Pioneer Power Solutions Files 2023 10-K

TL;DR

Pioneer Power Solutions dropped its 2023 10-K. Check financials for 12/31/23.

AI Summary

Pioneer Power Solutions, Inc. filed its 2023 10-K on July 26, 2024, detailing its financial performance for the fiscal year ending December 31, 2023. The company, previously known as Sierra Concepts, Inc., operates in the power, distribution, and specialty transformers sector. The filing provides a comprehensive overview of its business, financial condition, and results of operations for the fiscal year.

Why It Matters

This filing provides investors with a detailed look at Pioneer Power Solutions' financial health and operational performance for the past fiscal year, crucial for understanding its current standing and future prospects.

Risk Assessment

Risk Level: medium — The filing is a standard annual report, but the company operates in a competitive industry with potential regulatory and market risks.

Key Numbers

• 20231231 — Fiscal Year End (The report covers the financial performance up to this date.)
• 20240726 — Filing Date (The date the 10-K was officially submitted to the SEC.)

Key Players & Entities

• PIONEER POWER SOLUTIONS, INC. (company) — Filer
• SIERRA CONCEPTS, INC. (company) — Former Company Name
• 20231231 (date) — Fiscal Year End
• 20240726 (date) — Filing Date
• 3612 (industry_code) — Standard Industrial Classification

FAQ

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share PPSI Nasdaq Capital Mark
• $803 billion — obal electric vehicle market will reach $803 billion by the year 2027, registering a compoun
• $194 billion — 6%. North America is estimated to reach $194 billion by 2027, at a significant CAGR of 27.5%

Filing Documents

• form10-k.htm (10-K) — 1924KB
• ex4-1.htm (EX-4.1) — 43KB
• ex23-1.htm (EX-23.1) — 4KB
• ex31-1.htm (EX-31.1) — 19KB
• ex31-2.htm (EX-31.2) — 19KB
• ex32-1.htm (EX-32.1) — 8KB
• ex32-2.htm (EX-32.2) — 8KB
• ex97-1.htm (EX-97.1) — 53KB
• form10-k_001.jpg (GRAPHIC) — 10KB
• 0001493152-24-029269.txt ( ) — 9516KB
• ppsi-20231231.xsd (EX-101.SCH) — 54KB
• ppsi-20231231_cal.xml (EX-101.CAL) — 82KB
• ppsi-20231231_def.xml (EX-101.DEF) — 229KB
• ppsi-20231231_lab.xml (EX-101.LAB) — 422KB
• ppsi-20231231_pre.xml (EX-101.PRE) — 391KB
• form10-k_htm.xml (XML) — 1757KB

Business

Business 2 Item 1A.

Risk Factors

Risk Factors 7 Item 1B. Unresolved Staff Comments 17 Item 1C. Cybersecurity 17 Item 2.

Properties

Properties 18 Item 3.

Legal Proceedings

Legal Proceedings 19 Item 4. Mine Safety Disclosures 19 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 Item 6. [Reserved] 20 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 28 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 29 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 59 Item 9A.

Controls and Procedures

Controls and Procedures 59 Item 9B. Other Information 60 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 60 PART III Item 10. Directors, Executive Officers and Corporate Governance 61 Item 11.

Executive Compensation

Executive Compensation 65 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 71 Item 13. Certain Relationships and Related Transactions, and Director Independence 72 Item 14. Principal Accountant Fees and Services 73 PART IV Item 15. Exhibits and Financial Statement Schedules 74 Item 16. Form 10-K Summary 74 EXPLANATORY NOTE We are filing this comprehensive Annual Report on Form 10-K for the fiscal years ended December 31, 2023 and 2022 ("Comprehensive Form 10-K"). This Comprehensive Form 10-K contains our audited financial statements for the fiscal year ended December 31, 2023, as well as restatements of the following previously filed periods: (i) audited consolidated financial statements as of and for the fiscal year ended December 31, 2022, originally included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the "2022 10-K"), and (ii) unaudited condensed consolidated financial statements for the quarterly periods ended March 31, 2022 through September 30, 2023, originally included in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023 and September 30, 2023 (collectively, the "Form 10-Qs" and together with the 2022 10-K, the "Prior Financial Statements"). Restatement Background As previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on June 6, 2024, in connection with the preparation of our consolidated financial statements for the fiscal year ended December 31, 2023, we, in consultation with the Audit Committee (the "Committee") of our Board of Directors, concluded that the Prior Financial Statements should no longer be relied upon due to errors in such consolidated

financial statements and should be restated to correct the misstatements therein

financial statements and should be restated to correct the misstatements therein. During 2022 and 2023, we recognized revenues associated with customer contracts with performance obligations satisfied over time ("Over Time Contracts") using labor hours as the measure of progress. Our underlying estimates of total labor hours required to complete Over Time Contracts were materially different from the actual labor hours required, which was determined to represent an error, and, as a result, the percentage of completion used to recognize revenue in the Prior Financial Statements is materially different from the percentage of completion using actual labor hours incurred. As a result, we have restated revenues during the Prior Financial Statements to adjust the percentage of completion based upon the actual labor hours incurred to complete each Over Time Contract (the "Revenues Adjustment"). Additionally, we have determined that costs from Over Time Contracts should be recognized as incurred and, as a result, we have recorded an adjustment to our consolidated financial statements during the Prior Financial Statements (together with the Revenues Adjustment, the "Restatement Adjustments"). As a result of this error, the Restatement Adjustments result in the recognition of cost of revenues in the Prior Financial Statements for which the recognition of a portion of the corresponding revenues have been deferred to future periods. For those Over Time Contracts that have been completed by us during the Prior Financial Statements, the Restatement Adjustments have the effect of derecognizing amounts in one period and recognizing corresponding amounts in another period within the Prior Financial Statements. Cumulatively, these adjustments will net to zero over time. Restatement Overview Other sections impacted by the restatement of the Prior Financial Statements are:

, Item 1A. Risk Factors

Part I, Item 1A. Risk Factors

, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

, Item 8. Financial Statements and Supplementary Data

Part II, Item 8. Financial Statements and Supplementary Data

, Item 9A. Controls and Procedures

Part II, Item 9A. Controls and Procedures We have not filed, and do not intend to file, amendments to the previously filed Form 10-Qs, nor the previously filed 2022 10-K. Accordingly, investors should rely only on the financial information and other disclosures regarding the restated periods in this Comprehensive Form 10-K or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications relating to these periods. Refer to Note 2 – Restatement of Previously Issued Consolidated Financial Statements and Note 4 – Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements in the accompanying consolidated financial statements included in Part II, Item 8 for additional information. Internal Control Considerations In connection with the Restatement Adjustments, management has evaluated its disclosure controls and procedures and internal control over financial reporting as of December 31, 2023. As a result of that assessment, management has concluded that an additional material weakness existed as of December 31, 2023 as follows: The Company did not maintain effective controls over the revenue recognition of over-time contracts and associated costs. The Company's underlying estimates of total labor hours required to complete over time contracts were materially different from the actual labor hours required, which was determined to represent an error, and, as a result, the percentage of completion used to recognize revenue was materially different from the percentage of completion using actual labor hours incurred. Additionally, the Company did not properly account for recognition of costs incurred by contract. This material weakness resulted in the restatement of the Company's consolidated financial statements for the year ended December 31, 2022, as well as its interim consolidated financial statements for the three months ended March 31, 2022 and 202

Business

Business Strategy We believe we have established a stable platform from which to develop and grow our business lines, revenue, profitability and shareholder value. We are focused on internal growth through operating efficiencies, new product development, customer focus and our continued migration towards more highly-engineered products and specialized services. We intend to significantly increase the percentage of our sales derived from engineered-to-order products and differentiated services and believe this can be accomplished by targeting market segments such as EV charging infrastructure, microgrid developers, national and regional retailers, water treatment facilities, data centers and independent power producers which have growth characteristics exceeding the norm in our industry. 3 We intend to build our revenue and net income through internal growth initiatives. Accomplishing these financial goals will be dependent on a number of factors, including our ability to execute the following strategies and actions: Establishing a scalable organizational infrastructure to support our expected growth; Investing in our capabilities to provide progressively more advanced equipment and service solutions; Continuously applying our manufacturing and service resources to their highest and best uses; Combining and streamlining our business unit supply chains and administrative functions; and Improving business processes to deliver consistency, quality and value to our customers. Electrical Infrastructure Segment We intend to accomplish our growth objectives within our Electrical Infrastructure segment by concentrating on our ability to deliver scalable solutions for the EV infrastructure, DG, and microgrid markets. Our Electrical Infrastructure equipment can be used in many applications and large vertical markets, including but not limited to, electrical, gas and water utilities, EV charging infrastructure integrators, and solar, microgrid and data cente

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View this 10-K filing on SEC EDGAR