PPSI 10-K & 10-Q changes, risk factors and insider trading

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

Section 404 of the Sarbanes-Oxley Act of 2002 requires that public companies evaluate and report on their systems of internal control over financial financial reporting. As disclosed in Part II, Item 9A, Controls and Procedures of this ComprehensiveAnnual Report on Form 10-K, our management, including our Chief Executive Officer and our Chief Financial Officer, has determined that we hadhave atwo material weaknessweaknesses in our internal control over financial reporting as of December 31, 20242025, a material weakness related to the lack of sufficient accounting personnel personnelwith the requisite skills, knowledge and expertise which negatively impacted the Company’s ability to maintain appropriate segregation of duties.duties and effective controls, as well as a material weakness around information technology general controls related to user access and privileged access within systems supporting the Company’s accounting and financial reporting processes which allowed certain individuals to have elevated access to systems inconsistent with such individuals’ business needs. As a result of thisthese material weakness, weaknesses, the Company’s management, under the supervision of the Audit Committee and with participation of the Company’s Chief Executive Officer and Chief Financial Officer, concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2024.2025.

Although we are working to remedy the material weaknessweaknesses and ineffectiveness of the Company’s internal control over financial reporting and and disclosure controls and procedures, there can be no assurance as to when the remediation plan will be fully developed and implemented implemented or the outcome of such remediation efforts, or that in the future, additional material weaknesses will not exist, reoccur or otherwise be discovered, a risk that is significantly increased in light of the complexity of our business. Until our remediation plan is fully implemented, our management will continue to devote significant time, attention and financial resources to these efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, there will continue to be an increased risk that our future consolidated financial statements could contain errors that will be undetected. If we continue to have thisthese existing material weakness,weaknesses, other material weaknesses or significant deficiencies in the future, it could create a perception that our financial results do not fairly state our financial condition or results of operations. See “Part II. Item 9A – Controls and Procedures.” This These material weaknessweaknesses could adversely affect our business, reputation, revenues, results of operations, financial condition, and liquidity. They This could also adversely affect our ability to timely file periodic reports under the Exchange Act, and limit our ability to access the capital markets through equity or debt issuances. Additional impacts could include a decline in our stock price, suspension of trading or delisting of our common stock by the Nasdaq Capital Market. Any of the foregoing could have an adverse effect on the value of our stock. For more information relating to the Company’s internal control over financial reporting, the material weaknessweaknesses that existed as of December 31, 2024,2025, and the remediation activities undertaken by us, see Part II, Item 9A, Controls and Procedures of this ComprehensiveAnnual Report on Form 10-K. See also “—Failure to establish and maintain effective internal control over financial reporting may result in us not being able to accurately report our financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock.”

If our management is unable to certify the effectiveness of our internal controls or if material weaknesses or significant deficiencies in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could harm harm our business and cause a decline in the price of our common stock. As disclosed under “Item 9A. Controls and Procedures” in this ComprehensiveAnnual Report on Form 10-K, in connection with preparing our financial statements for the year ended December 31, 2024,2025, management concluded that atwo material weaknessweaknesses existed in our internal control over financial reporting related to the lack of sufficient accounting personnel with the requisite skills, knowledge and expertise which negatively impacted the Company’s ability to maintain appropriate segregation of duties.duties and effective controls, as well as a material weakness in our information technology general controls related to user access and privileged access within systems supporting the Company’s accounting and financial reporting processes which allowed certain individuals to have elevated access to systems inconsistent with such individuals’ business needs. In addition, due to the same material weakness,weaknesses, we determined that our disclosure controls and procedures were not effective as of December 31, 2024.2025. See “—We have identified atwo material weaknessweaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.”

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

We historically have depended, and expect to continue to depend on a small number of customers for a large portion of our business each quarter, due to the scope of certain projects. Any change in the level of orders from customers could have a significant impact on our results of operations, and a loss of business from customers could have an adverse effect on our business, financial condition and operating results. Approximately 22%24% and 13% of our sales during the year ended December 31, 2024,2025, were made to INFEneridge, Associates, LLCInc. and BritishSparkCharge, Columbiarespectively. HydroAs andof PowerDecember Authority,31, respectively.2025, one customer represented 100% of the Company’s lease receivable balance. The majority of our sales to these customers and other customers in the past were made pursuant to contract terms and conditions for each project and it is expected that future sales will similarly be made pursuant to the relevant contract terms and conditions for future projects. See “Item 1. Business - Customers”.

CertainOur ofCritical ourPower business units havehas historically generated operating losses and negative cash flows, which may result in the usage of our cash.

AfterWe the sale of our PCEP business unit in October 2024, we nowcurrently have one business unit (Critical Power), which has been unable to earn positive income and generate positive cash flow in its recent history. With $41,622$14,959 of cash on hand as of December 31, 2024,2025, any such losses will negatively impact our cash balance.

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

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

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

In addition, discovery and disclosure of a material weakness, including the material weaknessweaknesses identified in our internal control over financial financial reporting as of December 31, 2024,2025, by definition, could have a material adverse impact on our consolidated financial statements. Such Such an occurrence could discourage certain customers or suppliers from doing business with us and adversely affect how our stock trades. This could in turn negatively affect our ability to access equity markets for capital.

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

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

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

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. As of December 31, 2024, no critical accounting estimates have been identified.

Our significant accounting policies are more fully described in Note 32 – Summary of Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Annual Report.Report on Form 10-K.

Selected financial and operating data for our reportable business segment for the most recent two years is summarized below. This information, as well as the selected financial data provided in Note 13 andto our Consolidated Financial Statements and related notes included in this Annual Report on Form 10-K, should be referred to when reading our discussion and analysis of results of operations below. Our summary of operating results during the years ended December 31, 2024,2025, and 20232024, are as follows (in thousands):

Our revenue backlog as of December 31, 2024,2025, from our Critical Power business was $19,762,$12,617, ana increasedecrease of $3,094,$7,145, or 18.6%,36.2%, when compared to $16,668$19,762 as of December 31, 2023.2024. The following table represents the progression of our backlog as of December 31, 20242025, and 20232024 (in thousands):

For the year ended December 31, 2024,2025, our revenue from our Critical Power segment increased by $11,763,$4,748, or 105.8%20.8% to $22,879,$27,627, up from $11,116$22,879 during the year ended December 31, 2023,2024, primarily due to an increase in shipmentssales and rentals of our suite of mobile EV charging equipment,solutions, e-Boost©.e-Boost, partially offset by a decrease in service sales.

For the year ended December 31, 2024,2025, our gross margin from our Critical Power segment increaseddecreased to 24.1%12.4% of revenues, as compared to 20.0%24.1% during the year ended December 31, 2023.2024. The increasedecrease was predominatelyprimarily attributable to an unfavorable sales mix, in addition to a contract with a customer in our Pioneer eMobility business which generated lower margins on the initial units due to higher costs incurred during the increaseearly in salesstages of production as we refined our e-Boostmanufacturing equipmentprocesses fromand our Pioneeroptimized eMobilitybuild business.efficiency.

Selling, General and Administrative Expense. For the year ended December 31, 2025, consolidated selling, general and administrative expense Fordecreased by approximately $566, or 5.8%, to $9,146, as compared to $9,712 during the year ended December 31, 2024, consolidated selling, general and administrative expense increased by approximately $1,337, or 16.0%, to $9,712, as compared to $8,375 during the year ended December 31, 2023, primarily due to a decrease in stock-based compensation expense and professional fees, partially offset by an increase in payrollinformation relatedtechnology costs and insurance expense. As a percentage of our consolidated revenue, selling, general and administrative expense decreased to 42.4%33.1% in the year ended December 31, 2024, as compared to 75.3% induring the year ended December 31, 20232025, as compared to 42.4% during the year ended December 31, 2024, primarily due to the increase in total revenue during the year ended December 31, 2024.2025.

R&D Expenses. Research and development expenses in our Critical Power segment consists of costs incurred in performing research and development activities, including salaries, benefits, overhead costs, depreciation, contract services and other related costs. During the year ended December 31, 2024, 2025, we incurred $1,050$875 of R&D expenses related to developing our mobile e-Boost EV charging solutions as compared to $885$1,050 for during the year ended December 31, 2023.2024.

Operating Income (Loss) from Continuing Operations

During the year ended December 31, 2024,2025, our operating loss from continuing operations decreasedincreased by approximately $1,787,$1,347, or 25.4%,25.7%, to $5,248, $6,595, as compared to $7,035 $5,248 during the year ended December 31, 2023,2024, primarily due to an increase in sales and rentalscost of ourgoods e-Boostsold equipment from our Pioneer eMobility businessresulting in additiona tolower gross an increase in service sales.profit.

Non-Operating Income (Expense) from Continuing Operations

Interest Income. For the year ended December 31, 2024,2025, we had interest income of approximately $431,$739, as compared to interest income of approximately $232$431 during the year ended December 31, 2023.2024. We generated the majoritymost of our interest income from our cash on hand during the year ended December 31, 2024.2025.

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

For the year ended December 31, 2024,2025, other non-operating incomeexpense was $50,$518, as compared to other non-operating expenseincome of $524$50 during the year ended December 31, 2023.2024, Includedprimarily indue other non-operating income duringto the yearloss endedon Decemberour 31,equity 2023,method was a settlement gain of $525 related to a legal matter and no such gain was recognized during the year ended December 31, 2024.investment.

Provision for Income Taxes. Our provision for income taxes reflects an effective tax rate on loss before taxes of 29.7%(1.2)% for the year ended December December 31, 2024,2025, as compared to 0.0%29.7% for the year ended December 31, 2023,2024, as set forth below (in thousands):

Net (Loss) Earnings per Share from Continuing Operations

The continuing impacts of the rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments, such as the ongoing conflict between Russia and Ukraine, and the ongoing conflict betweenin Israelthe andMiddle Hamas,East, have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time. Additionally, the shutdown of the U.S. federal government, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariff policies and regulations, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. As a result of the current uncertainty in economic activity, we are unable to predict the potential size and duration of the impact on our revenue and our results of operations, if any. The extent of the potential impact of these macroeconomic factors on our operational and financial performance will depend on a variety of factors, including the extent of geopolitical disruption and its impact on our clients, partners, industry, and employees, all of which are uncertain at this time and cannot be accurately predicted. We continue to monitor the effects of these macroeconomic factors and intend to take steps deemed appropriate to limit the impact on our business. During the year ended December 31, 2024,2025, we were able to operate substantially at capacity.

Cash Used in Operating Activities. Cash used in our operating activities was $6,212$5,818 during the year ended December 31, 2024,2025, as compared compared to cash used in our operating activities of $3,895$6,212 during the year ended December 31, 2023.2024. The increasedecrease in cash used in operating activities is primarily due to working capital fluctuations.fluctuations and the payment of federal and state income taxes.

Cash Used in/ Provided by/ Used in Investing Activities. Cash providedused byin investing activities during the year ended December 31, 2024,2025, was $38,876,$3,896, as compared to cash usedprovided inby our investing activities of $2,496$38,876 during the year ended December 31, 2023.2024. The increase in cash providedused byin investing activities is primarily due to the payment of the $2,200 consideration to the buyer of the PCEP Sale during the year ended December 31, 2024.2025. During the yearsyear ended December 31, 2024 2025, and 2023,2024, additions to our property and equipment were $3,759$2,677 and $2,496, $3,759, respectively.

Cash Used in/ Provided by/ Used in Financing Activities. Cash used in our financing activities was $16,949 during the year ended December 31, 2025, as compared to cash provided by our financing activities was $5,376 during the year ended December 31, 2024, as compared to cash used in our financing activities $323 during the year ended December 31, 2023.2024. The increase in cash providedused in by financing activities is primarily due to the salepayment of commona stockone-time underspecial thecash ATM Program.dividend.

Assessment of Liquidity. As of December 31, 2024,2025, we had $41,622$14,959 of cash on hand generated primarily from the PCEP Sale and the sale of common stock under the ATM Program.Sale. We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the sale of the transformer business units in August 20192019, the completion of the PCEP Sale in October 2024 and the sale of common stock under the ATM Program.stock. Historically, our cash requirements were generally for operating activities, debt repayment, capital improvements and acquisitions.

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

Our additions to property and equipment were $3,759$2,677 during the year ended December 31, 2024,2025, as compared to $2,496$3,759 of additions during the year year ended December 31, 2023.2024.

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

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 annualAnnual reportReport on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission on April 8, 2026, and areis supplemented with the following revised risk factor:

We historically have depended, and expect to continue to depend on a small number of customers for a large portion of our business each quarter, due to the scope of certain contracts. Any change in the level of orders from customers could have a significant impact on our our results of operations, and a loss of business from customers could have an adverse effect on our business, financial condition and operating results. Approximately 14%14%, 12% and 11% of our salesrevenues during the three months ended MarchJune 31,30, 2026, were made to three customers. Approximately 13% and 11% of our revenues during the six months ended June 30, 2026, were made to two customers. The majority of our sales to these customers and other customers in the past were made pursuant to contract terms and conditions for each project and it is expected that future sales will similarly be made pursuant to the relevant contract terms and conditions for future contracts. In addition, a single customer represented 100% of our lease receivable balance as of MarchJune 31,30, 2026.

Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts and disclosures in the unaudited condensed consolidated 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 Securities and Exchange Commission (the “SEC”) on April 8, 2026. There were no material changes to our critical accounting estimates during the threesix months ended MarchJune 31,30, 2026.

Overview of MarchJune 31,30, 2026, and 2025, Operating Results

Our summary of operating results during the three and six months ended MarchJune 31,30, 2026, and 2025, areis as follows:

Our revenue backlog as of MarchJune 31,30, 2026, from our Critical Power business was $13,949,$18,353, aan decreaseincrease of $9,282,$468, or 40.0%,2.6%, when compared to $17,885 $23,231 as of MarchJune 31,30, 2025.

For the three months ended MarchJune 31,30, 2026, our revenue decreased by $2,474,$3,351, or 36.7%40.0% to $4,266,$5,019, down from $6,740 $8,370 during the three months ended June March 31,30, 2025, primarily due to a decrease in sales and rentals of our suite of mobile EV charging solutions, e-Boost.

For the three months ended MarchJune 31,30, 2026, our gross margin increased to 13.6%19.6% of revenues, as compared to 2.2% 15.7% during the three months ended June March 31,30, 2025, primarily driven by improved operating efficiencies associated with the sale of our mobile EV charging solutions, e-Boost.

Selling, General and Administrative Expense. For the three months ended MarchJune 31,30, 2026, consolidated selling, general and administrative expense increased by approximately $32,$340, or 1.3%,13.7%, to $2,446,$2,828, as compared to $2,414$2,488 during the three months ended MarchJune 31,30, 2025.2025, primarily due to an increase in payroll related costs and professional fees. As a percentage of our consolidated revenue, selling, general and administrative expense increased to 57.3%56.3% during the three months ended MarchJune 31,30, 2026, as compared to 35.8%29.7% during the three months ended MarchJune 31,30, 2025, primarily due to the decrease in total revenue during the three-month period ended MarchJune 31,30, 2026.

R&D Expenses. Research and development expenses consist of costs incurred in performing research and development activities, including salaries, benefits, overhead costs, contract services and other related costs. During the three months ended March 31,June 30, 2026, we incurred $156 $161 of R&D expenses related to developing our mobile EV charging and power generation equipment as compared to $80$534 during the three months ended MarchJune 31,30, 2025.

During the three months ended MarchJune 31,30, 2026, our operating loss from continuing operations decreasedincreased by approximately $326,$297, or 13.9%,17.4%, to $2,020,$2,005, as compared to $2,346$1,708 during the three months ended MarchJune 31,30, 2025, primarily due to the increasedecrease in sales and rentals of our grossequipment and profit.services.

Interest Income. For the three months ended MarchJune 31,30, 2026, we had interest income of approximately $156,$51, as compared to interest income of approximately $247$183 during the three months ended MarchJune 31,30, 2025. We generated the majority of our interest income from our cash on hand during the three-month periods ended March 31, 2026, and 2025.

For the three-monthsix periodmonths ended MarchJune 31,30, 2026, otherwe non-operatinghad expenseinterest wasincome $644,of approximately $207, as compared to non-operatinginterest income of $23approximately $431 during the three-monthsix periodmonths ended MarchJune 31,30, 2025, primarily due to the loss on our equity method investment.2025.

We generated athe netmajority lossof our interest income from continuingour operationscash ofon $2,508hand during the three monthsand six-month periods ended MarchJune 31,30, 2026, as compared to $2,076 during the three months ended March 31,and 2025.

(Loss) Income from Discontinued Operations

Income from discontinued operations, net of tax was $0 during the threesix months ended MarchJune 31,30, 2026, as compared to $1,147income from discontinued operations, net of tax of $1,047, during the three six months ended MarchJune 31,30, 2025. The $1,147$1,047 of income recognized during the threesix months ended MarchJune 31, 30, 2025, was due to finalizing the net working capital adjustment with the buyer of the Company’s former wholly owned subsidiary, Pioneer Custom Electrical Products Corp. (“PCEP”) to Voltaris Power, LLC (the “PCEP Sale”).

General. As of MarchJune 31,30, 2026, we had $13,583 of cash on hand generatedof primarily$10,668 fromand theworking PCEPcapital Sale.of $17,129. On October 29, 2024, we closed on the PCEP Sale Sale for gross cash proceeds of $48,000 and $2,000 in equity. On January 7, 2025, we paid a one-time special cash dividend of an aggregate of $16,665. As of December 31, 2024, the Company recorded a consideration due to the buyer of the PCEP Sale of $3,347 related to a net working capital adjustment. On April 16, 2025, we and the buyer from the PCEP Sale finalized the net working capital adjustment and as a result, we recorded a $1,147 adjustment to the consideration due to the buyer of the PCEP Sale. During the year ended December 31, 2025, we paid the $2,200 consideration to the buyer of the PCEP Sale.

The continuing impacts of the rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments, such as the ongoing conflict between Russia and Ukraine, and the ongoing conflict in the Middle East, have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time. Additionally, the shutdown of the U.S. federal government, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariff policies and regulations, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. As a result of the current uncertainty in economic activity, we are unable to predict the potential size and duration of the impact on our revenue and our results of operations, if any. The extent of the potential impact of these macroeconomic factors on our operational and financial performance will depend on a variety of factors, including the extent of geopolitical disruption and its impact on our clients, partners, industry, and employees, all of which are uncertain at this time and cannot be accurately predicted. We continue to monitor the effects of these macroeconomic factors and intend to take steps deemed appropriate to limit the impact on our business. During the three and six months ended MarchJune 31,30, 2026, we were able to operate substantially at capacity.

Cash Used in FinancingOperating Activities. Cash used in our financingoperating activities was $30$3,626 during the threesix months ended MarchJune 31,30, 2026, as compared compared to cash used in our financingoperating activities of $16,689$3,963 during the threesix months ended MarchJune 31,30, 2025. The decrease in cash used in financing activities is primarily due to the payment of a one-time special cash dividend during the three months ended March 31, 2025.

Working Capital. As of MarchJune 31,30, 2026, we had working capital of $18,657,$17,129, including $13,583$10,668 of cash on hand, as compared to working capital of $20,659, including $14,959 of cash on hand as of December 31, 2025.

Assessment of Liquidity. As of MarchJune 31,30, 2026, we had $13,583$10,668 of cash on hand generatedand primarilyworking fromcapital theof PCEP Sale.$17,129. We have historically met our cash needs through a combination of cash flows from operating activities and bank borrowings, the completion of the sale of our wholly owned business units and the sale of common stock. Historically, our cash requirements were generally for operating activities, debt repayment, capital improvements and acquisitions.

As of MarchJune 31,30, 2026, 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.