Revised)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Revenues
T&D Solutions
Power Systems	$	9,224	$	2,543	$	14,985	$	6,256
Service		-		-		-		10
		9,224		2,543		14,985		6,266
Critical Power Solutions
Equipment		1,016		463		1,701		1,578
Service		1,890		1,857		3,952		3,381
		2,906		2,320		5,653		4,959
Consolidated	$	12,130	$	4,863	$	20,638	$	11,225

	2023		2022		2023		2022
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Depreciation and amortization
T&D Solutions	$	17	$	11	$	33	$	21
Critical Power Solutions		209		92		395		162
Unallocated corporate overhead expenses		2		7		4		14
Consolidated	$	228	$	110	$	432	$	197

	2023			2022 (Revised)			2023			2022 (Revised)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022 (Revised)			2023			2022 (Revised)
Operating income (loss)
T&D Solutions	$	1,808		$	(442	)	$	3,050		$	(353	)
Critical Power Solutions		(506	)		(757	)		(943	)		(911	)
Unallocated corporate overhead expenses		(1,680	)		(1,323	)		(2,429	)		(2,081	)
Consolidated	$	(378	)	$	(2,522	)	$	(322	)	$	(3,345	)

Revenues are attributable to countries based on the location of the Company’s customers:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Revenues
United States	$	12,130	$	4,863	$	20,638	$	11,225

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying consolidated interim financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission on April 11, 2023.

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “Pioneer,” “we,” “our” and “us” refer to Pioneer Power Solutions, Inc. and its subsidiaries.

U.S. dollars are reported in thousands except for share and per share amounts.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements,” which include information relating to future events, future financial performance, financial projections, strategies, expectations, competitive environment and regulation. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

	●	General economic conditions and their effect on demand for electrical equipment, particularly in the commercial construction market, but also in the power generation, industrial production, data center, oil and gas, marine and infrastructure industries.

	●	The effects of fluctuations in sales on our business, revenues, expenses, net income (loss), income (loss) per share, margins and profitability.

	●	Many of our competitors are better established and have significantly greater resources and may subsidize their competitive offerings with other products and services, which may make it difficult for us to attract and retain customers.

	●	The potential loss or departure of key personnel, including Nathan J. Mazurek, our chairman, president and chief executive officer.

	●	Our ability to generate internal growth, maintain market acceptance of our existing products and gain acceptance for our new products.

	●	Unanticipated increases in raw material prices or disruptions in supply could increase production costs and adversely affect our profitability.

	●	Our ability to realize revenue reported in our backlog.

	●	Operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, material, labor or overhead cost increases, interest rate risk and commodity risk.

	●	Strikes or labor disputes with our employees may adversely affect our ability to conduct our business.

	●	The impact of geopolitical activity on the economy, changes in government regulations such as income taxes, climate control initiatives, the timing or strength of an economic recovery in our markets and our ability to access capital markets.

	●	Material weaknesses in internal controls.

	●	Future sales of large blocks of our common stock may adversely impact our stock price.

	●	The liquidity and trading volume of our common stock.

	●	Our business could be adversely affected by an outbreak of disease, epidemic or pandemic, such as the global coronavirus pandemic, or similar public threat, or fear of such an event.

	●	Risks associated with litigation and claims, which could impact our financial results and condition.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. Moreover, new risks regularly emerge, and it is not possible for us to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should review carefully the risks and uncertainties described under the heading “Part II - Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q and “Part I - Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of the foregoing and other risks that relate to our business and investing in shares of our common stock.

Business Overview

We design, manufacture, integrate, refurbish, service, distribute and sell electric power systems, distributed energy resources, power generation equipment and 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, electric, gas and water utilities, data center developers and owners, EV charging infrastructure developers and owners, and distributed energy developers. We are headquartered in Fort Lee, New Jersey and operate from three (3) additional locations in the U.S. for manufacturing, service and maintenance, engineering, and sales and administration.

Description of Business Segments

We have two reportable segments: Transmission & Distribution Solutions (“T&D Solutions”) and Critical Power Solutions (“Critical Power”).

	●	Our T&D Solutions business provides equipment solutions that help customers effectively and efficiently protect, control, transfer, monitor and manage their electric energy requirements. These solutions are marketed principally through our Pioneer Custom Electrical Products Corp. (“PCEP”) brand name.

	●	Our Critical Power business provides customers with our suite of mobile e-Boost© EV charging solutions, power generation equipment and all forms of service and maintenance on our customers’ power generation equipment. These products and services are marketed by our operations headquartered in Minnesota, currently doing business under both the Titan Energy Systems Inc. (“Titan”) and Pioneer Critical Power brand names.

Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with U.S. GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the amounts and disclosures in the financial statements. Our estimates are based on our historical experience, knowledge of current events and actions we may undertake in the future, and on various other factors that we believe are reasonable under the circumstances. Our critical accounting policies and estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in our Annual Report on Form 10-K filed with the SEC on April 11, 2023. There were no material changes to our accounting policies during the six months ended June 30, 2023.

RESULTS OF OPERATIONS

Overview of the Three and Six Months Results

Selected financial and operating data for our reportable business segments for the most recent reporting period is summarized below. This information, as well as the selected financial data provided in “Note 10 - Business Segment and Geographic Information” and in our unaudited Consolidated Financial Statements and related notes included in this Quarterly Report on Form 10-Q, should be referred to when reading our discussion and analysis of results of operations below.

Our summary of operating results during the three and six months ended June 30, 2023 and 2022 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022 (Revised)			2023			2022 (Revised)
Revenues
T&D Solutions	$	9,224		$	2,543		$	14,985		$	6,266
Critical Power Solutions		2,906			2,320			5,653			4,959
Consolidated		12,130			4,863			20,638			11,225
Cost of goods sold
T&D Solutions		6,999			2,722			11,238			6,021
Critical Power Solutions		2,420			2,078			4,476			4,218
Consolidated		9,419			4,800			15,714			10,239
Gross profit		2,711			63			4,924			986
Selling, general and administrative expenses		3,059			2,557			5,090			4,277
Depreciation and amortization expense		30			28			156			54
Total operating expenses		3,089			2,585			5,246			4,331
Operating loss from continuing operations		(378	)		(2,522	)		(322	)		(3,345	)
Interest income		(79	)		(104	)		(132	)		(206	)
Other expense		20			117			7			129
Loss before income taxes		(319	)		(2,535	)		(197	)		(3,268	)
Income tax expense		-			-			-			7
Net loss	$	(319	)	$	(2,535	)	$	(197	)	$	(3,275	)

Backlog

Our backlog is based on firm orders from our customers expected to be delivered in the future, most of which is expected to occur during the next twelve months. Backlog may vary significantly from reporting period to reporting period due to the timing of customer commitments. Backlog reflects the amount of revenue we expect to realize upon the shipment of customer orders for our products that are not yet complete or for which work has not yet begun. At June 30, 2023, backlog from our E-Bloc power systems solutions was approximately $15,300, or 46% of the total backlog.

The following table represents the progression of our backlog, by reporting segment, as of the end of the last five quarters:

	June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022 (Revised)
T&D Solutions	$	26,425	$	29,198	$	30,871	$	22,689	$	19,118
Critical Power Solutions		7,146		7,845		6,284		5,207		5,141
Total order backlog	$	33,571	$	37,043	$	37,155	$	27,896	$	24,259

Revenue

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

	Three Months Ended June 30,								Six Months Ended June 30,
	2023		2022 (Revised)		Variance		%		2023		2022 (Revised)		Variance			%
T&D Solutions
Power Systems	$	9,224	$	2,543	$	6,681		262.7	$	14,985	$	6,256	$	8,729			139.5
Service		-		-		-		-		-		10		(10	)		(100.0	)
		9,224		2,543		6,681		262.7		14,985		6,266		8,719			139.1
Critical Power Solutions
Equipment		1,016		463		553		119.4		1,701		1,578		123			7.8
Service		1,890		1,857		33		1.8		3,952		3,381		571			16.9
		2,906		2,320		586		25.2		5,653		4,959		694			14.0
Total revenue	$	12,130	$	4,863	$	7,267		149.4	$	20,638	$	11,225	$	9,413			83.9

For the three months ended June 30, 2023, our consolidated revenue increased by $7,267, or 149.4%, to $12,130, up from $4,863 during the three months ended June 30, 2022, primarily due to an increase in sales of our power systems from our T&D Solutions segment and an increase in sales of our equipment from our Critical Power Solutions segment.

For the six months ended June 30, 2023, our consolidated revenue increased by $9,413, or 83.9%, to $20,638, up from $11,225 during the three months ended June 30, 2022, primarily due to an increase in sales of our power systems from our T&D Solutions segment and an increase in service sales from our Critical Power Solutions segment.

T&D Solutions. During the three months ended June 30, 2023, revenue from our power systems product lines increased by $6,681, or 262.7%, as compared to the three months ended June 30, 2022, primarily due to increased sales of our E-Bloc power systems and automatic transfer switches, in addition to an increase in sales of our medium and low voltage power systems.

During the six months ended June 30, 2023, revenue from our power systems product lines increased by $8,719, or 139.1%, as compared to the six months ended June 30, 2022, primarily due to increased sales of our E-Bloc power systems and automatic transfer switches, in addition to an increase in sales of our medium and low voltage power systems.

Critical Power. For the three months ended June 30, 2023, revenue for our Critical Power segment increased by $586, or 25.2%, as compared to the three months ended June 30, 2022, primarily due to an increase in sales of our new and refurbished generation equipment.

For the six months ended June 30, 2023, revenue for our Critical Power segment increased by $694, or 14.0%, as compared to the six months ended June 30, 2022, primarily due to an increase in sales of our new and refurbished generation equipment and the cyclicality of our preventative maintenance schedules.

Gross Profit (Loss) and Margin

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

	Three Months Ended										Six Months Ended
	June 30,										June 30,
	2023		2022 (Revised)			Variance		%			2023		2022 (Revised)		Variance		%
T&D Solutions
Gross profit (loss)	$	2,225	$	(179	)	$	2,404		(1,343.0	)	$	3,747	$	245	$	3,502		1,429.4
Gross margin %		24.1		(7.0	)		31.1					25.0		3.9		21.1

Critical Power Solutions
Gross profit		486		242			244		100.8			1,177		741		436		58.8
Gross margin %		16.7		10.4			6.3					20.8		14.9		5.9

Consolidated gross profit	$	2,711	$	63		$	2,648		4,203.2		$	4,924	$	986	$	3,938		399.4
Consolidated gross margin %		22.3		1.3			21.0					23.9		8.8		15.1

For the three months ended June 30, 2023, our consolidated gross margin increased to 22.3% of revenues, as compared to 1.3% during the three months ended June 30, 2022.

For the six months ended June 30, 2023, our consolidated gross margin increased to 23.9% of revenues, as compared to 8.8% during the three months ended June 30, 2022.

T&D Solutions. For the three months ended June 30, 2023, our gross margin percentage increased by 31.1%, from (7.0)% to 24.1%, as compared to the three months ended June 30, 2022. The increase was primarily due to the significant increase in sales our E-Bloc solution and medium and low voltage power systems, a favorable sales mix and improved productivity from our manufacturing facility.

For the six months ended June 30, 2023, our gross margin percentage increased by 21.1%, from 3.9% to 25.0%, as compared to the six months ended June 30, 2022. The increase was also primarily due to the significant increase in sales our E-Bloc solution and medium and low voltage power systems, a favorable sales mix and improved productivity from our manufacturing facility.

Critical Power Solutions. For the three months ended June 30, 2023, our gross margin increased by 6.3%, to 16.7%, from 10.4% for the three months ended June 30, 2022. The increase was predominately due to a favorable sales mix and the acceptance of price increases from our customers.

For the six months ended June 30, 2023, our gross margin increased by 5.9%, to 20.8%, from 14.9% for the six months ended June 30, 2022. The increase was also predominately due to a favorable sales mix and the acceptance of price increases from our customers.

Operating Expenses

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

	Three Months Ended										Six Months Ended
	June 30,										June 30,
	2023		2022 (Revised)		Variance			%			2023		2022 (Revised)		Variance			%
T&D Solutions
Selling, general and administrative expense	$	408	$	261	$	147			56.3		$	680	$	595	$	85			14.3
Depreciation and amortization expense		9		2		7			350.0			17		3		14			466.7
Segment operating expense	$	417	$	263	$	154			58.6		$	697	$	598	$	99			16.6

Critical Power Solutions
Selling, general and administrative expense	$	973	$	980	$	(7	)		(0.7	)	$	1,985	$	1,615	$	370			22.9
Depreciation and amortization expense		19		19		-			-			135		37		98			264.9
Segment operating expense	$	992	$	999	$	(7	)		(0.7	)	$	2,120	$	1,652	$	468			28.3

Unallocated Corporate Overhead Expenses
Selling, general and administrative expense	$	1,678	$	1,316	$	362			27.5		$	2,425	$	2,067	$	358			17.3
Depreciation and amortization expense		2		7		(5	)		(71.4	)		4		14		(10	)		(71.4	)
Segment operating expense	$	1,680	$	1,323	$	357			27.0		$	2,429	$	2,081	$	348			16.7

Consolidated
Selling, general and administrative expense	$	3,059	$	2,557	$	502			19.6		$	5,090	$	4,277	$	813			19.0
Depreciation and amortization expense		30		28		2			7.1			156		54		102			188.9
Consolidated operating expense	$	3,089	$	2,585	$	504			19.5		$	5,246	$	4,331	$	915			21.1

Selling, General and Administrative Expense. For the three months ended June 30, 2023, consolidated selling, general and administrative expense, before depreciation and amortization, increased by approximately $502, or 19.6%, to $3,059, due to an increase in payroll related costs, including stock-based compensation, professional fees and product development costs related to our e-Boost initiative, as compared to $2,557 during the three months ended June 30, 2022. As a percentage of our consolidated revenue, selling, general and administrative expense, before depreciation and amortization, decreased to 25.2% during the three months ended June 30, 2023, as compared to 52.6% in the three months ended June 30, 2022.

For the six months ended June 30, 2023, consolidated selling, general and administrative expense, before depreciation and amortization, increased by approximately $813, or 19.0%, to $5,090, due to an increase in payroll related costs, including stock-based compensation, professional fees and product development costs related to our e-Boost initiative, as compared to $4,277 during the six months ended June 30, 2022. As a percentage of our consolidated revenue, selling, general and administrative expense, before depreciation and amortization, decreased to 24.7% during the six months ended June 30, 2023, as compared to 38.1% during the six months ended June 30, 2022.

Depreciation and Amortization Expense. Depreciation and amortization expense consists primarily of depreciation of fixed assets and amortization of right-of-use assets related to our finance leases and excludes amounts included in cost of sales. For the three months ended June 30, 2023, consolidated depreciation and amortization expense increased by $2, or 7.1%, as compared to the three months ended June 30, 2022.

For the six months ended June 30, 2023, consolidated depreciation and amortization expense increased by $102, or 188.9%, as compared to the six months ended June 30, 2022, primarily due to an increase in depreciation as a result of placing certain e-Boost assets into service.

Loss From Operations

The following table represents our operating income (loss) by reportable segment for the periods indicated (in thousands, except percentages):

	Three Months Ended												Six Months Ended
	June 30,												June 30,
	2023			2022 (Revised)			Variance			%			2023			2022 (Revised)			Variance			%
T&D Solutions	$	1,808		$	(442	)	$	2,250			509.0		$	3,050		$	(353	)	$	3,403			964.0
Critical Power Solutions		(506	)		(757	)		251			33.2			(943	)		(911	)		(32	)		(3.5	)
Unallocated corporate overhead expenses		(1,680	)		(1,323	)		(357	)		(27.0	)		(2,429	)		(2,081	)		(348	)		(16.7	)
Loss from operations	$	(378	)	$	(2,522	)	$	2,144			(85.0	)	$	(322	)	$	(3,345	)	$	3,023			90.4

T&D Solutions. Operating income from our T&D Solutions segment increased by $2,250, or 509.0%, during the three months ended June 30, 2023, as compared to the three months ended June 30, 2022, primarily due to the significant increase in sales our E-Bloc solution and medium and low voltage power systems, a favorable sales mix and improved productivity from our manufacturing facility during the three months ended June 30, 2023.

Operating income from our T&D Solutions segment increased by $3,403, or 964.0%, during the six months ended June 30, 2023, as compared to the six months ended June 30, 2022, primarily due an increase in sales of our power systems equipment, a favorable sales mix and improved productivity from our manufacturing facility the six months ended June 30, 2023.

Critical Power Solutions. Operating loss for the Critical Power segment decreased by $251, or 33.2% during the three months ended June 30, 2023, primarily due to a favorable sales mix and the acceptance of price increases from our customers during the three months ended June 30, 2023.

Operating loss for the Critical Power segment increased by $32, or 3.5% during the six months ended June 30, 2023, as compared to the six months ended June 30, 2022, primarily due to an increase in payroll related costs in addition to professional fees and depreciation expense related to our e-Boost initiative.

General Corporate Expense. Our general corporate expenses consist primarily of executive management, corporate accounting and human resources personnel, corporate office expenses, financing and corporate development activities, payroll and benefits administration, treasury, tax compliance, legal, stock-based compensation, public reporting costs and costs not specifically allocated to reportable business segments.

During the three months ended June 30, 2023, our unallocated corporate overhead expense increased by $357, or 27.0%, as compared to the three months ended June 30, 2022, primarily due to an increase in payroll related costs, including stock-based compensation, and professional fees.

During the three six ended June 30, 2023, our unallocated corporate overhead expense increased by $348, or 16.7%, as compared to the six months ended June 30, 2022, primarily due to an increase in payroll related costs, including stock-based compensation, and professional fees.

Non-Operating (Income) Expense

Interest Income. For the three and six months ended June 30, 2023, we had interest income of approximately $79 and $132, respectively, as compared to interest income of approximately $104 and $206, respectively, during the three and six months ended June 30, 2022. We generated the majority of our interest income from our cash on hand. During the six months ended June 30, 2022, we generated the majority of our interest income from the Seller Notes we received from the sale of the transformer business units and our cash on hand.

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

For the three and six months ended June 30, 2023, other non-operating expense was $20 and $7, respectively, as compared to other non-operating expense of $117 and $129, respectively, during the three and six months ended June 30, 2022.

Provision for Income Taxes. Our effective income tax rate for the three months ended June 30, 2023 and 2022 was 0.0%.

Our provision reflects an effective tax rate on income before taxes of 0.0% for the six months ended June 30, 2023, as compared to (0.2)% for the six months ended June 30, 2022, as set forth below:

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2023			2022 (Revised)			Variance		2023			2022 (Revised)			Variance
Loss before income taxes	$	(319	)	$	(2,535	)	$	2,216	$	(197	)	$	(3,268	)	$	3,071
Income tax expense		-			-			-		-			7			(7	)
Effective income tax rate %		-			-			-		-			(0.2	)		0.2

Net Loss per Share

We generated a net loss of $319 during the three months ended June 30, 2023, as compared to a net loss of $2,535 during the three months ended June 30, 2022.

Our net loss per basic and diluted share for the three months ended June 30, 2023 was $0.03, as compared to a net loss per basic and diluted share of $0.26 for the three months ended June 30, 2022.

We generated a net loss of $197 during the six months ended June 30, 2023, as compared to a net loss of $3,268 during the six months ended June 30, 2022.

Our net loss per basic and diluted share for the six months ended June 30, 2023 was $0.02, as compared to a net loss per basic and diluted share of $0.34 for the six months ended June 30, 2022.

LIQUIDITY AND CAPITAL RESOURCES

General. On October 20, 2020, we entered into an At the Market Sale Agreement with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which we may offer and sell our shares of common stock, preferred stock, warrants and/or units of up to $25,000 from time to time through Wainwright, acting as sales agent or principal (the “ATM Program”). As of June 30, 2023, we had $9,624 of cash on hand generated primarily from the sale of common stock under the ATM Program during the year ended December 31, 2021, payment of all unpaid principal and interest from the Seller Notes during the year ended December 31, 2022 and cash flows from operating activities. We have met our cash needs through a combination of cash flows from operating activities and bank borrowings, proceeds from the sale of the CleanSpark Common Stock and warrants to purchase CleanSpark Common Stock, the sale of common stock under the ATM Program, funding from the Payroll Protection Program and collecting all unpaid principal and interest from the Seller Notes. Our cash requirements historically were generally for operating activities, capital improvements and acquisitions.

On December 13, 2021, we filed a prospectus supplement, which forms a part of our registration statement on Form S-3 (File No. 333-249569), that was declared effective by the SEC on October 27, 2020, in connection with the offer and sale of up to an aggregate offering amount of $8,600 of common stock that may be issued and sold under the ATM Program. We did not sell any shares of common stock under the ATM Program during the three and six months ended June 30, 2023. As of June 30, 2023, $8,600 of common stock remained available for issuance under the ATM Program.

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.

Cash Provided by / (Used in) Operating Activities. Cash provided by our operating activities was $366 during the six months ended June 30, 2023, as compared to cash used in operating activities of $1,621 during the six months ended June 30, 2022. The increase in cash provided by operating activities is primarily due to the decrease in our net loss and working capital fluctuations.

Cash Used in Investing Activities. Cash used in investing activities during the six months ended June 30, 2023 was $810, as compared to $174 during the six months ended June 30, 2022. Additions to property and equipment during the six months ended June 30, 2023 were $810, as compared to $174 of additions during the six months ended June 30, 2022.

Cash Used in Financing Activities. Cash used in our financing activities was $228 during the six months ended June 30, 2023, as compared to $119 during the six months ended June 30, 2022. The primary use of cash in financing activities for the six months ended June 30, 2023 and 2022 was repayments of financing leases.

Working Capital. As of June 30, 2023, we had working capital of $14,363, including $9,624 of cash on hand, compared to working capital of $14,074, including $10,296 of cash on hand at December 31, 2022.

Assessment of Liquidity. At June 30, 2023, we had $9,624 of cash on hand generated primarily from the sale of common stock under the ATM Program during the year ended December 31, 2021, payment of all unpaid principal and interest from the Seller Notes during the year ended December 31, 2022 and cash flows from operating activities. We have met our cash needs through a combination of cash flows from operating activities and bank borrowings, proceeds from the sale of the CleanSpark Common Stock and warrants to purchase CleanSpark Common Stock, sale of common stock under the ATM Program, funding from the Payroll Protection Program and collecting all unpaid principal and interest from the Seller Notes. Our cash requirements historically were generally for operating activities, capital improvements and acquisitions.

We expect to meet our cash needs with our working capital and cash flows from our operating activities. 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.

As of June 30, 2023, 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

The Company had $810 of additions to property and equipment during the six months ended June 30, 2023, as compared to $174 of additions to property and equipment during the six months ended June 30, 2022.

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. The continuing impacts of the COVID-19 endemic are currently indeterminable, and has affected and may continue to affect the global economy. In addition, the consequences of the ongoing conflict between Russia and Ukraine, 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. We predominately sell to customers in the industrial production and commercial construction 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 “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and “Part I - Item 1A. Risk Factors” in our Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2023. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Based on this evaluation, and as a result of the material weakness described below, our CEO and CFO have concluded that our disclosure controls and procedures were not effective as of June 30, 2023. In light of this determination, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weakness in our internal control over financial reporting, the unaudited interim condensed consolidated financial statements for the periods covered by and included in this Quarterly Report on Form 10-Q 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.

Material Weakness

As of December 31, 2022, we identified a material weakness in our internal control over financial reporting due to not having the appropriate controls in place over our revenue recognition process for nonroutine and complex revenue transactions in accordance with ASC 606, “Revenue from Contracts with Customers”, which continued to exist as of June 30, 2023.

In order to remediate this material weakness, management has expanded and improved our process for reviewing customer contracts and revenue recognition inputs, including through the engagement of third-party accounting professionals with expertise in evaluating customer contracts to obtain guidance on large and/or unique contracts in order to ensure that ASC 606 is accurately applied and documented.

Although we began implementing the enhancements described above at the end of 2022 and have been continuing our remediation efforts through June 30, 2023, the material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

Except as described above, there were no changes in our internal control over financial reporting during the three months ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in lawsuits, investigations and claims that arise in the ordinary course of business.

On June 15, 2023, two individuals (the “Plaintiffs”) filed a complaint in the U.S. District Court, District of Nebraska naming the Company, its wholly-owned subsidiary, Titan Energy Systems, Inc., and an individual acting in his capacity as an employee of the Company, collectively as defendants. Plaintiffs filed an amended complaint on July 7, 2023 alleging negligent driving, negligent entrustment, and negligent hiring, training and supervision, as a result of a car accident that occurred on September 9, 2019 involving the Plaintiffs and the individual. According to the amended complaint, the Plaintiffs are seeking special damages related to the injuries sustained by Plaintiffs. On July 27, 2023, the defendants filed an Answer to Plaintiff’s Amended Complaint. Initial Disclosures are due September 1, 2023 and mediation has been scheduled for October 4, 2023.

As of the date hereof, we are not aware of or a party to any other legal proceedings to which we or any of our subsidiaries 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 other 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.

ITEM 1A. RISK FACTORS

A description of the risks associated with our business, financial condition and results of operations is set forth in “Item 1A. Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on April 11, 2023, and are supplemented with the following revised risk factor:

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 are currently involved in a legal proceeding in which plaintiffs are alleging negligence claims and seeking special damages for personal injuries. See “Part II. Item 1 – Legal Proceedings.”

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

EXHIBIT INDEX

Exhibit No.		Description

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Furnished herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PIONEER POWER SOLUTIONS, INC.

Date: August 14, 2023	By:	/s/ Nathan J. Mazurek
	Name:	Nathan J. Mazurek
	Title:	Chief Executive Officer (Principal Executive Officer duly authorized to sign on behalf of Registrant)

Date: August 14, 2023

/s/ Walter Michalec

Name:

Walter Michalec

Title:

Chief Financial Officer

(Principal Financial Officer duly authorized to sign on behalf of Registrant)

EXHIBIT 31.1

CERTIFICATION

I, Nathan J. Mazurek, certify that:

	1.	I have reviewed this Quarterly Report on Form 10-Q of Pioneer Power Solutions, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and;

	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023

/s/ Nathan J. Mazurek

Nathan J. Mazurek

President, Chief Executive Officer and

Chairman of the Board of Directors (Principal Executive Officer duly authorized to sign on behalf of Registrant)

EXHIBIT 31.2

CERTIFICATION

I, Walter Michalec, certify that:

	1.	I have reviewed this Quarterly Report on Form 10-Q of Pioneer Power Solutions, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and;

	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023

/s/ Walter Michalec

Walter Michalec

Chief Financial Officer

(Principal Financial Officer duly authorized to sign on behalf of Registrant)

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and accompanies the Quarterly Report on Form 10-Q (the “Form 10-Q”) for the fiscal quarter ended June 30, 2023 of Pioneer Power Solutions, Inc. (the “Company”). I, Nathan J. Mazurek, the Chief Executive Officer of the Company, certify that, based on my knowledge:

	(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
	(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in this report.

Date: August 14, 2023	By:	/s/ Nathan J. Mazurek
	Name:	Nathan J. Mazurek
	Title:	Chief Executive Officer

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and accompanies the Quarterly Report on Form 10-Q (the “Form 10-Q”) for the fiscal quarter ended June 30, 2023 of Pioneer Power Solutions, Inc. (the “Company”). I, Walter Michalec, the Chief Financial Officer of the Company, certify that, based on my knowledge:

	(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
	(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in this report.

Date: August 14, 2023	By:	/s/ Walter Michalec
	Name:	Walter Michalec
	Title:	Chief Financial Officer

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 11, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-35212
Entity Registrant Name	PIONEER POWER SOLUTIONS, INC.
Entity Central Index Key	0001449792
Entity Tax Identification Number	27-1347616
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	400 Kelby Street
Entity Address, Address Line Two	12th Floor
Entity Address, City or Town	Fort Lee
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07024
City Area Code	212
Local Phone Number	867-0700
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PPSI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,009,545

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues	$ 12,130	$ 4,863	$ 20,638	$ 11,225
Cost of goods sold	9,419	4,800	15,714	10,239
Gross profit	2,711	63	4,924	986
Operating expenses
Selling, general and administrative	3,089	2,585	5,246	4,331
Total operating expenses	3,089	2,585	5,246	4,331
Loss from operations	(378)	(2,522)	(322)	(3,345)
Interest income	(79)	(104)	(132)	(206)
Other expense, net	20	117	7	129
Loss before income taxes	(319)	(2,535)	(197)	(3,268)
Income tax expense				7
Net loss	$ (319)	$ (2,535)	$ (197)	$ (3,275)
Loss per share:
Basic	$ (0.03)	$ (0.26)	$ (0.02)	$ (0.34)
Diluted	$ (0.03)	$ (0.26)	$ (0.02)	$ (0.34)
Weighted average common shares outstanding:
Basic	9,908,434	9,727,878	9,838,989	9,684,610
Diluted	9,908,434	9,727,878	9,838,989	9,684,610

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash	$ 9,624	$ 10,296
Accounts receivable, net	5,835	11,139
Inventories	8,457	8,748
Prepaid expenses and other current assets	2,625	2,853
Total current assets	26,541	33,036
Property and equipment, net	2,383	1,800
Operating lease right-of-use assets	1,110	1,450
Financing lease right-of-use assets	523	727
Other assets	138	162
Total assets	30,695	37,175
Current liabilities
Accounts payable and accrued liabilities	6,791	7,239
Current portion of operating lease liabilities	733	703
Current portion of financing lease liabilities	192	355
Deferred revenue	4,462	10,665
Total current liabilities	12,178	18,962
Operating lease liabilities, non-current portion	423	797
Financing lease liabilities, non-current portion	353	418
Other long-term liabilities	57	65
Total liabilities	13,011	20,242
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; 9,994,545 and 9,644,545 shares issued and outstanding on June 30, 2023 and December 31, 2022, respectively	10	10
Additional paid-in capital	33,821	32,859
Accumulated other comprehensive income		14
Accumulated deficit	(16,147)	(15,950)
Total stockholders’ equity	17,684	16,933
Total liabilities and stockholders’ equity	$ 30,695	$ 37,175

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	9,994,545	9,644,545
Common stock, shares outstanding	9,994,545	9,644,545

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating activities
Net loss	$ (197)	$ (3,275)
Adjustments to reconcile net loss to net cash provided by/ (used in) operating activities:
Depreciation	227	73
Amortization of right-of-use financing leases	205	124
Amortization of imputed interest		(214)
Amortization of right-of-use operating leases	340	328
Change in receivable reserves	44	(141)
Stock-based compensation	962	716
Other	(13)
Changes in current operating assets and liabilities:
Accounts receivable	5,283	(2,642)
Inventories	291	(3,987)
Prepaid expenses and other assets	224	(67)
Income taxes	(4)	27
Accounts payable and accrued liabilities	(449)	1,796
Deferred revenue	(6,204)	5,966
Operating lease liabilities	(343)	(325)
Net cash provided by/ (used in) operating activities	366	(1,621)
Investing activities
Purchases of property and equipment	(810)	(174)
Net cash used in investing activities	(810)	(174)
Financing activities
Net proceeds from the exercise of options for common stock		17
Principal repayments of financing leases	(228)	(136)
Net cash used in financing activities	(228)	(119)
Decrease in cash	(672)	(1,914)
Cash, beginning of period	10,296	11,699
Cash, end of period	9,624	9,785
Non-cash investing and financing activities:
Acquisition of right-of-use assets and lease liabilities		$ 551

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2021	$ 10	$ 31,840	$ 14	$ (12,312)	$ 19,552
Balance, shares at Dec. 31, 2021	9,640,545
Net loss				(3,275)	(3,275)
Stock-based compensation		716			716
Exercise of stock options		17			17
Exercise of stock options, shares	4,000
Balance at Jun. 30, 2022	$ 10	32,573	14	(15,587)	17,010
Balance, shares at Jun. 30, 2022	9,644,545
Balance at Mar. 31, 2022	$ 10	31,914	14	(13,052)	18,886
Balance, shares at Mar. 31, 2022	9,644,545
Net loss				(2,535)	(2,535)
Stock-based compensation		659			659
Balance at Jun. 30, 2022	$ 10	32,573	14	(15,587)	17,010
Balance, shares at Jun. 30, 2022	9,644,545
Balance at Dec. 31, 2022	$ 10	32,859	14	(15,950)	16,933
Balance, shares at Dec. 31, 2022	9,644,545
Net loss				(197)	(197)
Stock-based compensation		962			$ 962
Stock-based compensation, shares	350,000
Exercise of stock options, shares
Other			(14)		$ (14)
Balance at Jun. 30, 2023	$ 10	33,821		(16,147)	17,684
Balance, shares at Jun. 30, 2023	9,994,545
Balance at Mar. 31, 2023	$ 10	33,002		(15,828)	17,184
Balance, shares at Mar. 31, 2023	9,769,545
Net loss				(319)	(319)
Stock-based compensation		819			819
Stock-based compensation, shares	225,000
Balance at Jun. 30, 2023	$ 10	$ 33,821		$ (16,147)	$ 17,684
Balance, shares at Jun. 30, 2023	9,994,545

BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES

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

Presentation

Liquidity

Risks and Uncertainties

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Pronouncements

There have been no recent accounting pronouncements not yet adopted by the Company which would have a material impact on the Company’s financial statements.

Accounts Receivable

REVENUES

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUES

3. REVENUES

Nature of our products and services

Our principal products and services include electric power systems, distributed energy resources, power generation equipment and mobile EV charging solutions.

Products

Our Critical Power business provides customers with our suite of mobile e-Boost electric vehicle charging solutions and power generation equipment.

Services

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 $3,952 and $3,391 of service revenue during the six months ended June 30, 2023 and 2022, respectively.

The following table presents our revenues disaggregated by revenue discipline:

SCHEDULE OF REVENUE DISAGGREGATED

	2023		2022 (Revised)		2023		2022 (Revised)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Products	$	10,240	$	3,006	$	16,686	$	7,834
Services		1,890		1,857		3,952		3,391
Total revenue	$	12,130	$	4,863	$	20,638	$	11,225

See “Note 10 - Business Segment and Geographic Information”.

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

4. REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

The following tables reconcile the balances as previously reported in the Quarterly Reports on Form 10-Q as of and for the three and six months ended June 30, 2022 to the as revised balances:

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
	For The Three Months Ended
	June 30, 2022
Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
Revenues	$	4,289		$	574		$	4,863
Cost of goods sold	$	4,208		$	592		$	4,800
Gross profit	$	81		$	(18	)	$	63
Net loss	$	(2,517	)	$	(18	)	$	(2,535	)
Loss per share - basic and diluted	$	(0.26	)		-		$	(0.26	)
Weighted average common shares outstanding - basic and diluted		9,728			-			9,728

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
	For The Six Months Ended
	June 30, 2022
Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
Revenues	$	10,325		$	900	$	11,225
Cost of goods sold	$	9,369		$	870	$	10,239
Gross profit	$	956		$	30	$	986
Net loss	$	(3,305	)	$	30	$	(3,275	)
Loss per share - basic and diluted	$	(0.34	)		-	$	(0.34	)
Weighted average common shares outstanding - basic and diluted		9,685			-		9,685

Condensed Consolidated Balance Sheet (Unaudited)	As Reported		Adjustment			As Revised
	June 30, 2022
Condensed Consolidated Balance Sheet (Unaudited)	As Reported		Adjustment			As Revised
Total current assets	$	31,080	$	(870	)	$	30,210
Total assets	$	34,116	$	(870	)	$	33,246
Total current liabilities	$	15,696	$	(900	)	$	14,796
Total liabilities	$	17,136	$	(900	)	$	16,236
Total stockholders’ equity	$	16,980	$	30		$	17,010

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
	For The Six Months Ended
	June 30, 2022
Cash Flows From Operating Activities (Unaudited)	As Reported			Adjustment			As Revised
Net loss	$	(3,305	)	$	30		$	(3,275	)
Changes in current operating assets and liabilities:
Inventories	$	(4,857	)	$	870		$	(3,987	)
Deferred revenue	$	6,866		$	(900	)	$	5,966
Net cash used in operating activities	$	(1,621	)	$	-		$	(1,621	)

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
	For The Six Months Ended
	June 30, 2022
Consolidated Statement of Stockholders’ Equity (Unaudited)	As Reported			Adjustment		As Revised
Accumulated deficit	$	(15,617	)	$	30	$	(15,587	)
Total stockholders’ equity	$	16,980		$	30	$	17,010

INVENTORIES

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

INVENTORIES

5. INVENTORIES

The components of inventories are summarized below:

SCHEDULE OF INVENTORIES

	June 30,		December 31,
	2023		2022
Raw materials	$	5,705	$	2,962
Work in process		2,752		5,786
Total inventories	$	8,457	$	8,748

Inventories are stated at the lower of cost or a net realizable value determined on a weighted average method.

PROPERTY AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

6. PROPERTY AND EQUIPMENT, NET

Property and equipment are summarized below:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30,			December 31,
	2023			2022
Machinery, vehicles and equipment	$	2,765		$	2,308
Furniture and fixtures		208			208
Computer hardware and software		612			591
Leasehold improvements		368			368
Construction in progress		831			499
		4,784			3,974
Less: accumulated depreciation		(2,401	)		(2,174	)
Total property and equipment, net	$	2,383		$	1,800

Depreciation expense was $97 and $37 for the three months ended June 30, 2023 and 2022, respectively.

Depreciation expense was $227 and $73 for the six months ended June 30, 2023 and 2022, respectively.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities are summarized below:

	June 30,		December 31,
	2023		2022
Accounts payable	$	5,542	$	5,615
Accrued liabilities		1,249		1,624
Total accounts payable and accrued liabilities	$	6,791	$	7,239

STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

8. STOCK-BASED COMPENSATION

Stock-Based Compensation

A summary of stock option activity during the six months ended June 30, 2023 is as follows:

SCHEDULE OF STOCK OPTION ACTIVITY

	Stock Options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
Outstanding as of January 1, 2023		670,667		$	5.45
Granted		77,500			5.52
Exercised		-			-
Forfeited		(35,000	)		5.60
Outstanding as of June 30, 2023		713,167		$	5.45		5.90	$	2,216
Exercisable as of June 30, 2023		638,167		$	5.45		5.50	$	1,995

A summary of RSU activity during the six months ended June 30, 2023 is as follows:

SUMMARY OF RESTRICTED STOCK ACTIVITY

	Number of units			Weighted-average grant-date fair value per share		Weighted-average grant-date fair value
Unvested restricted stock units as of January 1, 2023		250,000		$	4.35	$	1,087
Units granted		100,000			5.75		575
Units vested		(225,000	)		4.97		(1,118	)
Units forfeited		-			-		-
Unvested restricted stock units as of June 30, 2023		125,000		$	4.35	$	544

BASIC AND DILUTED LOSS PER COMMON SHARE

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

BASIC AND DILUTED LOSS PER COMMON SHARE

9. BASIC AND DILUTED LOSS PER COMMON SHARE

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

10. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

The following tables present information about segment income and loss:

SCHEDULE OF SEGMENT INCOME AND LOSS

	2023		2022 (Revised)		2023		2022 (Revised)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Revenues
T&D Solutions
Power Systems	$	9,224	$	2,543	$	14,985	$	6,256
Service		-		-		-		10
		9,224		2,543		14,985		6,266
Critical Power Solutions
Equipment		1,016		463		1,701		1,578
Service		1,890		1,857		3,952		3,381
		2,906		2,320		5,653		4,959
Consolidated	$	12,130	$	4,863	$	20,638	$	11,225

	2023		2022		2023		2022
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Depreciation and amortization
T&D Solutions	$	17	$	11	$	33	$	21
Critical Power Solutions		209		92		395		162
Unallocated corporate overhead expenses		2		7		4		14
Consolidated	$	228	$	110	$	432	$	197

	2023			2022 (Revised)			2023			2022 (Revised)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022 (Revised)			2023			2022 (Revised)
Operating income (loss)
T&D Solutions	$	1,808		$	(442	)	$	3,050		$	(353	)
Critical Power Solutions		(506	)		(757	)		(943	)		(911	)
Unallocated corporate overhead expenses		(1,680	)		(1,323	)		(2,429	)		(2,081	)
Consolidated	$	(378	)	$	(2,522	)	$	(322	)	$	(3,345	)

Revenues are attributable to countries based on the location of the Company’s customers:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Revenues
United States	$	12,130	$	4,863	$	20,638	$	11,225

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2023
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements There have been no recent accounting pronouncements not yet adopted by the Company which would have a material impact on the Company’s financial statements. Accounting Standards Update (“ASU”) 2023-03, “Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 Emerging Issues Task Force (“EITF”) Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X: Income or Loss Applicable to Common Stock.” ASU 2023-03 amends the ASC for SEC updates pursuant to SEC Staff Accounting Bulletin No. 120; SEC Staff Announcement at the March 24, 2022 EITF Meeting; and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X: Income or Loss Applicable to Common Stock. These updates were immediately effective and did not have a significant impact on our financial statements.
Accounts Receivable	Accounts Receivable On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” using a modified retrospective approach. The standard amends several aspects of the measurement of credit losses related to certain financial instruments, including the replacement of the existing incurred credit loss model and other models with the current expected credit losses model. The cumulative effect of adoption did not result in an adjustment to the allowance for credit loss, and accordingly, the Company’s accumulated deficit as of January 1, 2023. The Company accounts for trade receivables at original invoice amount less an estimate made for expected credit losses. The Company’s allowance for expected credit losses on accounts receivable reflects management’s estimate of credit losses over the remaining expected life of such assets, measured primarily using historical experience, as well as current conditions and forecasts that affect the collectability of the reported amount. There were no allowances for expected credit losses as of June 30, 2023 and December 31, 2022.

REVENUES (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

SCHEDULE OF REVENUE DISAGGREGATED

The following table presents our revenues disaggregated by revenue discipline:

SCHEDULE OF REVENUE DISAGGREGATED

	2023		2022 (Revised)		2023		2022 (Revised)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Products	$	10,240	$	3,006	$	16,686	$	7,834
Services		1,890		1,857		3,952		3,391
Total revenue	$	12,130	$	4,863	$	20,638	$	11,225

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

SCHEDULE OF PRIOR PERIOD FINANCIAL STATEMENTS

The following tables reconcile the balances as previously reported in the Quarterly Reports on Form 10-Q as of and for the three and six months ended June 30, 2022 to the as revised balances:

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
	For The Three Months Ended
	June 30, 2022
Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
Revenues	$	4,289		$	574		$	4,863
Cost of goods sold	$	4,208		$	592		$	4,800
Gross profit	$	81		$	(18	)	$	63
Net loss	$	(2,517	)	$	(18	)	$	(2,535	)
Loss per share - basic and diluted	$	(0.26	)		-		$	(0.26	)
Weighted average common shares outstanding - basic and diluted		9,728			-			9,728

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
	For The Six Months Ended
	June 30, 2022
Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
Revenues	$	10,325		$	900	$	11,225
Cost of goods sold	$	9,369		$	870	$	10,239
Gross profit	$	956		$	30	$	986
Net loss	$	(3,305	)	$	30	$	(3,275	)
Loss per share - basic and diluted	$	(0.34	)		-	$	(0.34	)
Weighted average common shares outstanding - basic and diluted		9,685			-		9,685

Condensed Consolidated Balance Sheet (Unaudited)	As Reported		Adjustment			As Revised
	June 30, 2022
Condensed Consolidated Balance Sheet (Unaudited)	As Reported		Adjustment			As Revised
Total current assets	$	31,080	$	(870	)	$	30,210
Total assets	$	34,116	$	(870	)	$	33,246
Total current liabilities	$	15,696	$	(900	)	$	14,796
Total liabilities	$	17,136	$	(900	)	$	16,236
Total stockholders’ equity	$	16,980	$	30		$	17,010

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment			As Revised
	For The Six Months Ended
	June 30, 2022
Cash Flows From Operating Activities (Unaudited)	As Reported			Adjustment			As Revised
Net loss	$	(3,305	)	$	30		$	(3,275	)
Changes in current operating assets and liabilities:
Inventories	$	(4,857	)	$	870		$	(3,987	)
Deferred revenue	$	6,866		$	(900	)	$	5,966
Net cash used in operating activities	$	(1,621	)	$	-		$	(1,621	)

Condensed Consolidated Statements of Operations (Unaudited)	As Reported			Adjustment		As Revised
	For The Six Months Ended
	June 30, 2022
Consolidated Statement of Stockholders’ Equity (Unaudited)	As Reported			Adjustment		As Revised
Accumulated deficit	$	(15,617	)	$	30	$	(15,587	)
Total stockholders’ equity	$	16,980		$	30	$	17,010

INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

SCHEDULE OF INVENTORIES

The components of inventories are summarized below:

SCHEDULE OF INVENTORIES

	June 30,		December 31,
	2023		2022
Raw materials	$	5,705	$	2,962
Work in process		2,752		5,786
Total inventories	$	8,457	$	8,748

PROPERTY AND EQUIPMENT, NET (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

SCHEDULE OF PROPERTY AND EQUIPMENT

Property and equipment are summarized below:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30,			December 31,
	2023			2022
Machinery, vehicles and equipment	$	2,765		$	2,308
Furniture and fixtures		208			208
Computer hardware and software		612			591
Leasehold improvements		368			368
Construction in progress		831			499
		4,784			3,974
Less: accumulated depreciation		(2,401	)		(2,174	)
Total property and equipment, net	$	2,383		$	1,800

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities are summarized below:

	June 30,		December 31,
	2023		2022
Accounts payable	$	5,542	$	5,615
Accrued liabilities		1,249		1,624
Total accounts payable and accrued liabilities	$	6,791	$	7,239

STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

SCHEDULE OF STOCK OPTION ACTIVITY

A summary of stock option activity during the six months ended June 30, 2023 is as follows:

SCHEDULE OF STOCK OPTION ACTIVITY

	Stock Options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
Outstanding as of January 1, 2023		670,667		$	5.45
Granted		77,500			5.52
Exercised		-			-
Forfeited		(35,000	)		5.60
Outstanding as of June 30, 2023		713,167		$	5.45		5.90	$	2,216
Exercisable as of June 30, 2023		638,167		$	5.45		5.50	$	1,995

SUMMARY OF RESTRICTED STOCK ACTIVITY

A summary of RSU activity during the six months ended June 30, 2023 is as follows:

SUMMARY OF RESTRICTED STOCK ACTIVITY

	Number of units			Weighted-average grant-date fair value per share		Weighted-average grant-date fair value
Unvested restricted stock units as of January 1, 2023		250,000		$	4.35	$	1,087
Units granted		100,000			5.75		575
Units vested		(225,000	)		4.97		(1,118	)
Units forfeited		-			-		-
Unvested restricted stock units as of June 30, 2023		125,000		$	4.35	$	544

BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SCHEDULE OF SEGMENT INCOME AND LOSS

The following tables present information about segment income and loss:

SCHEDULE OF SEGMENT INCOME AND LOSS

	2023		2022 (Revised)		2023		2022 (Revised)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Revenues
T&D Solutions
Power Systems	$	9,224	$	2,543	$	14,985	$	6,256
Service		-		-		-		10
		9,224		2,543		14,985		6,266
Critical Power Solutions
Equipment		1,016		463		1,701		1,578
Service		1,890		1,857		3,952		3,381
		2,906		2,320		5,653		4,959
Consolidated	$	12,130	$	4,863	$	20,638	$	11,225

	2023		2022		2023		2022
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Depreciation and amortization
T&D Solutions	$	17	$	11	$	33	$	21
Critical Power Solutions		209		92		395		162
Unallocated corporate overhead expenses		2		7		4		14
Consolidated	$	228	$	110	$	432	$	197

	2023			2022 (Revised)			2023			2022 (Revised)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022 (Revised)			2023			2022 (Revised)
Operating income (loss)
T&D Solutions	$	1,808		$	(442	)	$	3,050		$	(353	)
Critical Power Solutions		(506	)		(757	)		(943	)		(911	)
Unallocated corporate overhead expenses		(1,680	)		(1,323	)		(2,429	)		(2,081	)
Consolidated	$	(378	)	$	(2,522	)	$	(322	)	$	(3,345	)

SCHEDULE OF REVENUES ARE ATTRIBUTABLE TO COUNTRIES BASED ON THE LOCATION

Revenues are attributable to countries based on the location of the Company’s customers:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022 (Revised)		2023		2022 (Revised)
Revenues
United States	$	12,130	$	4,863	$	20,638	$	11,225

BUSINESS ORGANIZATION, NATURE OF OPERATIONS, RISKS AND UNCERTAINTIES (Details Narrative) $ in Thousands		6 Months Ended	12 Months Ended
	Dec. 13, 2021 USD ($)	Jun. 30, 2023 USD ($) Location	Dec. 31, 2023	Dec. 31, 2022 USD ($) Segments
Property, Plant and Equipment [Line Items]
Number of additional locations \| Location		3
Number of reportable segments \| Segments				2
Deferred tax assets valuation allowance percentage		100.00%
Cash and Cash Equivalents, at Carrying Value		$ 9,624
Working capital		14,363
New Sales Agreement [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Number of shares issued	$ 8,600
ATM Program [Member]
Property, Plant and Equipment [Line Items]
Proceeds from issuance of common stock		$ 8,600
Seller Notes [Member]
Property, Plant and Equipment [Line Items]
Debt Instrument, Periodic Payment, Principal				$ 7,500
Forecast [Member]
Property, Plant and Equipment [Line Items]
Effective tax rate			0.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	Dec. 31, 2022 USD ($)
Accounting Policies [Abstract]
Accounts Receivable, Allowance for Credit Loss	$ 0

SCHEDULE OF REVENUE DISAGGREGATED (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 12,130	$ 4,863	$ 20,638	$ 11,225
Product [Member]
Disaggregation of Revenue [Line Items]
Total revenue	10,240	3,006	16,686	7,834
Service [Member]
Disaggregation of Revenue [Line Items]
Total revenue	$ 1,890	$ 1,857	$ 3,952	$ 3,391

REVENUES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
REVENUES (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 12,130	$ 4,863	$ 20,638	$ 11,225
Costs Incurred, Development Costs	2,103	592	2,652	870
Deferred Revenue, Revenue Recognized	$ 3,285	$ 214	$ 7,794	$ 2,056
Customer One [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage	63.00%	35.00%	60.00%		57.00%
Customer One [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage			57.00%	18.00%
Customer Two [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage		11.00%	16.00%		13.00%
Customer Two [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage			10.00%	16.00%
Customer Three [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage					11.00%
Customer Three [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk percentage				13.00%
Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 7,773	$ 2,432	$ 13,558	$ 6,934
Over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,467	574	3,128	900
Service [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 1,890	$ 1,857	$ 3,952	$ 3,391

SCHEDULE OF PRIOR PERIOD FINANCIAL STATEMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenues	$ 12,130	$ 4,863	$ 20,638	$ 11,225
Cost of goods sold	9,419	4,800	15,714	10,239
Gross profit	2,711	63	4,924	986
Net loss	$ (319)	$ (2,535)	$ (197)	$ (3,275)
Earnings Per Share, Diluted	$ (0.03)	$ (0.26)	$ (0.02)	$ (0.34)
Weighted Average Number of Shares Outstanding, Diluted	9,908,434	9,727,878	9,838,989	9,684,610
Total current assets	$ 26,541	$ 30,210	$ 26,541	$ 30,210		$ 33,036
Total assets	30,695	33,246	30,695	33,246		37,175
Total current liabilities	12,178	14,796	12,178	14,796		18,962
Total liabilities	13,011	16,236	13,011	16,236		20,242
Total stockholders’ equity	17,684	17,010	17,684	17,010	$ 17,184	16,933	$ 18,886	$ 19,552
Changes in current operating assets and liabilities:
Inventories			291	(3,987)
Deferred revenue			(6,204)	5,966
Net cash used in operating activities			366	(1,621)
Accumulated deficit	(16,147)	(15,587)	(16,147)	(15,587)		$ (15,950)
Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenues		4,289		10,325
Cost of goods sold		4,208		9,369
Gross profit		81		956
Net loss		$ (2,517)		$ (3,305)
Earnings Per Share, Diluted		$ (0.26)		$ (0.34)
Weighted Average Number of Shares Outstanding, Diluted		9,728,000		9,685,000
Total current assets		$ 31,080		$ 31,080
Total assets		34,116		34,116
Total current liabilities		15,696		15,696
Total liabilities		17,136		17,136
Total stockholders’ equity		16,980		16,980
Changes in current operating assets and liabilities:
Inventories				(4,857)
Deferred revenue				6,866
Net cash used in operating activities				(1,621)
Accumulated deficit		(15,617)		(15,617)
Revision of Prior Period, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenues	574	574	900	900
Cost of goods sold	$ 592	592	$ 870	870
Gross profit		(18)		30
Net loss		$ (18)		$ 30
Earnings Per Share, Diluted
Weighted Average Number of Shares Outstanding, Diluted
Total current assets		$ (870)		$ (870)
Total assets		(870)		(870)
Total current liabilities		(900)		(900)
Total liabilities		(900)		(900)
Total stockholders’ equity		30		30
Changes in current operating assets and liabilities:
Inventories				870
Deferred revenue				(900)
Net cash used in operating activities
Accumulated deficit		$ 30		$ 30

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenues	$ 12,130	$ 4,863	$ 20,638	$ 11,225
Cost of Goods and Services Sold	9,419	4,800	15,714	10,239
Revision of Prior Period, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenues	574	574	900	900
Cost of Goods and Services Sold	$ 592	$ 592	$ 870	$ 870

SCHEDULE OF INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 5,705	$ 2,962
Work in process	2,752	5,786
Total inventories	$ 8,457	$ 8,748

SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Construction in progress	$ 4,784	$ 3,974
Less: accumulated depreciation	(2,401)	(2,174)
Total property and equipment, net	2,383	1,800
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	2,765	2,308
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	208	208
Computer Hardware and Software [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	612	591
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	368	368
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Construction in progress	$ 831	$ 499

PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation, Depletion and Amortization	$ 97	$ 37	$ 227	$ 73

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accounts payable	$ 5,542	$ 5,615
Accrued liabilities	1,249	1,624
Total accounts payable and accrued liabilities	$ 6,791	$ 7,239

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued Sales Commission, Current	$ 250	$ 278
Accrued Employee Benefits, Current	345	213
Taxes Payable, Current	108	258
Accrued Insurance, Current	$ 157	$ 559
[custom:AccountsPayablePercentage-0]	15.00%	10.00%

SCHEDULE OF STOCK OPTION ACTIVITY (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) $ / shares shares
Share-Based Payment Arrangement [Abstract]
Number of options outstanding, beginning \| shares	670,667
Weighted average exercise price outstanding, beginning \| $ / shares	$ 5.45
Granted \| shares	77,500
Weighted average exercise price, Granted \| $ / shares	$ 5.52
Exercised \| shares
Weighted average exercise price, Exercised \| $ / shares
Forfeited \| shares	(35,000)
Weighted average exercise price, Forfeited \| $ / shares	$ 5.60
Number of options outstanding, ending \| shares	713,167
Weighted average exercise price outstanding, ending \| $ / shares	$ 5.45
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	5 years 10 months 24 days
Aggregate intrinsic value outstanding, ending \| $	$ 2,216
Number of options exercisable, ending \| shares	638,167
Weighted average exercise price exercisable, ending \| $ / shares	$ 5.45
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	5 years 6 months
Aggregate intrinsic value, ending \| $	$ 1,995

SUMMARY OF RESTRICTED STOCK ACTIVITY (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($) $ / shares shares
Share-Based Payment Arrangement [Abstract]
Non-vested shares, beginning \| shares	250,000
Weighted average grant date fair value per share, beginning \| $ / shares	$ 4.35
Weighted average grant date fair value, beginning \| $	$ 1,087
Granted \| shares	100,000
Weighted average grant date fair value per share, granted \| $ / shares	$ 5.75
Weighted average grant date fair value, granted \| $	$ 575
Vested \| shares	(225,000)
Weighted average grant date fair value per share, vested \| $ / shares	$ 4.97
Weighted average grant date fair value, vested \| $	$ (1,118)
Forfeited \| shares
Weighted average grant date fair value per share, forfeited \| $ / shares
Weighted average grant date fair value, forfeited \| $
Non-vested shares, ending \| shares	125,000
Weighted average grant date fair value per share, ending \| $ / shares	$ 4.35
Weighted average grant date fair value, ending \| $	$ 544

STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]
Share-Based Payment Arrangement, Noncash Expense	$ 819	$ 659	$ 962	$ 716
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 719		$ 719
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			10 months 24 days

BASIC AND DILUTED LOSS PER COMMON SHARE (Details Narrative) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Underlying Stock Options [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	713,167	670,667
Underlying Nonvested RSUs [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	125,000	250,000

SCHEDULE OF SEGMENT INCOME AND LOSS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
	$ 12,130	$ 4,863	$ 20,638	$ 11,225
Depreciation and amortization	228	110	432	197
Operating income (loss)	(378)	(2,522)	(322)	(3,345)
Operating Segments [Member] \| T&D Solutions [Member]
Segment Reporting Information [Line Items]
	9,224	2,543	14,985	6,266
Depreciation and amortization	17	11	33	21
Operating income (loss)	1,808	(442)	3,050	(353)
Operating Segments [Member] \| T&D Solutions [Member] \| Power Systems [Member]
Segment Reporting Information [Line Items]
	9,224	2,543	14,985	6,256
Operating Segments [Member] \| T&D Solutions [Member] \| Service [Member]
Segment Reporting Information [Line Items]
				10
Operating Segments [Member] \| Critical Power Solutions [Member]
Segment Reporting Information [Line Items]
	2,906	2,320	5,653	4,959
Depreciation and amortization	209	92	395	162
Operating income (loss)	(506)	(757)	(943)	(911)
Operating Segments [Member] \| Critical Power Solutions [Member] \| Service [Member]
Segment Reporting Information [Line Items]
	1,890	1,857	3,952	3,381
Operating Segments [Member] \| Critical Power Solutions [Member] \| Equipment [Member]
Segment Reporting Information [Line Items]
	1,016	463	1,701	1,578
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	2	7	4	14
Operating income (loss)	$ (1,680)	$ (1,323)	$ (2,429)	$ (2,081)

SCHEDULE OF REVENUES ARE ATTRIBUTABLE TO COUNTRIES BASED ON THE LOCATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 12,130	$ 4,863	$ 20,638	$ 11,225
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 12,130	$ 4,863	$ 20,638	$ 11,225