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What changed in Polar Power, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Polar Power, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+239 added−210 removedSource: 10-K (2026-04-15) vs 10-K (2025-03-31)

Top changes in Polar Power, Inc.'s 2025 10-K

239 paragraphs added · 210 removed · 146 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

47 edited+25 added−27 removed162 unchanged
Biggest changeThe implementation of 5G networks by Tier-1 telecommunication customers in the U.S. has also resulted in approximately 50% of our net sales during 2024 for our DC power systems while 54% of our sales backlog as of December 31, 2024 are purchase orders of DC power systems which provide backup power for 5G networks for our largest telecom customers in the U.S.
Biggest changeApproximately 66% of our net sales during 2025 were for our DC power systems to support 5G networks for our Tier-1 telecommunications customers in the U.S., as compared to 50% of our net sales during 2024. Purchase orders of our DC power systems for our U.S. Tier-1 telecommunications customers represent 74% of our total sales backlog at December 31, 2025.
With over 75% of the telecommunications market outside U.S. we have concentrated our efforts in developing markets outside U.S. as long term strategy. Despite the lack of reliable electricity grid in international markets like Africa and Asia, telecom operators continue to build infrastructure using hybrid systems.
With over 75% of the telecommunications market outside the U.S. we have concentrated our efforts in developing markets outside the U.S. as a long term strategy. Despite the lack of reliable electricity grid in international markets like Africa and Asia, telecom operators continue to build infrastructure using hybrid systems.
With over 90% of the world’s telecommunication towers located in non-U.S. territories, we began to establish international offices in 2017 and currently have presence in Poland, Romania, Australia, and South Africa to provide long term growth. 3 In the U.S. market, over 95% of the telecommunications towers are connected to a power grid, thereby only requiring backup power generation in equipment in case of an emergency loss of power, while in the emerging markets of Africa and Asia, a significant percentage of telecommunications towers are off-grid and bad grid with frequent power interruptions requiring fuel-efficient prime power equipment to provide power by charging the batteries.
With over 90% of the world’s telecommunication towers located in non-U.S. territories, we began to establish international offices in 2017 and currently have presence in Poland, Romania, Australia, and South Africa to provide long term growth. 4 In the U.S. market, over 95% of the telecommunications towers are connected to a power grid, thereby only requiring backup power generation in equipment in case of an emergency loss of power, while in the emerging markets of Africa and Asia, a significant percentage of telecommunications towers are off-grid and bad grid with frequent power interruptions requiring fuel-efficient prime power equipment to provide power by charging the batteries.
In 2017, we established offices in emerging markets like Poland, Australia, Romania and South Africa to develop strategic alliances with distributors to promote our residential solutions to communities living in bad-grid and off-grid areas. 6 Our Competitive Strengths We have over a 45-year history and have developed a reputation as a proven supplier of reliable and advanced proprietary technology products to customers within the telecommunications, military, commercial, industrial and marine markets.
In 2017, we established offices in emerging markets like Poland, Australia, Romania and South Africa to develop strategic alliances with distributors to promote our residential solutions to communities living in bad-grid and off-grid areas. 7 Our Competitive Strengths We have over a 45-year history and have developed a reputation as a proven supplier of reliable and advanced proprietary technology products to customers within the telecommunications, military, commercial, industrial and marine markets.
We believe that the more cost-effective option will be investing into battery storage at the utility level to manage the peak loads or flexible electricity costs for electric vehicle charging to discourage peak load charging. 5 Regardless of how the peak charging issue is resolved, most homes have not been designed to allow for fast charging of electric vehicles.
We believe that the more cost-effective option will be investing into battery storage at the utility level to manage the peak loads or flexible electricity costs for electric vehicle charging to discourage peak load charging. 6 Regardless of how the peak charging issue is resolved, most homes have not been designed to allow for fast charging of electric vehicles.
We have established offices in emerging markets and currently have presence in Australia, Poland, Romania, and South Africa. Our sales team directly markets to Tier-1 telecommunications companies in their regions. 7 ● Experienced Management Team. Our Chief Executive Officer and key engineers combined have over 100 years of engineering and production experience in the design and manufacturing of power systems.
We have established offices in emerging markets and currently have presence in Australia, Poland, Romania, and South Africa. Our sales team directly markets to Tier-1 telecommunications companies in their regions. 8 ● Experienced Management Team. Our Chief Executive Officer and key engineers combined have over 100 years of engineering and production experience in the design and manufacturing of power systems.
During 2024, we had a relatively low turnover rate, some of which is related to uncertain employment market and economic conditions. None of our employees are represented by labor unions. We consider our relationships with our employees to be generally satisfactory. In addition, from time to time, we utilize outside consultants or contractors for specific assignments.
During 2025, we had a relatively low turnover rate, some of which is related to uncertain employment market and economic conditions. None of our employees are represented by labor unions. We consider our relationships with our employees to be generally satisfactory. In addition, from time to time, we utilize outside consultants or contractors for specific assignments.
A decade ago, we began delivering compact 3 kW – 15 kW DC power systems for communication and reconnaissance systems thereby improving fuel efficiency of the combat and vehicles when deployed. During the decade we have delivered several configurations of these auxiliary power units to the military, which vary in function from battery charging to supplying power to weapon systems.
A decade ago, we began delivering compact 3 kW – 15 kW DC power systems for communication and reconnaissance systems thereby improving fuel efficiency of the combat and vehicles when deployed. During the decade we have delivered several configurations of these auxiliary power units to the military, which vary in function from battery charging to supplying power to military applications.
This expansion in data transfer and storage has led to an increase in energy needs, which requires efficient power generation equipment that can charge batteries or directly power these systems. 4 A digitized battlefield includes sensors, information processing, data distribution, electronic countermeasures, all requiring with few exceptions, DC power.
This expansion in data transfer and storage has led to an increase in energy needs, which requires efficient power generation equipment that can charge batteries or directly power these systems. 5 A digitized battlefield includes sensors, information processing, data distribution, electronic countermeasures, all requiring with few exceptions, DC power.
We have hired trained personnel in Australia, Romania, and South Africa to assist in regional training of technicians and also in product demonstrations. 13 Competition Within the telecommunications power generation market, we compete with a few manufacturers of AC and DC generators that offer generators with an output power of 5 kW to 50 kW.
We have hired trained personnel in Australia, Romania, and South Africa to assist in regional training of technicians and also in product demonstrations. 14 Competition Within the telecommunications power generation market, we compete with a few manufacturers of AC and DC generators that offer generators with an output power of 5 kW to 50 kW.
In 2013, we further expanded the integration of storage and renewable energy such as solar and wind into our Supra Controller™ software resulting in the shipment of twenty off-grid telecommunications tower power systems to Australia. 9 In 2017 and 2018, we demonstrated our DC hybrid power systems to telecommunications providers in Southeast Asia and Africa.
In 2013, we further expanded the integration of storage and renewable energy such as solar and wind into our Supra Controller™ software resulting in the shipment of twenty off-grid telecommunications tower power systems to Australia. 10 In 2017 and 2018, we demonstrated our DC hybrid power systems to telecommunications providers in Southeast Asia and Africa.
Our telecommunications customers request photovoltaic array structures to withstand winds of 150 mph and 200 mph exceeding the industry standard of 120 mph. ● Shelter . We provide an all-weather light-weight aluminum walk-in shelter that is easy to transport by truck or helicopter. 11 ● Lightning protection .
Our telecommunications customers request photovoltaic array structures to withstand winds of 150 mph and 200 mph exceeding the industry standard of 120 mph. ● Shelter . We provide an all-weather light-weight aluminum walk-in shelter that is easy to transport by truck or helicopter. 12 ● Lightning protection .
We may register patents and trademarks in future to protect our intellectual property rights and enhance our competitive position. 15 Suppliers We attempt to mitigate the adverse effect of component shortages in our business through detail material planning and by qualifying multiple vendor sources for key components and outside processes.
We may register patents and trademarks in future to protect our intellectual property rights and enhance our competitive position. 16 Suppliers We attempt to mitigate the adverse effect of component shortages in our business through detail material planning and by qualifying multiple vendor sources for key components and outside processes.
We believe that the integration of renewable energy and storage batteries are ideal for off-grid remote locations in rural areas worldwide. During 2024, we plan to continue our research and development efforts to further enhance these integrations for remote telecommunications towers in Southeast Asia and Africa.
We believe that the integration of renewable energy and storage batteries are ideal for off-grid remote locations in rural areas worldwide. During 2025, we plan to continue our research and development efforts to further enhance these integrations for remote telecommunications towers in Southeast Asia and Africa.
We generally reimburse regional service providers for the warranty services they perform on our systems. 12 Sales and Marketing Our sales strategy focuses on using our direct sales force to market our DC backup power products to telecommunications providers in the U.S. We use local regional sales managers in the U.S. market to demonstrate our products to Tier-1 telecommunications providers.
We generally reimburse regional service providers for the warranty services they perform on our systems. 13 Sales and Marketing Our sales strategy focuses on using our direct sales force to market our DC backup power products to telecommunications providers in the U.S. We use local regional sales managers in the U.S. market to demonstrate our products to Tier-1 telecommunications providers.
We plan to invest additional capital in software and information systems to integrate aftermarket sales and service with our ERP system to improve post sales customer experience with our products and services. 16 Government Regulations and Environmental Matters Our business operations are subject to certain federal, state, local and foreign laws and regulations.
We plan to invest additional capital in software and information systems to integrate aftermarket sales and service with our ERP system to improve post sales customer experience with our products and services. 17 Government Regulations and Environmental Matters Our business operations are subject to certain federal, state, local and foreign laws and regulations.
In addition to salaries, we also provide a 401(k)-retirement plan, healthcare and insurance benefits, health savings accounts, paid time off, and various services and tools to support our employees’ health and wellness. Our leaders, managers, and eligible employees are provided an opportunity to participate in our stock option plans.
In addition to salaries, we also provide a 401(k)-retirement plan, healthcare and insurance benefits, paid time off, and various services and tools to support our employees’ health and wellness. Our leaders, managers, and eligible employees are provided an opportunity to participate in our stock option plans.
This system is in its final stage of development and upon completion will be marketed to regions that lack electric infrastructure. In 2025, we plan to gradually increase our team of engineers and continue investing into new product development as part of our strategy to diversify our product lines.
This system is in its final stage of development and upon completion will be marketed to regions that lack electric infrastructure. In 2026, we plan to gradually increase our team of engineers and continue investing into new product development as part of our strategy to diversify our product lines.
We continue to invest capital into our sales and marketing efforts to demonstrate our DC power systems to the top Tier-1 wireless telecommunications providers and more than 500 small wireless and cable operators in the U.S. Our goal is to further diversify our customer base.
We continue to invest capital into our sales and marketing efforts to demonstrate our DC power systems to the top Tier-1 wireless telecommunications providers and more than 300 small wireless and cable operators in the U.S. Our goal is to further diversify our customer base.
We established regional offices in Australia, Romania, South Africa and Poland to address global markets. During the past 3 years we have had some significant successes in international marketplace however capital constraints of customers have limited the scale of the deployment.
We established regional offices in Australia, Romania, South Africa and Poland to address global markets. During the past 4 years we have had some significant successes in international marketplace however capital constraints of customers have limited the scale of the deployment.
In 2024, we began to expand our sales and service network for our natural gas generators, targeting Tier-1 telecommunications customers in emerging nations with solar hybrid natural gas generators for off-grid markets. 8 ● Expand renewable solar energy product offerings .
In 2024, we began to expand our sales and service network for our natural gas generators, targeting Tier-1 telecommunications customers in emerging nations with solar hybrid natural gas generators for off-grid markets. 9 ● Expand renewable solar energy product offerings .
Military Since 1979, we have been developing and marketing products to the U.S. military and large defense contractors in the U.S. and international markets. The need for light weight and compact DC power generation systems are vital for military operations and commonly used to charge storage batteries, provide backup emergency power, or provide startup power for aircrafts or weapon systems.
Military Since 1979, we have been developing and marketing products to the U.S. military and large defense contractors in the U.S. and international markets. The need for light weight and compact DC power generation systems are vital for military operations and commonly used to charge storage batteries, provide backup emergency power, or provide startup power for military applications.
During the past decade, digitization of the military accelerated exponentially to support modern information, communication, and weapon systems. The need to process information rapidly has led to digitization of command, control, communications, computers and intelligence across both combat support and service support.
During the past decade, digitization of the military accelerated exponentially to support modern information, communication, and military applications. The need to process information rapidly has led to digitization of command, control, communications, computers and intelligence across both combat support and service support.
We also deliver DC generators that provide prime power for off-grid telecommunications tower sites installed in remote and rural areas where reliability of the power grid is intermittent or not available. Since 2012, the telecommunications market is our largest market segment and contributed over 88% and 95% of our annual revenues in 2024 and 2023, respectively.
We also deliver DC generators that provide prime power for off-grid telecommunications tower sites installed in remote and rural areas where reliability of the power grid is intermittent or not available. Since 2012, the telecommunications market is our largest market segment and contributed approximately 88% and 88% of our annual revenues in 2025 and 2024, respectively.
In 2024, we invested significant engineering resources in development of remote monitoring MCS2020 to remotely monitor and optimize efficiency of our systems and integrate them with other systems such as solar, wind, energy storage systems. During the year significant work was performed to develop electric vehicle charging system for remote locations and roadside assistance.
In the last two years, we invested significant engineering resources in development of remote monitoring MCS2020 to remotely monitor and optimize efficiency of our systems and integrate them with other systems such as solar, wind, energy storage systems. During this period significant work was performed to develop electric vehicle charging system for remote locations and roadside assistance.
To maximize operational life, we incorporate (over and above our competition) the following: ● all aluminum, powder coated, enclosure with stainless hardware, which is lightweight and corrosion resistant; ● 105 C rated signal wire, tinned copper strands; ● stainless steel braided covering hoses for fuel and coolant lines; ● Class 220 C magnet wire for alternator windings; ● watertight connectors in place of terminal strips and other non-sealed connectors; and ● our proprietary Supra Controller™ modules that are environmentally sealed.
To maximize operational life, we incorporate (over and above our competition) the following: ● all aluminum, powder coated, enclosure with stainless hardware, which is lightweight and corrosion resistant; ● 105 C rated signal wire, tinned copper strands; ● stainless steel braided covering hoses for fuel and coolant lines; ● Class 220 C magnet wire for alternator windings; ● watertight connectors in place of terminal strips and other non-sealed connectors; and ● our proprietary Supra Controller™ modules that are environmentally sealed. 11 We believe that the number one reliability issue with a generator set is the failure to start.
To reduce maintenance and help ensure that there is always adequate oil, we increase the engine’s oil capacity to provide for a 4,300-hour (natural gas / propane) or 1,500-hour (diesel) maintenance interval.
To reduce maintenance and help ensure that there is always adequate oil, we increase the engine’s oil capacity to provide for a 4,300-hour (natural gas / propane) or 1,500-hour (diesel) maintenance interval. Standard oil intervals for typical generators range from 200 to 500 hours.
We believe that the number one reliability issue with a generator set is the failure to start. To improve the reliability of our generators, we remove the engine’s starting battery and replace it with a super capacitor. The super capacitor has a 15- to 20-year service life, greater cold cranking amps and withstands greater temperature extremes than conventional starting batteries.
To improve the reliability of our generators, we remove the engine’s starting battery and replace it with a super capacitor. The super capacitor has a 15- to 20-year service life, greater cold cranking amps and withstands greater temperature extremes than conventional starting batteries.
All our products are 100% tested to customer specific application requirements prior to shipment. Throughout our operations we utilize computerized ERP software that integrates all our processes from lead generation to product shipment and aftermarket support.
We utilize 3-D CAD software to product design and document assembly instructions throughout our production process. All our products are 100% tested to customer specific application requirements prior to shipment. Throughout our operations we utilize computerized ERP software that integrates all our processes from lead generation to product shipment and aftermarket support.
Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. The Company has taken action to diversify its sales and reduce inventory to fund operations.
Its ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, its performance and investor sentiment with respect to the Company and its industry. The Company has taken action to diversify sales to consume existing inventory, increase higher margin aftermarket parts revenue, to fund operations.
For the year ended December 31, 2024, the Company recorded a net loss of $4,677 and used cash in operations of $536. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued.
For the year ended December 31, 2025, the Company recorded a net loss of $9,133 and used cash in operating activities of $1,061. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued.
Human Capital Our experienced employees and management team are our most valuable resources, and we are committed to attracting, motivating, and retaining top professionals to service our customers. As of March 31, 2025, we had 82 full time employees, which included 75 employees in the U.S. and 5 employees outside the U.S.
Human Capital Our experienced employees and management team are our most valuable resources, and we are committed to attracting, motivating, and retaining top professionals to service our customers. As of April 15, 2026, we had 67 full time employees, which included 63 employees in the U.S. and 4 employees outside the U.S.
Our ability to continue as a going concern is dependent upon our ability to obtain additional financing, grow and diversify our revenue, improve operational efficiency, reduce overhead and fixed costs, to create a profitable operations.
The total repayment obligation to the Company is $640. Furthermore, the Company’s ability to secure other financing is uncertain. The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional financing, grow and diversify our revenue, improve operational efficiency, reduce overhead and fixed costs, and to create a profitable operation.
Standard oil intervals for typical generators range from 200 to 500 hours. 10 DC Hybrid Power Systems In most off-grid or bad-grid telecommunications tower outdoor applications where DC loads and battery charging is required, generator fuel cost can account for more than 60% of the total operating costs.
DC Hybrid Power Systems In most off-grid or bad-grid telecommunications tower outdoor applications where DC loads and battery charging is required, generator fuel cost can account for more than 60% of the total operating costs. DC Hybrid systems typically include a DC generator and energy storage system to optimize operations.
Army Picatinny Arsenal to design and manufacture an advanced battery and monitoring system for a security device used in nuclear munitions depots around the world. We are currently in the process of obtaining an ISO 9000 certification. Certifications Our DC generator systems comply with UL2200 safety standards.
Army Picatinny Arsenal to design and manufacture an advanced battery and monitoring system for a security device used in nuclear munitions depots around the world. Certifications Our DC generator systems comply with UL2200 safety standards. Our products also comply with applicable regulatory emission standards of the Environmental Protection Agency, and the California Air Quality Management District.
Our focus on safety, quality and on-time delivery is supported by employee training and information systems that monitor process and product quality and communicate trends and findings to senior management on a real-time basis. 14 Design Engineering/Research and Development Our research and development efforts are market driven and are focused on the development of new technologies and product improvements, as well as reducing costs and improving product quality and reliability.
Our focus on safety, quality and on-time delivery is supported by employee training and information systems that monitor process and product quality and communicate trends and findings to senior management on a real-time basis.
During the past five years we have made significant investments to upgrade and customize our information systems to improve productivity and our ability to accurately forecast inventory and manpower requirements.
Information Systems We utilize integrated information systems (i.e., ERP) that link our lead management, sales planning, order entry, purchasing, engineering, production control, manufacturing, inventory and accounting systems. During the past five years we have made significant investments to upgrade and customize our information systems to improve productivity and our ability to accurately forecast inventory and manpower requirements.
Since 2018, we invested in testing and certifying LPG/NG engine manufactured by Toyota which provides over 90,000-hour life which is about four times longer than a non-Toyota equivalent diesel engine. In addition, this product has maintenance cycle every 4,500 hours where equivalent engines require maintenance every 200 to 500 hours.
In a remote prime power site fuel efficiency, maintenance cost and long life, are the competitive differentiators. Since 2018, we invested in testing and certifying LPG/NG engine manufactured by Toyota which provides over 90,000-hour life which is about four times longer than a non-Toyota equivalent diesel engine.
Our Hybrid Systems include battery packs of varying chemistries; however, the market predominantly uses lithium batteries commonly used in electric vehicles. The ability to charge batteries at full power improves fuel efficiency, where charged batteries can then provide continuous or intermittent power without the need to power up the generator.
The ability to charge batteries at full power improves fuel efficiency, where charged batteries can then provide continuous or intermittent power without the need to power up the generator.
Over the past decade, we have made significant investments in highly specialized manufacturing tooling, jigs and fixtures that allow us to manufacture products at lower cost while maintaining the highest quality.
Over the past decade, we have made significant investments in highly specialized manufacturing tooling, jigs and fixtures that allow us to manufacture products at lower cost while maintaining the highest quality. 15 Our production assembly lines are designed to be flexible, and we utilize advanced manufacturing planning software to predict, monitor and control demand levels and product mix to provide the shortest delivery time to our customers.
Our products also comply with applicable regulatory emission standards of the Environmental Protection Agency, and the California Air Quality Management District. Product Warranties The Company provides limited warranties for parts and labor at no cost to its customers within a specified time period after the sale.
Product Warranties The Company provides limited warranties for parts and labor at no cost to its customers within a specified time period after the sale. Our standard warranty on new products is two years from the date of delivery to the customer.
Our warranties are of an assurance-type and come standard with all of our products to cover repair or replacement should a product not perform as expected. Under our standard warranty, provisions for estimated expenses related to product warranties are made at the time products are sold.
We offer a limited extended warranty of up to five years on our certified DC power systems based on application and usage. Our warranties are of an assurance-type and come standard with all of our products to cover repair or replacement should a product not perform as expected.
Our sales backlog as of December 31, 2024, was $1,306, with 53% of that amount being attributable to our largest U.S. telecommunications customer, 3% to other telecommunications customers in the U.S., 35% represented purchases from customers in the military markets, and 9% from marine and other markets.
Our sales backlog as of December 31, 2025 was $4,306, with 82% of that amount being attributable to telecommunications customer, 17% to military customers, 1% to marine customers, and 1% to customers in other markets. Going Concern The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern.
These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and recovery from suppliers. Information Systems We utilize integrated information systems (i.e., ERP) that link our lead management, sales planning, order entry, purchasing, engineering, production control, manufacturing, inventory and accounting systems.
Under our standard warranty, provisions for estimated expenses related to product warranties are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and recovery from suppliers.
They have resulted in disruptions in the supply chain and higher material costs. Delays in international projects has impacted our export markets temporarily, however, we continue to focus on our diversification strategy to expand our market share in the long term.
On December 15, 2025, the stockholders of the Company approved the Polar Power, Inc. 2026 Equity Incentive Plan at the 2025 annual meeting of stockholders of the Company, among other matters. 1 Recent Business Events Delays in international projects has impacted our export markets temporarily, however, we continue to focus on our diversification strategy to expand our market share in the long term.
These orders are part of a growing program to develop broadband services in the South Pacific region. During 2024, 48% of our total net sales were derived from our largest customer, compared to 50% in 2023. During 2024, 8% of our total net sales were derived from customers in the military market, as compared to 3% in 2023.
During 2024, 88% of our total net sales were derived from customers in the telecommunications market, 8% from customers in the military market, 3% from marine customers, and 1% from customers in other markets .
During 2024 and 2023, sales to customers in international markets represented 13% and 21% of our total net sales, respectively. Between 2022 and 2024, we received purchase orders for DC power generators totaling $7.3 million from telecommunications customers in the South Pacific Islands for off-grid applications. We completed shipping these orders in 2024.
During 2025 and 2024, sales to customers in international markets represented 7% and 13% of our total net sales, respectively. During 2025, 88% of our total net sales were derived from customers in the telecommunications market, 8% from customers in the military market, 1% from marine customers, and 1% from customers in other markets.
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Recent Developments On November 24, 2023, the Company received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that the Company’s common stock is subject to potential delisting from the Nasdaq because for a period of 30 consecutive business days, the bid price of the Company’s common stock has closed below the minimum $1.00 per share requirement for continued inclusion under Nasdaq Marketplace Rule 5550(a)(2) (the “Bid Price Rule”).
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Recent Developments On October 6, 2025, the Company entered into an ATM sales agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), pursuant to which the Company may offer and sell, from time to time (the “Offering”) through the Sales Agent, shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), up to a maximum amount as set forth in the Sales Agreement, subject to the terms and conditions of the Sales Agreement.
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The Nasdaq deficiency notice indicated that, in accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company will be provided 180 calendar days, or until May 22, 2024, to regain compliance.
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On October 6, 2025, the Company filed a prospectus supplement to its registration statement on Form S-3 (File No. 333-276705) offering the Shares up to an aggregate offering price of up to $2,382,043.
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If the Company failed to regain compliance with the Bid Price Rule before May 22, 2024 but met all of the other applicable standards for initial listing on The Nasdaq Capital Market with the exception of the minimum bid price, then the Company may be eligible to have an additional 180 calendar days, or until November 18, 2024, to regain compliance with the Bid Price Rule.
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In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern , the Company’s management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying financial statements were issued.
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The Company did not regain compliance with the Bid Price Rule by the end of the initial compliance period but met all of the other applicable listing standards and requested an extension to regain compliance.
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The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company manufactures and assembles its DC power systems at two production facilities located in Gardena, California. It is currently delinquent in rent payments to its landlords for office and warehouse facilities.
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On May 30, 2024, the Company received a letter from Nasdaq notifying the Company that, it had been granted an additional 180 days, or until November 18, 2024, to regain compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market.
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The landlord for its headquarters and manufacturing facility at 249 E. Gardena Blvd., Gardena, California filed a summons for eviction on October 24, 2025. On February 23, 2026, the landlord stopped the actions for eviction and continued discussions with the Company to resolve the delinquent rents and expired lease agreement.
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On November 18, 2024, the Company filed a Certificate of Amendment to Certificate of Incorporation with the Secretary of State of Delaware to effect a 1:7 Reverse Stock Split of its shares of common stock, either issued and outstanding or held by the Company as treasury stock, effective as of 4:05 p.m. (Delaware time) on November 18, 2024.
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The Company expects to be in the position to make significant payment towards the delinquent rents in the near term and/or provide a payment plan mutually agreeable to both parties. The landlord for the other facility for which the Company is delinquent on rent, has not served the Company any legal documents or assessed late fees for the delinquent rent.
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The number of authorized shares of common stock under the certificate of incorporation remains unchanged at 50,000,000 shares. The common stock began trading on a reverse stock split-adjusted basis on The Nasdaq Capital Market November 19, 2024.
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However, they may do so in the future. The Company is also negotiating with this landlord on a payment plan for the delinquent rent. During the first quarter of 2026, the Company paid $206 towards its past due lease obligations reported as of December 31, 2025.
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The trading symbol for the common stock remains “POLA.” The new CUSIP number for the common stock following the Reverse Stock Split is 73102V204. 1 On November 19, 2024, the Company received a new letter from Nasdaq notifying the Company that, as a result of the Company’s failure to regain compliance with the Bid Price Rule by November 18, 2024, Nasdaq determined to delist the Company’s common stock from the Nasdaq Capital Market.
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While the Company is negotiating with both landlords in good faith on payment plans, there is no guarantee that it and the landlords could reach an agreement on a payment plan, or that even if they reached an agreement, the Company could raise sufficient capital to pay the delinquent rent.
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On November 26, 2024, the Company submitted a hearing request to a hearing panel to appeal Nasdaq’s determination, and the hearing request stayed the suspension of the Company’s common stock. The hearing was scheduled to occur on January 23, 2025.
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It is possible that the Company will be forced to vacate from any or all facilities, and if that happens, we might have difficulty locating new headquarters, or new manufacturing or warehouse facilities that are adequate, in a timely manner.
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On December 23, 2024, the Company received a letter from Nasdaq informing the Company that the Company regained compliance with the Bid Price Rule and that the Company was therefore in compliance with the Nasdaq’s listing requirements. Accordingly, the hearing was cancelled and the Company’s securities continue to be listed and traded on the Nasdaq Capital Market.
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Our production could be significantly delayed, access to our inventory could be impaired, and our operations could halt for a significant period of time. 2 Effective September 30, 2020, the Company entered into a loan agreement with Pinnacle (the “Loan Agreement”) which will expire on September 30, 2026.
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On December 27, 2024, the Company issued a press release announcing that it regained compliance with the Bid Price Rule. On December 18, 2023, Peter Gross, a member of the Board of Directors of the Company, resigned as a member of the Board of Directors of the Company (the “Board”). Mr.
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The Loan Agreement, as amended, provides for a revolving credit facility under which Pinnacle may, in its sole discretion upon the Company’s request, make advances to us up to $7,500, subject to certain limitations and adjustments. The Loan Agreement contains certain affirmative and negative covenants.
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Gross, an independent director, served as a member of the audit committee, chair of the compensation committee and chair of the nominating and corporate governance committee of the Board at the time of his resignation. On January 5, 2024, the Company received a notification letter from Nasdaq that due to Mr.
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At December 31, 2025, the Company was not in compliance with the affirmative covenant requiring the Company to attain a minimum Effective Tangible Net Worth greater than $6,000, as the Company attained an Effective Tangible Net Worth of approximately $755 after recording an inventory write-down of $1,967 to adjust the book value of its inventory to its net realizable value, and $455 impairment of right-of-use asset and deposits.
Removed
Gross’ resignation, the Company is no longer in compliance with Nasdaq Listing Rule 5605.
Added
On March 10, 2026, the Company and Pinnacle executed a Notice of Additional Defaults and Forbearance Agreement, in which Pinnacle agrees to forbear from exercising certain rights and remedies under the Loan Agreement and related documents (the “Loan Documents”) arising from the Specified Existing Defaults for the period commencing March 10, 2026, the Effective Date, to July 31, 2026, the Forbearance Termination Date, considering the Company 1) on or prior to the Effective Date, pays Pinnacle the amount of $250, 2) on or prior to the Effective Date, assigns to Pinnacle new Eligible Accounts in the aggregate amount of at least $185, with 85% of the Net Face Amount of such new Eligible Accounts to be applied to reduce the loan obligations, 3) within forty-five (45) days of the Effective Date, reduce the loan obligations by the aggregate amount of $225, which reduction can result from a cash payment or the assignment of sufficient new Eligible Accounts, with 85% of the Net Face Amount of such new Eligible Accounts to be applied towards such reduction amount, 4) does not create any new events of default, 5) pays in full all obligations to Pinnacle by the Termination Date.
Removed
Pursuant to Nasdaq Listing Rule 5605(c)(4), the Company is entitled to a cure period to regain compliance (i) until the earlier of the Company’s next annual shareholders’ meeting or December 18, 2024; or (ii) if the next annual shareholders’ meeting is held before June 17, 2024, then the Company must evidence compliance no later than June 17, 2024.
Added
If the Company timely complies with all terms listed above, and so long as the Forbearance Termination Date has not occurred, Pinnacle agrees that it will re-commence making Advances to the Company in the amount equal to 42.5% of the Net Face Amount of the thereafter arising Eligible Accounts, with the remaining 42.5% of the Net Face Amount of such Eligible Accounts to be applied to reduce the then outstanding obligations.
Removed
On July 25, 2024, the Company’s remaining members of the Board appointed and ratified Mr. Michael G. Field, to serve as a member of the Board, and to assume the position of Mr. Gross as a member of the audit committee, chair of the compensation committee and chair of the nominating and corporate governance committee of the Board.
Added
In March 2026, the Company paid $250 to Pinnacle Bank and timely complied with the requirements under the Forbearance Agreement and commenced taking advances at 42.5% of the Net Face Amount of Eligible Accounts on March 12, 2026.
Removed
On July 30, 2024, the Company issued a press release announcing the appointment of Mr. Field, filling the vacant board seat, and bringing the number of independent directors to three which brings the Company in compliance with Nasdaq Listing Rule 5605.
Added
While the Company expects to stay in compliance and pay the full obligation to Pinnacle by July 31, 2026, there is no guarantee that the Company will be able to do so.
Removed
Recent Business Events The COVID-19 pandemic and recovery, inflation, the impacts of war and other recent geopolitical events have negatively impacted business and industries all over the world. Delays and slowdown in customer programs have had a significant negative impact on our overall operations including revenues, productivity, gross margins, and liquidity.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf the stock is delisted, we may trade on the over-the-counter market, or even in the pink sheets, which would significantly decrease the liquidity of an investment in our common stock. 29 If securities or industry analysts do not publish research or reports or publish inaccurate or unfavorable research or reports about our business, our share price and trading volume could decline.
Biggest changeWhile we have been back in compliance with Nasdaq Listing Rules, there can be no assurance that we will continue to be in compliance with Nasdaq Listing Rules. If the stock is delisted, we may trade on the over-the-counter market, or even in the pink sheets, which would significantly decrease the liquidity of an investment in our common stock.
An increase in global economic outlook may result in significant price increases in the cost of our raw materials. In addition, we use Neodymium permanent magnets in our alternators, for which there are a limited number of global suppliers that can meet our standards.
An increase in global economic outlook may result in significant price increases in the cost of our raw materials. In addition, we use Neodymium permanent magnets in our alternators, for which there are a limited number of global suppliers that can meet our standards.
Increase in manufacturing of electric vehicles worldwide can have an adverse effect on the cost or supply of these magnets. At our current production volumes, we are unable to secure large quantities of these commodities at fixed prices; however, we do have multiple sources of supply for our raw materials to meet our near term forecasted needs.
Increase in manufacturing of electric vehicles worldwide can have an adverse effect on the cost or supply of these magnets. At our current production volumes, we are unable to secure large quantities of these commodities at fixed prices; however, we do have multiple sources of supply for our raw materials to meet our near term forecasted needs.
Some of the risks and challenges of conducting business internationally include: ● the impact of a global crisis such as the COVID-19 pandemic on the global markets and the power generation market within the international telecommunications markets; ● requirements or preferences for domestic products or solutions, which could reduce demand for our products; ● unexpected changes in regulatory requirements; ● imposition of tariffs and other barriers and restrictions; ● restrictions on the import or export of critical technology; 24 ● management communication and integration problems resulting from cultural and geographic dispersion; ● the burden of complying with a variety of laws and regulations in various countries; ● difficulties in enforcing contracts; ● the uncertainty of protection for intellectual property rights in some countries; ● application of the income tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions, to our sales and other transactions, which results in additional complexity and uncertainty; ● tariffs and trade barriers, export regulations and other regulatory and contractual limitations on our ability to sell products; ● greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including export and antitrust regulations, the FCPA and any trade regulations ensuring fair trade practices; ● heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; ● potentially adverse tax consequences, including multiple and possibly overlapping tax structures; ● general economic and geopolitical conditions, including war and acts of terrorism; ● lack of the availability of qualified third-party financing; and ● currency exchange controls.
Some of the risks and challenges of conducting business internationally include: ● the impact of a global crisis such as the COVID-19 pandemic on the global markets and the power generation market within the international telecommunications markets; ● requirements or preferences for domestic products or solutions, which could reduce demand for our products; ● unexpected changes in regulatory requirements; ● imposition of tariffs and other barriers and restrictions; ● restrictions on the import or export of critical technology; 28 ● management communication and integration problems resulting from cultural and geographic dispersion; ● the burden of complying with a variety of laws and regulations in various countries; ● difficulties in enforcing contracts; ● the uncertainty of protection for intellectual property rights in some countries; ● application of the income tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions, to our sales and other transactions, which results in additional complexity and uncertainty; ● tariffs and trade barriers, export regulations and other regulatory and contractual limitations on our ability to sell products; ● greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including export and antitrust regulations, the FCPA and any trade regulations ensuring fair trade practices; ● heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; ● potentially adverse tax consequences, including multiple and possibly overlapping tax structures; ● general economic and geopolitical conditions, including war and acts of terrorism; ● lack of the availability of qualified third-party financing; and ● currency exchange controls.
In addition to the factors discussed in the “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, these factors include, without limitation: ● competition from existing technologies and products or new technologies and products that may emerge; ● the loss of significant customers, including AT&T and Verizon Wireless; ● actual or anticipated variations in our quarterly operating results; ● failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; ● our cash position; ● announcement or expectation of additional financing efforts; ● issuances of debt or equity securities; ● our inability to successfully enter new markets or develop additional products; ● actual or anticipated fluctuations in our competitors’ operating results or changes in their respective growth rates; ● sales of our shares of common stock by us, or our stockholders in the future; ● trading volume of our shares of common stock on The Nasdaq Capital Market; ● market conditions in our industry; ● overall performance of the equity markets and general political and economic conditions; ● introduction of new products or services by us or our competitors; ● additions or departures of key management, scientific or other personnel; 28 ● publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities or industry analysts; ● changes in the market valuation of similar companies; ● disputes or other developments related to intellectual property and other proprietary rights; ● changes in accounting practices; ● significant lawsuits, including stockholder litigation; and ● other events or factors, many of which are beyond our control.
In addition to the factors discussed in the “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, these factors include, without limitation: ● competition from existing technologies and products or new technologies and products that may emerge; ● the loss of significant customers, including AT&T and Verizon Wireless; ● actual or anticipated variations in our quarterly operating results; ● failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; ● our cash position; ● announcement or expectation of additional financing efforts; ● issuances of debt or equity securities; ● our inability to successfully enter new markets or develop additional products; ● actual or anticipated fluctuations in our competitors’ operating results or changes in their respective growth rates; ● sales of our shares of common stock by us, or our stockholders in the future; ● trading volume of our shares of common stock on The Nasdaq Capital Market; ● market conditions in our industry; ● overall performance of the equity markets and general political and economic conditions; ● introduction of new products or services by us or our competitors; ● additions or departures of key management, scientific or other personnel; 32 ● publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities or industry analysts; ● changes in the market valuation of similar companies; ● disputes or other developments related to intellectual property and other proprietary rights; ● changes in accounting practices; ● significant lawsuits, including stockholder litigation; and ● other events or factors, many of which are beyond our control.
However, the current inflationary environment, we believe, has impacted the Company’s business in 2023, to a lesser extent in 2024, and may continue to impact its business in 2025, including as a result of increased energy costs, increase materials costs due to higher tariffs on key components which may not be able to pass to customers as well as increasing wages in the labor markets in which we compete.
However, the current inflationary environment, we believe, has impacted the Company’s business in 2024, to a lesser extent in 2025, and may continue to impact its business in 2025, including as a result of increased energy costs, increase materials costs due to higher tariffs on key components which may not be able to pass to customers as well as increasing wages in the labor markets in which we compete.
The issuance of shares of preferred stock may also have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares. Item 1B. Unresolved Staff Comments. None.
The issuance of shares of preferred stock may also have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares. 37 Item 1B. Unresolved Staff Comments. None.
If our new products and services fail to achieve market acceptance, or if we fail to develop new or enhanced products and services s that achieve market acceptance, our growth prospects, operating results and competitive position could be adversely affected. Natural disasters and other events beyond our control could materially adversely affect us.
If our new products and services fail to achieve market acceptance, or if we fail to develop new or enhanced products and services that achieve market acceptance, our growth prospects, operating results and competitive position could be adversely affected. Natural disasters and other events beyond our control could materially adversely affect us.
During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. 32 Raising additional capital, including through future sales and issuances of our common stock, the exercise of warrants or the exercise of rights to purchase common stock pursuant to our equity incentive plan could result in additional dilution of the percentage ownership of our stockholders, could cause our share price to fall and could restrict our operations.
During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. 36 Raising additional capital, including through future sales and issuances of our common stock, the exercise of warrants or the exercise of rights to purchase common stock pursuant to our equity incentive plan could result in additional dilution of the percentage ownership of our stockholders, could cause our share price to fall and could restrict our operations.
Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. 30 Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. 34 Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
As a result, it is likely that, from time to time, our results of operations or our revenue backlog could fall below historical levels or the expectations of public market analysts and investors, which could cause the trading price of our common stock to decline significantly. 27 Our Chairman, President and Chief Executive Officer owns a significant percentage of our common stock and will exercise significant influence over matters requiring stockholder approval, regardless of the wishes of other stockholders.
As a result, it is likely that, from time to time, our results of operations or our revenue backlog could fall below historical levels or the expectations of public market analysts and investors, which could cause the trading price of our common stock to decline significantly. 31 Our Chairman, President and Chief Executive Officer owns a significant percentage of our common stock and will exercise significant influence over matters requiring stockholder approval, regardless of the wishes of other stockholders.
Any such claims, whether or not successful, would be costly and time-consuming to defend, and could divert management’s attention and seriously damage our reputation and our business. 23 We could be adversely affected by our failure to comply with the laws applicable to our foreign activities, including the U.S. Foreign Corrupt Practices Act and other similar worldwide anti-bribery laws.
Any such claims, whether or not successful, would be costly and time-consuming to defend, and could divert management’s attention and seriously damage our reputation and our business. 27 We could be adversely affected by our failure to comply with the laws applicable to our foreign activities, including the U.S. Foreign Corrupt Practices Act and other similar worldwide anti-bribery laws.
Our failure to protect any of our important intellectual property rights or any litigation that we resort to in order to enforce those rights could materially and adversely affect our business. 26 If we face claims of intellectual property infringement by third parties, we could encounter expensive litigation, be liable for significant damages or incur restrictions on our ability to sell our products and services.
Our failure to protect any of our important intellectual property rights or any litigation that we resort to in order to enforce those rights could materially and adversely affect our business. 30 If we face claims of intellectual property infringement by third parties, we could encounter expensive litigation, be liable for significant damages or incur restrictions on our ability to sell our products and services.
If our supply of raw materials or components is disrupted or our lead times extended, our business, results of operations or financial condition could be materially adversely affected. 22 We manufacture and assemble a majority of our products at two facilities. Any prolonged disruption in the operations of this facility would result in a decline in our sales and profitability.
If our supply of raw materials or components is disrupted or our lead times extended, our business, results of operations or financial condition could be materially adversely affected. 26 We manufacture and assemble a majority of our products at two facilities. Any prolonged disruption in the operations of this facility would result in a decline in our sales and profitability.
The full impact of the such events are not known at this time, but they could have a material adverse impact on our business, financial condition, results of operations, and stock price. 18 We have incurred significant losses in the past and we may incur losses in the future, which may hamper our operations and impede us from expanding our business.
The full impact of such events are not known at this time, but they could have a material adverse impact on our business, financial condition, results of operations, and stock price. 21 We have incurred significant losses in the past and we may incur losses in the future, which may hamper our operations and impede us from expanding our business.
Our decision not to be subject to Section 203 will allow, for example, Arthur D. Sams, our Chairman, President, Chief Executive Officer and Secretary (who beneficially owns approximately 32% of our common stock) to transfer shares in excess of 15% of our voting stock to a third-party free of the restrictions imposed by Section 203.
Our decision not to be subject to Section 203 will allow, for example, Arthur D. Sams, our Chairman, President, Chief Executive Officer and Secretary (who beneficially owns approximately 22% of our common stock) to transfer shares in excess of 15% of our voting stock to a third-party free of the restrictions imposed by Section 203.
A downturn in the demand for our DC power systems within this market could materially and adversely affect our sales and results of operations. 19 We face inventory risk and may be required to write-off additional inventory in the future. We value inventories at the lower of cost or net realizable value.
A downturn in the demand for our DC power systems within this market could materially and adversely affect our sales and results of operations. 22 We face inventory risk and may be required to write-off additional inventory in the future. We value inventories at the lower of cost or net realizable value.
Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation. 31 We incur significant costs as a result of operating as a public company and our management expects to devote substantial time to public company compliance programs.
Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation. 35 We incur significant costs as a result of operating as a public company and our management expects to devote substantial time to public company compliance programs.
Delayed sales or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation. 25 The State of California enacted the California Consumer Privacy Act of 2018, or CCPA, effective on January 1, 2020.
Delayed sales or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation. 29 The State of California enacted the California Consumer Privacy Act of 2018, or CCPA, effective on January 1, 2020.
The COVID-19 pandemic and recovery had a significant negative impact on our business, sales, results of operations and financial condition in 2020 to 2022, but to a lesser extent in 2023 and 2024.
The COVID-19 pandemic and recovery had a significant negative impact on our business, sales, results of operations and financial condition in 2020 to 2022, but to a lesser extent in 2024 and 2025.
The COVID-19 pandemic and recovery has had a widespread and detrimental effect on the global economy, particularly in the U.S. since 2020, but to a lesser extent in 2023 and 2024.
The COVID-19 pandemic and recovery has had a widespread and detrimental effect on the global economy, particularly in the U.S. since 2020, but to a lesser extent in 2024 and 2025.
In that event, the market price for our common stock will likely decline, and you may lose all or part of your investment. 17 Risks Related to Our Business and Industry Going Concern The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern.
In that event, the market price for our common stock will likely decline, and you may lose all or part of your investment. 18 Risks Related to Our Business and Industry Going Concern The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern.
Our Chairman, President, Chief Executive Officer and Secretary, Arthur D. Sams, beneficially owns approximately 32% of our outstanding shares of common stock. Mr.
Our Chairman, President, Chief Executive Officer and Secretary, Arthur D. Sams, beneficially owns approximately 22% of our outstanding shares of common stock. Mr.
During 2024, and 2023, our sales to international customers accounted for 13% and 21%, respectively, of total revenue. We continue to expect that a significant portion of our future revenues will be from international sales to customers in less developed or developing countries.
During 2025, and 2024, our sales to international customers accounted for 7% and 13%, respectively, of total revenue. We continue to expect that a significant portion of our future revenues will be from international sales to customers in less developed or developing countries.
We have established relationships with third-party engine suppliers and other key suppliers from which we source components for our power systems. We purchase standard configurations of engines for our DC power systems and are substantially dependent on timely supply from our key engine suppliers, Yanmar Engines Company, Perkins Engines Company Ltd, and Toyota Corporation.
We have established relationships with third-party engine suppliers and other key suppliers from which we source components for our power systems. We purchase standard configurations of engines for our DC power systems and are substantially dependent on timely supply from our key engine suppliers, Yanmar Engines Company, Toyota Corporation, and Engine Distributors Inc. (for Ford engines).
We have incurred significant losses in the past. For the years ended December 31, 2024 and 2023, we incurred net losses of approximately $4.1 million and $6.5 million, respectively.
We have incurred significant losses in the past. For the years ended December 31, 2025 and 2024, we incurred net losses of approximately $9.1 million and $4.6 million, respectively.
On November 24, 2023, we received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that our common stock is subject to potential delisting from the Nasdaq because for a period of 30 consecutive business days, the bid price of our common stock has closed below the minimum $1.00 per share requirement for continued inclusion under Nasdaq Marketplace Rule 5550(a)(2) (the “Bid Price Rule”).
On November 24, 2023, we received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that our common stock is subject to potential delisting from the Nasdaq because for a period of 30 consecutive business days, the bid price of our common stock has closed below the minimum $1.00 per share requirement for continued inclusion under Nasdaq Marketplace Rule 5550(a)(2) (the “Bid Price Rule”). 33 On November 18, 2024, the Company effected a 1:7 Reverse Stock Split of its shares of common stock.
Terrorist attacks and threats of war may impact all aspects of our operations, revenues, costs and stock price in unpredictable ways. The impacts of war and other geopolitical events, including but not limited to Russia’s invasion of Ukraine and the Hamas-Israel conflict and the resulting war, are difficult to predict.
Terrorist attacks and threats of war may impact all aspects of our operations, revenues, costs and stock price in unpredictable ways. The impacts of war and other geopolitical events, including but not limited to Russia’s invasion of Ukraine and the military conflicts between U.S., Israel, and Iran, are difficult to predict.
If any of these engine suppliers were to fail to provide emissions certified engines in a timely manner or fail to supply engines that meet our quality, quantity or cost requirements, or were to discontinue manufacturing any engines we source from them or discontinue providing any of these engines to us, or the supply chain is interrupted or delayed as a result of a pandemic or unprecedented event, and we were unable to obtain substitute sources in a timely manner or on terms acceptable to us, our ability to manufacture our products could be materially adversely affected. 21 Price increases in some of the key components in our DC power systems could materially and adversely affect our operating results and cash flows.
If any of these engine suppliers or key component suppliers were to fail to provide qualified engines or components in a timely manner or fail to supply engines or components that meet our quality, quantity or cost requirements, or were to discontinue manufacturing any engines or components we source from them or discontinue providing any of these engines or components to us, or the supply chain is interrupted or delayed as a result of a pandemic or unprecedented event, or if suppliers decide stop supplying engines or components due to past due accounts if we do not bring these accounts current or negotiate a payment plan in a timely manner, and we were unable to obtain substitute sources in a timely manner or on terms acceptable to us, our ability to manufacture our products could be materially adversely affected. 25 Price increases in some of the key components in our DC power systems could materially and adversely affect our operating results and cash flows.
The successful development and market acceptance of our products and services depends on a number of factors, including: ● the impact of a global crisis such as the COVID-19 pandemic on the global markets; ● the changing requirements and preferences of the potential customers in our markets; ● the accurate prediction of market requirements, including regulatory issues; ● the timely completion and introduction of new products and services to avoid obsolescence; ● the quality, price and performance of new products and services; ● the availability, quality, price and performance of competing products and services; 20 ● our customer service and support capabilities and responsiveness; ● the successful development of our relationships with existing and potential customers; and ● changes in industry standards.
The successful development and market acceptance of our products and services depends on a number of factors, including: ● the impact of a global crisis such as the COVID-19 pandemic on the global markets; ● the changing requirements and preferences of the potential customers in our markets; ● the accurate prediction of market requirements, including regulatory issues; ● the timely completion and introduction of new products and services to avoid obsolescence; ● the quality, price and performance of new products and services; ● the availability, quality, price and performance of competing products and services; ● our customer service and support capabilities and responsiveness; ● the successful development of our relationships with existing and potential customers; and ● changes in industry standards. 24 We may experience financial or technical difficulties or limitations that could prevent us from introducing new or enhanced products or services.
For the year ended December 31, 2024, we realized a gross profit of approximately $1.9 million, and for the year ended December 31, 2023, we realized a gross profit of approximately $0.7 million. We may incur net and gross losses in the future.
For the year ended December 31, 2025, we realized a gross loss of approximately $3.1 million, and for the year ended December 31, 2024, we realized a gross profit of approximately $1.3 million. We may incur net and gross losses in the future.
The continuation or escalation of events like the war in Russia-Ukraine war or the Hamas-Israel conflict may also disrupt business operations of our suppliers and/or customers, causing supply chain constraints or delayed spending by our customers.
The continuation or escalation of events like the U.S.-Israel-Iran conflict may also disrupt business operations of our suppliers and/or customers, causing supply chain constraints or delayed spending by our customers.
For the year ended December 31, 2024, the Company recorded a net loss of $4,677 and used cash in operations of $536. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued.
For the year ended December 31, 2025, the Company recorded a net loss of $9,133 and used cash in operating activities of $1,061. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued.
If no securities or industry analysts undertake coverage of our company, the trading price for our shares of common stock may be negatively impacted.
We do not have any control over these analysts. If no securities or industry analysts undertake coverage of our company, the trading price for our shares of common stock may be negatively impacted.
The lack of market acceptance of our products or services or our inability to generate sufficient revenues from this development or enhancement to offset their development costs could have a material adverse effect on our business.
Development and enhancement of our products and services will require significant additional investment and could strain our management, financial and operational resources. The lack of market acceptance of our products or services or our inability to generate sufficient revenues from this development or enhancement to offset their development costs could have a material adverse effect on our business.
As of December 31, 2024, we had granted options to purchase an aggregate of 20,002 shares of common stock and issued 23,049 shares of common stock as stock-based compensation to officers, employees and consultants under the 2016 Plan.
As of December 31, 2025, we had granted options to purchase an aggregate of 20,002 shares of common stock, among which 7,144 options had terminated, and issued 25,729 shares of common stock as stock-based compensation to officers, employees and consultants under the 2016 Plan.
Rapid technological changes may prevent us from remaining current with our technological resources and maintaining competitive product and service offerings. The markets in which we and our customers operate are characterized by rapid technological change, especially within the telecommunications market. Significant technological changes could render our existing and potential new products, services and technology obsolete.
The markets in which we and our customers operate are characterized by rapid technological change, especially within the telecommunications market. Significant technological changes could render our existing and potential new products, services and technology obsolete.
The trading market for our shares of common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts.
If securities or industry analysts do not publish research or reports or publish inaccurate or unfavorable research or reports about our business, our share price and trading volume could decline. The trading market for our shares of common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business.
In addition, the COVID-19 pandemic and recovery adversely affected the economies and financial markets of many countries, which may affect our level of indebtedness, our need to generate sufficient cash flows to service our indebtedness and our ability to comply with the covenants contained in the agreements that govern our indebtedness.
The repercussions of COVID-19 and recovery is likely to continue to have, a material and substantial adverse impact on our results of operations, including a decrease in our sales and delays in sourcing raw materials from suppliers. 20 In addition, the COVID-19 pandemic and recovery adversely affected the economies and financial markets of many countries, which may affect our level of indebtedness, our need to generate sufficient cash flows to service our indebtedness and our ability to comply with the covenants contained in the agreements that govern our indebtedness.
We may experience financial or technical difficulties or limitations that could prevent us from introducing new or enhanced products or services. Furthermore, any of these new or enhanced products and services could contain problems that are discovered after they are introduced. We may need to significantly modify the design of these products and services to correct problems.
Furthermore, any of these new or enhanced products and services could contain problems that are discovered after they are introduced. We may need to significantly modify the design of these products and services to correct problems. Rapidly changing industry standards and customer preferences and requirements may impede market acceptance of our products and services.
On December 23, 2024, the Company received a letter from Nasdaq informing the Company that the Company regained compliance with the Bid Price Rule and that the Company is therefore in compliance with the Nasdaq’s listing requirements. Accordingly, the hearing was cancelled and the Company’s securities continue to be listed and traded on the Nasdaq Capital Market.
On December 23, 2024, the Company received a letter from Nasdaq informing the Company that the Company regained compliance with the Bid Price Rule and that the Company is therefore in compliance with the Nasdaq’s listing requirements. Our common stock continues to trade on The Nasdaq Capital Market under the symbol “POLA” at this time.
Engines from Yanmar, Perkins, and Toyota represented approximately 88%, 3%, and 1% of our total engines sold as a component of our DC power systems during 2024, respectively, and represented approximately 62%, 26%, and less than 2% of our total engines sold as components of our DC power systems during 2023, respectively.
Engines from Yanmar Engines Company, Toyota Corporation, and Engine Distributors Inc. (for Ford engines) represented approximately 70%, 7%, and 18% of our total engines sold as a component of our DC power systems during 2025, respectively, and represented approximately 88%, 1%, and 7% of our total engines sold as components of our DC power systems during 2024, respectively.
We also use engines from Isuzu, Kubota and, to a lesser extent, Volvo Penta. In March 2023, we received EPA certification on our 4Y Toyota engine, which is a larger engine model for used on our 20 to 30 kW DC power systems. We do not have any long-term contracts or commitments with any of these suppliers.
We also use engines from Perkins, Isuzu, Kubota and, to a lesser extent, Volvo Penta. We do not have any long-term contracts or commitments with any of these suppliers or other key suppliers from which we source components for our power systems. We currently have past due accounts with many of our key suppliers.
If we are unable to respond successfully to these competitive pressures, we could lose market share, which could have an adverse impact on our results. We cannot assure that we will be able to compete successfully in our markets or compete effectively against current and new competitors as our industry continues to evolve.
If we are unable to respond successfully to these competitive pressures, we could lose market share, which could have an adverse impact on our results.
Our ability to continue as a going concern is dependent upon our ability to obtain additional financing, grow sales, drive further operating efficiencies, reduce expenditures, and ultimately, create profitable operations Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry.
Its ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, its performance and investor sentiment with respect to the Company and its industry. The Company has taken action to diversify sales to consume existing inventory, increase higher margin aftermarket parts revenue, to fund operations.
Removed
In addition, the Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2024, audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.
Added
In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern , the Company’s management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying financial statements were issued.
Removed
The Company has taken action to improve its margins, reduce inventory and reduce overhead expenses.
Added
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company manufactures and assembles its DC power systems at two production facilities located in Gardena, California. It is currently delinquent in rent payments to its landlords for office and warehouse facilities.
Removed
The repercussions of COVID-19 and recovery is likely to continue to have, a material and substantial adverse impact on our results of operations, including a decrease in our sales and delays in sourcing raw materials from suppliers.
Added
The landlord for its headquarters and manufacturing facility at 249 E. Gardena Blvd., Gardena, California filed a summons for eviction on October 24, 2025. On February 23, 2026, the landlord stopped the actions for eviction and continued discussions with the Company to resolve the delinquent rents and expired lease agreement.
Removed
Rapidly changing industry standards and customer preferences and requirements may impede market acceptance of our products and services. Development and enhancement of our products and services will require significant additional investment and could strain our management, financial and operational resources.
Added
The Company expects to be in the position to make significant payment towards the delinquent rents in the near term and/or provide a payment plan mutually agreeable to both parties. The landlord for the other facility for which the Company is delinquent on rent, has not served the Company any legal documents or assessed late fees for the delinquent rent.
Removed
The Nasdaq deficiency letter has no immediate effect on the listing of our common stock, and our common stock continues to trade on The Nasdaq Capital Market under the symbol “POLA” at this time.
Added
However, they may do so in the future. The Company is also negotiating with this landlord on a payment plan for the delinquent rent.
Removed
The Nasdaq notice indicated that, in accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we will be provided 180 calendar days, or until May 22, 2024, to regain compliance.
Added
While the Company is negotiating with both landlords in good faith on payment plans, there is no guarantee that it and the landlords could reach an agreement on a payment plan, or that even if they reached an agreement, they could raise sufficient capital to pay the delinquent rent.
Removed
On May 17, 2024, we submitted a request for an extension of time to meet compliance, and on May 30, 2024, we received a Nasdaq extension letter granting us until November 18, 2024 to meet compliance. On November 11, 2024, we held our annual meeting of stockholders.
Added
It is possible that we will be forced to vacate from any or all facilities, and if that happens, we might have difficulty locating a new headquarters, or new manufacturing or warehouse facilities that are adequate, in a timely manner.
Removed
At the meeting, our stockholders approved an amendment to our Certificate of Incorporation, in substantially the form attached to the proxy statement as Appendix A to allow the Board of Directors to effect, in its discretion prior to December 31, 2024, a reverse stock split of all of our issued and outstanding common stock, par value $0.0001 per share, at a specific ratio, ranging from one-for-three (1:3) to one-for-twenty (1:20), with the timing and ratio to be determined by the Board if effected.
Added
Our production could be significantly delayed, access to our inventory could be impaired, and our operations could halt for a significant period of time. Effective September 30, 2020, the Company entered into an Agreement with Pinnacle which will expire on September 30, 2026.
Removed
On November 11, 2024, our Board approved a reverse stock split at a ratio of one-for-seven (1:7) (the “Reverse Stock Split”). On November 18, 2024, the Company effected a 1:7 Reverse Stock Split of its shares of common stock.
Added
The Loan Agreement, as amended, provides for a revolving credit facility under which Pinnacle may, in its sole discretion upon the Company’s request, make advances to us up to $7,500, subject to certain limitations and adjustments. The Loan Agreement contains certain affirmative and negative covenants.
Removed
On November 19, 2024, the Company received a new letter from Nasdaq notifying the Company that, as a result of the Company’s failure to regain compliance with the Bid Price Rule by November 18, 2024, Nasdaq determined to delist the Company’s common stock from the Nasdaq Capital Market.
Added
At December 31, 2025, the Company was not in compliance with the affirmative covenant requiring the Company to attain a minimum Effective Tangible Net Worth greater than $6,000, as the Company attained an Effective Tangible Net Worth of approximately $755 after recording an inventory write-down of $1,967 to adjust the book value of its inventory to its net realizable value, and $455 impairment of right-of-use asset and deposits.
Removed
On November 26, 2024, the Company submitted a hearing request to a hearing panel to appeal Nasdaq’s determination, and the hearing request stayed the suspension of the Company’s common stock. The hearing was scheduled to occur on January 23, 2025.
Added
On March 10, 2026, the Company and Pinnacle executed a Notice of Additional Defaults and Forbearance Agreement (the “Forbearance Agreement”), in which Pinnacle agrees to forbear from exercising certain rights and remedies under the Loan Documents arising from the Specified Existing Defaults (as defined by the Forbearance Agreement) for the period commencing March 10, 2026, the Effective Date, to July 31, 2026, the Forbearance Termination Date, considering the Company 1) on or prior to the Effective Date, pays Pinnacle the amount of $250, 2) on or prior to the Effective Date, assigns to Pinnacle new Eligible Accounts in the aggregate amount of at least $185, with 85% of the Net Face Amount of such new Eligible Accounts to be applied to reduce the loan obligations, 3) within forty-five (45) days of the Effective Date, reduce the loan obligations by the aggregate amount of $225, which reduction can result from a cash payment or the assignment of sufficient new Eligible Accounts, with 85% of the Net Face Amount of such new Eligible Accounts to be applied towards such reduction amount, 4) does not create any new events of default, 5) pays in full all obligations to Pinnacle by the Forbearance Termination Date.
Removed
On December 27, 2024, the Company issued a press release announcing that it regained compliance with the Bid Price Rule. On December 18, 2023, Peter Gross, a member of the Board of Directors of the Company, resigned as a member of the Board of Directors of the Company. Mr.
Added
If the Company timely complies with all terms listed above by the Forbearance Termination Date, Pinnacle agrees that it will re-commence making advances to the Company in the amount equal to 42.5% of the Net Face Amount of the thereafter arising Eligible Accounts, with the remaining 42.5% of the Net Face Amount of such Eligible Accounts to be applied to reduce the then outstanding obligations.
Removed
Gross, an independent director, served as a member of the audit committee, chair of the compensation committee and chair of the nominating and corporate governance committee of the Board at the time of his resignation. On January 5, 2024, the Company received a notification letter from Nasdaq that due to Mr.
Added
In March 2026, the Company paid $250 to Pinnacle Bank and timely complied with the requirements under the Forbearance Agreement and commenced taking advances at 42.5% of the Net Face Amount of Eligible Accounts on March 12, 2026.
Removed
Gross’ resignation, the Company is no longer in compliance with Nasdaq Listing Rule 5605.
Added
While the Company expects to stay in compliance and pay the full obligation to Pinnacle by July 31, 2026, there is no guarantee that the Company will be able to do so.
Removed
Pursuant to Nasdaq Listing Rule 5605(c)(4), the Company is entitled to a cure period to regain compliance (i) until the earlier of the Company’s next annual shareholders’ meeting or December 18, 2024; or (ii) if the next annual shareholders’ meeting is held before June 17, 2024, then the Company must evidence compliance no later than June 17, 2024.
Added
If the Company is unable to comply with the Forbearance Agreement, or pay the full obligation to Pinnacle by the July 31, 2026, Pinnacle may immediately enforce its claims, rights, liens, and security interests under the Forbearance Agreement and the Loan Documents, including but not limited to, taking possession of its collateral, or any portion thereof, and foreclosing upon its collateral, or any portion thereof, in accordance with the Loan Documents and applicable law. 19 On October 6, 2025, the Company entered into an ATM sales agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), pursuant to which the Company may offer and sell, from time to time (the “ATM Offering”) through the Sales Agent, shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), up to a maximum amount as set forth in the Sales Agreement, subject to the terms and conditions of the Sales Agreement.
Removed
Effective July 25, 2024, we appointed Michael Field as a new member of the Board of Directors of the Company and appointed him, as an independent director, to serve as a member of the audit committee, chair of the compensation committee and chair of the nominating and corporate governance committee of the Board.
Added
The Company filed a prospectus supplement to its registration statement on Form S-3 (File No. 333-276705) offering the Shares up to an aggregate offering price of up to $2,382.
Removed
By admitting Michael Field to the Board of Directors, we are back in compliance with Nasdaq Listing Rule 5605 effective July 25, 2024.
Added
As of December 31, 2025, the Company has sold 166,127 shares of Common Stock in the ATM Offering at a weighted-average price of $4.70 per share, for net proceeds of $757, after deducting commissions to the sales agent and other ATM Offering related expenses of $23.
Removed
While we have been back in compliance with Nasdaq Listing Rules 5550(a)(2) and 5605, there can be no assurance that we will continue to be in compliance with Nasdaq Listing Rule 5550(a)(2), Rule 5605 or other Nasdaq listing rules.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile we have no t had a material cybersecurity incident impact our operations, we face various cyber and other security threats, including attempts to gain unauthorized access to sensitive information and networks; employee threats; virtual and cyber threats to our directors, officers, and employees; threats to the security of our facilities and infrastructure; and threats from terrorist acts or other acts of aggression.
Biggest changeWhile we have not had a material cybersecurity incident impact our operations, we face various cyber and other security threats, including attempts to gain unauthorized access to sensitive information and networks; employee threats; virtual and cyber threats to our directors, officers, and employees; threats to the security of our facilities and infrastructure; and threats from terrorist acts or other acts of aggression.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Shares of our common stock trade on The Nasdaq Capital Market under the symbol “POLA.” As of March 31, 2025, we had 2,511,532 shares of common stock outstanding held of record by approximately 22 stockholders.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Shares of our common stock trade on The Nasdaq Capital Market under the symbol “POLA.” As of April 15, 2026, we had 3,640,159 shares of common stock outstanding held of record by 23 stockholders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

52 edited+45 added−19 removed30 unchanged
Biggest changeComparison of the Years Ended December 31, 2024 and 2023 (in thousands) Year Ended December 31, Dollar Variance Percentage Variance Results as a Percentage of Net Revenues for the Year Ended December 31, Favorable Favorable 2024 2023 (Unfavorable) (Unfavorable) 2024 2023 Net sales $ 13,970 $ 15,293 $ (1,323 ) (9 )% 100.0 % 100.0 % Cost of sales (includes inventory write-downs of $900 and $450, respectively) 12,656 14,598 1,942 13 % 90.6 % 95.5 % Gross profit 1,314 695 619 89 % 9.4 % 4.5 % Sales and marketing expenses 1,010 1,172 162 14 % 7.2 % 7.7 % Research and development expenses 771 1,222 451 37 % 5.5 % 8.0 % General and administrative expenses 3,908 4,291 383 9 % 28.0 % 28.1 % Total operating expenses 5,689 6,685 996 15 % 40.7 % 43.7 % Loss from operations (4,375 ) (5,990 ) 1,615 (27 )% (31.3 )% (39.2 )% Interest and finance costs (649 ) (559 ) (90 ) 16 % (4.6 )% (3.7 )% Other income (expense), net 347 1 346 34600 % 2.5 % 0.0 % Loss before income taxes (4,677 ) (6,548 ) 1,871 (29 )% (33.5 )% (42.8 )% Income tax — — — — — — Net loss $ (4,677 ) $ (6,548 ) $ 1,871 (29 )% (33.5 )% (42.8 )% 38 Net Sales.
Biggest changeComparison of the Years Ended December 31, 2025 and 2024 (in thousands) Year Ended December 31, Dollar Variance Percentage Variance Results as a Percentage of Net Revenues for the Year Ended December 31, Favorable Favorable 2025 2024 (Unfavorable) (Unfavorable) 2025 2024 Net sales $ 6,304 $ 13,970 $ (7,666 ) (55 )% 100.0 % 100.0 % Cost of sales (includes inventory write-downs of $1,967 and $900, respectively) 9,460 12,656 3,196 25 % 150.1 % 90.6 % Gross profit (loss) (3,156 ) 1,314 (4,470 ) (340 )% (50.1 )% 9.4 % Sales and marketing expenses 807 1,010 203 20 % 12.8 % 7.2 % Research and development expenses 646 771 125 16 % 10.2 % 5.5 % General and administrative expenses 3,359 3,908 549 14 % 53.3 % 28.0 % Impairment of right-of-use assets and lease deposits 455 — (455 ) — 7.2 % 0.0 % Total operating expenses 5,267 5,689 422 7 % 83.6 % 40.7 % Loss from operations (8,423 ) (4,375 ) (4,048 ) (93 )% (133.6 )% (31.3 )% Interest and finance costs (720 ) (649 ) (71 ) (11 )% (11.4 )% (4.6 )% Other income (expense), net 10 347 (337 ) (97 )% 0.2 % 2.5 % Loss before income taxes (9,133 ) (4,677 ) (4,456 ) (95 )% (144.9 )% (33.5 )% Income tax — — — — — — Net loss $ (9,133 ) $ (4,677 ) $ (4,456 ) (95 )% (144.9 )% (33.5 )% 43 Net Sales.
However, there can be no assurance that we will be successful in fulfilling such orders and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected in our backlog. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not applicable.
However, there can be no assurance that we will be successful in fulfilling such orders and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected in our backlog. 49 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not applicable.
These stationary systems incorporate photovoltaic and other sources of renewable energy into our DC hybrid power system. Our DC power systems are available in diesel, natural gas, LPG / propane and renewable formats, with diesel, natural gas and propane gas being the predominate formats.
These stationary systems incorporate photovoltaic and other sources of renewable energy into our DC hybrid power system. 39 Our DC power systems are available in diesel, natural gas, LPG / propane and renewable formats, with diesel, natural gas and propane gas being the predominate formats.
In 2024. We demonstrated a microgrid product that can provide 24/7 electric power to a commercial facility. This project was funded by UNHCR a United Nations organization. The product included DC generator, battery storage, AC inverter, solar charge controller and remote monitoring in a single container which can be delivered to any remote location to provide power.
In 2024, we developed a microgrid product that can provide 24/7 electric power to a commercial facility. This project was funded by UNHCR a United Nations organization. The product included DC generator, battery storage, AC inverter, solar charge controller and remote monitoring in a single container which can be delivered to any remote location to provide power.
We plan to develop new configurations of DC power system, battery storage and solar products to optimize the match between our solutions and various application needs. 35 Critical Accounting Policies We believe that the following critical accounting policies, among others, affect our more significant judgment and estimates used in the preparation of our financial statements: Revenue Recognition.
We plan to develop new configurations of DC power system, battery storage and solar products to optimize the match between our solutions and various application needs. 40 Critical Accounting Policies We believe that the following critical accounting policies, among others, affect our more significant judgment and estimates used in the preparation of our financial statements: Revenue Recognition.
See “Risk Factors” commencing on page 17 of this Annual Report on Form 10-K for additional considerations. 37 Results of Operations The tables presented below, which compare our results of operations from one period to another, present the results for each period, the change in those results from one period to another in both dollars and percentage change, and the results for each period as a percentage of net revenues.
See “Risk Factors” commencing on page 18 of this Annual Report on Form 10-K for additional considerations. 42 Results of Operations The tables presented below, which compare our results of operations from one period to another, present the results for each period, the change in those results from one period to another in both dollars and percentage change, and the results for each period as a percentage of net revenues.
Once inventory has been written down, it creates a new cost basis for inventory that may not subsequently written up. 36 Effects of Inflation The impact of inflation and changing prices during 2024 has not been significant on the financial condition or results of operations of our company.
Once inventory has been written down, it creates a new cost basis for inventory that may not subsequently written up. 41 Effects of Inflation The impact of inflation and changing prices during 2025 has not been significant on the financial condition or results of operations of our company.
Our largest customer in each year was a Tier-1 telecommunications customer in the U.S., and our second largest customer in each year was a telecommunications customer outside the U.S. There was no other revenue from customers in excess of 10% of total net sales in either period.
Our largest customer in each year was a Tier-1 telecommunications customer in the U.S., and our second largest customer in 2024 was a telecommunications customer in Puerto Rico. There was no other revenue from customers in excess of 10% of total net sales in either period.
Sources of Liquidity During the year ended December 31, 2024, we funded our operations primarily from cash on hand. As of December 31, 2024, we had working capital of $7,037, as compared to working capital of $11,775 at December 31, 2023.
Sources of Liquidity During the year ended December 31, 2025, we funded our operations primarily from cash on hand. As of December 31, 2025, we had working capital of $(262), as compared to working capital of $7,037 at December 31, 2024.
The amount of backlog represents revenue that we anticipate recognizing in the future, as evidenced by purchase orders and other purchase commitments received from customers, but on which work has not yet been initiated or with respect to which work is currently in progress.
Backlog As of December 31, 2025, we had a backlog of $4,306. The amount of backlog represents revenue that we anticipate recognizing in the future, as evidenced by purchase orders and other purchase commitments received from customers, but on which work has not yet been initiated or with respect to which work is currently in progress.
During those periods, the majority of our sales were of our DC base powers systems. During 2024 and 2023, sales to international customers accounted for 13% and 21% of total revenue, respectively. Sales to military customers during 2024 and 2023 accounted for 8% and 3% of total revenues, respectively.
During those periods, the majority of our sales were of our DC base powers systems. During 2025 and 2024, sales to international customers accounted for 7% and 13% of total revenue, respectively. Sales to military customers during 2025 and 2024 accounted for 8% and 8% of total revenues, respectively.
We continue to search for qualified engineers to join our engineering team and to support our customer diversification efforts. General and Administrative Expenses . Our general and administrative expenses decreased by $383 to $3,908 during 2024, as compared to $4,291 during 2023.
We continue to search for qualified engineers to join our engineering team and to support our customer diversification efforts. General and Administrative Expenses . Our general and administrative expenses decreased by $549 to $3,359 during 2025, as compared to $3,908 during 2024.
During 2024, research and development expenses decreased by $451 to $771, as compared to $1,222 during 2023. The decrease in 2024 is attributed to a decrease in engineering staff during 2024 as compared to 2023. Our research and development efforts during 2024 primarily focused on product customization on new customers orders, our mobile EV chargers, and solar hybrid power systems.
The decrease in 2025 is attributed to a decrease in engineering staff during 2025 as compared to 2024. Our research and development efforts during 2025 primarily focused on product customization on new customers orders, our mobile EV chargers, and solar hybrid power systems.
Backlog at December 31, 2024 was comprised of the following elements: 56% in purchases of DC power systems by telecommunications customers in the U.S., 35% in purchases in military markets, and 9% in purchases by customers in the marine and other markets. We believe the majority of our backlog will be shipped within the next six to twelve months.
Backlog at December 31, 2025 was comprised of the following elements: 82% in purchases of DC power systems by telecommunications customers, 17% in purchases in military markets, and 2% in purchases by customers in the marine and other markets. We believe the majority of our backlog will be shipped within the next six to twelve months.
In 2023, our two largest customers represented 50% and 18% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a telecommunications customer outside the U.S. There was no other revenue from customers in excess of 10% of total net sales in either period.
In 2024, our two largest customers represented 48% and 14% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a telecommunications customer in Puerto Rico. There was no other revenue from customers in excess of 10% of total net sales in either period.
Financial Performance Summary – Year Ended December 31, 2024 Our net sales for the year ended December 31, 2024, were $13,970, as compared to $15,293 for the year ended December 31, 2023. We reported a net loss of $4,677 for 2024, as compared to net loss of $6,548 for 2023.
Financial Performance Summary – Year Ended December 31, 2025 Our net sales for the year ended December 31, 2025, were $6,304, as compared to $13,970 for the year ended December 31, 2024. We reported a net loss of $9,133 for 2025, as compared to net loss of $4,677 for 2024.
We expect our future capital resources will consist primarily of cash on hand, cash generated by operations, drawdowns on our credit facility with Pinnacle Bank and future debt or equity financings, if any. 40 Credit Facility Effective September 30, 2020, we entered into a Loan and Security Agreement, or Loan Agreement, with Pinnacle.
We expect our future capital resources will consist primarily of cash on hand, cash generated by operations, drawdowns on our credit facility with Pinnacle Bank and future debt or equity financing, if any. 47 Credit Facility Effective September 30, 2020, the Company entered into an Loan Agreement with Pinnacle which will expire on September 30, 2026.
During the years ended December 31, 2024 and 2023, 88% and 95%, respectively, of our total net sales were within the telecommunications market. In 2024, our two largest customers represented 48% and 14% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a telecommunications customer outside the U.S.
During the years ended December 31, 2025 and 2024, 88% and 88%, respectively, of our total net sales were within the telecommunications market. In 2025, our largest customer, being a Tier-1 telecommunications in the U.S., represented 65% of our total net sales.
Interest on the portion of the daily balance consisting of advances against inventory accrues interest at a rate of 2.25% above the prime rate per annum, or the Inventory Interest Rate, but in no event will the Inventory Interest Rate be less than 4.75% per annum.
Interest on the portion of the daily balance consisting of advances against inventory accrues interest at a rate of 2.25% above the prime rate, but in no event less than 4.75% per annum (9.0% at December 31, 2025 and 9.75% at December 31, 2024).
During 2024, revenue from telecommunications customers accounted for 88% of total net sales, as compared to 95% of total net sales during 2023. Our two largest customers represented 48% and 14% of our total net sales in 2024, as compared to 50% and 18% in 2023.
During 2025, revenue from telecommunications customers accounted for 88% of total net sales, as compared to 88% of total net sales during 2024. Our largest customer represented 65% of our total net sales in 2025, as compared to our two largest customers that accounted for 48% and 14% in 2024, respectively.
In May 2023, we announced plans to expand our mobile offerings by upgrading our mobile CHAdeMO EV chargers to the universal combined charging system standard to reach the mobile EV charging market. Mobile EV chargers are used for emergency roadside service providing a fast-charging solution for EVs that have run out of charge before reaching a stationary charging facility.
During 2024 and 2025, we worked on upgrading our mobile CHAdeMO EV chargers to the universal combined charging system standard to reach the mobile EV charging market. Mobile EV chargers are used for emergency roadside service providing a fast-charging solution for EVs that have run out of charge before reaching a stationary charging facility.
During 2024 and 2023, sales to the marine and other markets accounted for 4% and 2% of total revenue, respectively. We launched our prime power DC generators incorporating the Toyota 1KS engines optimized for propane, natural gas, and extremely long operational life.
Sales to customers in the marine market accounted for 1% of total net sales during 2025, and 3% in 2024. Sales to customers in other markets represented 3% of total net sales in 2025, and 1% in 2024. We launched our prime power DC generators incorporating the Toyota 1KS engines optimized for propane, natural gas, and extremely long operational life.
On December 31, 2024, and December 31, 2023, our net trade receivables totaled $2,153 and $1,676, respectively. On December 31, 2024, $1,771 (82%) represented the largest open customer account balance, while $1,156 (69%) and $264 (16%) represented the two largest open customer account balances on December 31, 2023.
On December 31, 2025, and December 31, 2024, our net trade receivables totaled $330 and $2,153, respectively. On December 31, 2025, $196 (59%) represented the largest open customer account balance, while $1,771 (82%) represented the largest open customer account balances on December 31, 2024.
As a result of the factors identified above, we generated a net loss of $4,677, or ($1.86) per basic and diluted share, for 2024, as compared to net loss of $6,548, or ($3.45) per basic and diluted share, for 2023, a decrease loss of $1,871.
As a result of the factors identified above, we generated a net loss of $9,133, or ($3.59) per basic and diluted share, for 2025, as compared to net loss of $4,677, or ($1.86) per basic and diluted share, for 2024, representing an increased loss of $4,456.
The decrease was attributable to a slight decrease in sales support staff during 2024 as compared the same period in 2023. We plan to increase our sales force and increase our marketing and tradeshow activities in 2025 to support our diversification strategy and expand our customer base in all market segments. 39 Research and Development Expenses.
We plan to increase our sales force and increase our marketing and tradeshow activities in 2026 to support our diversification strategy and expand our customer base in all market segments. Research and Development Expenses. During 2025, research and development expenses decreased by $125 to $646, as compared to $771 during 2024.
During 2024 and 2023, sales to international customers accounted for 13% and 21% of total revenue, respectively. Sales to military customers during 2024 and 2023 accounted for 8% and 3% of total revenues, respectively. Sales to marine and other markets during 2024 and 2023 accounted for 4% and 2% of total revenue, respectively.
During 2025 and 2024, sales to international customers accounted for 7% and 13% of total revenue, respectively. Sales to military customers during 2025 and 2024 accounted for 8% and 8% of total revenues, respectively. Sales to customers in the marine market accounted for 1% of total revenues in 2025, and 3% in 2024.
In May 2024, the Company received $2,000 of the ERC receivable. Our available capital resources on December 31, 2024, consisted primarily of $498 in cash and cash equivalents, as compared to $549 as of December 31, 2023.
Our available capital resources on December 31, 2025, consisted primarily of $200 in cash and cash equivalents, as compared to $498 as of December 31, 2024.
We plan to continue take proactive steps to manage our operations and mitigate the financial impacts of higher costs, supply chain issues, and geopolitical factors. We have $12.9 million in inventory and completed updating our manufacturing facilities to accommodate three to four times the annual revenue of 2024.
We plan to continue take proactive steps to manage our operations and mitigate the financial impacts of higher costs, supply chain issues, and geopolitical factors.
Interest accrues on the daily balance at a rate of 1.25% above the prime rate, or the Standard Interest Rate, but in no event will the Standard Interest Rate be less than 3.75% per annum.
Borrowings based on receivables bears an interest on the daily balance at a rate of 1.25% above the prime rate, but in no event less than 3.75% per annum (8.0% at December 31, 2025 and 8.75% at December 31, 2024).
These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued.
For the year ended December 31, 2025, the Company recorded a net loss of $9,133 and used cash in operating activities of $1,061. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued.
Our historical results are not necessarily indicative of the results to be expected for any future period, and results for any interim period are not necessarily indicative of the results to be expected for the full year. 34 Overview We design, manufacture, and sell DC power generators, renewable energy and cooling systems for applications primarily in the telecommunications market and, to a lesser extent, in other markets, including military, electric vehicle charging, marine and industrial.
Overview We design, manufacture, and sell DC power generators, renewable energy and cooling systems for applications primarily in the telecommunications market and, to a lesser extent, in other markets, including military, electric vehicle charging, marine and industrial. We are continuously diversifying our customer base and are selling our products into non-telecommunication markets and applications at an increasing rate.
We plan to continually improve our inventory turns to generate cash flow from operations combined with austerity measures on non-essentials overhead to manage cash flow while sales improves. During 2024, we successfully reduced overhead expenses by $996 to improve cash generated through operations.
We plan to continue to market our products globally and expand our customer base in all market segments. We plan to continually improve our inventory turns to generate cash flow from operations combined with austerity measures on non-essentials overhead to manage cash flow while sales improves.
Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis.
We estimate the actual historical warranty claims coupled with an analysis of unfulfilled claims to record a liability for specific warranty purposes. Inventory . Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis.
We also recognize revenue from the rental of equipment. Our rental revenues have not been significant to date and have accounted for less than one percent of total revenues for the years ended December 31, 2024 and 2023. Warranty Costs .
We also recognize revenue from the rental of equipment. Our rental revenues have not been significant to date and have accounted for $nil of total revenues for the years ended December 31, 2025 and 2024. Warranty Costs . We provide limited warranties for parts and labor at no cost to our customers within a specified time period after the sale.
This decrease in net cash used in 2024 was primarily due to a net loss of $4,677, a decrease in ERC receivable of $2,000, a decrease in refundable income taxes of $787, and a decrease in accounts payable of $1,354.
This decrease in net cash used in 2025 was primarily due to a net loss of $9,133, a decrease in proceeds from ERC receivable of $2,000, and a decrease in refundable income taxes of $787. Investing Activities Net cash used in investing activities for 2025 totaled $nil as compared to $19 for 2024, a decrease of $19.
Provisions for estimated expenses related to product warranties are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and recovery from suppliers.
These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and recovery from suppliers. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty costs.
Liquidity, Capital Resources and Going Concern Going Concern The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern. For the year ended December 31, 2024, the Company recorded a net loss of $4,677 and used cash in operations of $536.
Liquidity, Capital Resources and Going Concern Going Concern The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern.
Cost of sales as a percentage of net sales decreased from 95.5% in 2023 to 90.6% in 2024 primarily as a result of a decrease in factory overhead absorption as compared to the same period in 2023.
Cost of sales as a percentage of net sales increased from 90.6% in 2024 to 150.1% in 2025 primarily as a result of an increase in factory overhead absorption as compared to the same period in 2024. Cost of sales includes inventory write-downs of $1,967 in 2025, and $900 in 2024, to adjust inventory to net realizable value.
Most of our sales were of our DC base powers systems during the two years. Cost of Sales . Cost of sales decreased by $1,942 or 13%, to $12,656 during 2024, compared to $14,598 during 2023.
Customers in other markets during 2025 and 2024 accounted for 2% and 1% of total revenue, respectively. Most of our sales were of our DC base powers systems during the two years. Cost of Sales . Cost of sales decreased by $3,196 or 25%, to $9,460 during 2025, compared to $12,656 during 2024.
Our sales backlog as of December 31, 2024, was $1,306, with 53% of that amount being attributable to our largest U.S. telecommunications customer, 3% attributed to other telecommunications customers, 36% to customers in the military markets, and 9% to customers in marine and other markets.
Our sales backlog as of December 31, 2025, was $4,306, with 82% of that amount being attributable to our telecommunications customers, 17% attributed to customers in military markets, 1% to customers in marine market, and 1% in other markets. The Company expects to complete shipment of these orders within the next six to twelve months.
We recognized a gross profit of $1,314 during 2024, as compared to a gross profit of $695 during 2023, which represents an increase in gross profit of $619 or 89%. Gross profit as a percentage of net sales increased to 9.4% in 2024, as compared to 4.5% in 2023.
Gross Profit (Loss) . We recognized a gross loss of $3,156 during 2025, as compared to a gross profit of $1,314 during 2024, which represents a decrease in gross profit of $4,470 or 340%.
As of December 31, 2024, we had availability under the Loan Agreement of $654 and we believe that we are in compliance with the terms and conditions of the Loan Agreement. 41 Cash Flow The following table sets forth the significant sources and uses of cash for the periods set forth below (in thousands): Year Ended December 31, 2024 2023 Net Cash Provided By (Used In): Operating Activities $ (536 ) $ (3,430 ) Investing Activities $ (19 ) $ (194 ) Financing Activities $ 504 $ 3,962 Net increase (decrease) in cash $ (51 ) $ 338 Operating Activities Net cash used in operating activities for 2024 was $536, as compared to $3,430 for the same period in 2023.
Of these amounts, $106 in 2025 and $99 in 2024 were recorded under general and administrative expenses, while $640 in 2025 and $634 in 2024 were recorded under interest expense and finance costs in the accompanying statements of operations. 48 Cash Flow The following table sets forth the significant sources and uses of cash for the periods set forth below (in thousands): Year Ended December 31, 2025 2024 Net Cash Provided By (Used In): Operating Activities $ (1,061 ) $ (536 ) Investing Activities $ - $ (19 ) Financing Activities $ 763 $ 504 Decrease in cash $ (298 ) $ (51 ) Operating Activities Net cash used in operating activities for 2025 was $1,061, as compared to $536 for the same period in 2024.
We offer a limited extended warranty of up to five years on our certified DC power systems based on application and usage. Our warranties are of an assurance-type and come standard with all of our products to cover repair or replacement should product not perform as expected.
Our warranties are of an assurance-type and come standard with all of our products to cover repair or replacement should product not perform as expected. Provisions for estimated expenses related to product warranties are made at the time products are sold.
During 2024, sales to our customers in the U.S. were $12,108, or 87% of total net sales, as compared to 79% in 2023. During 2024, our largest customer represented 48% of our total net sales, as compared to 50% in 2023.
Cost of sales includes inventory write-downs of $1,967 in 2025, and $900 in 2024, to adjust inventory to net realizable value. During 2025, sales to our customers in the U.S. were $6,219, or 93% of total net sales, as compared to $12,108, or 87% in 2024.
The decrease in general and administrative expenses during 2024 was primarily due a decrease in the number of general and administrative staff during 2024, as compared to 2023. Interest and Finance Costs. Our interest expense was $649 in 2024, as compared to $559 in 2023. Our interest expense is primarily from borrowings from our credit facility. Net Loss.
The decrease in general and administrative expenses during 2025 was primarily due a decrease in the number of general and administrative staff during 2025, as compared to 2024. Impairment of right-to-use assets and lease deposits.
The Loan Agreement, provides for a revolving credit facility under which Pinnacle may, in its sole discretion upon our request, make advances to us in an amount, subject to certain limitations and adjustments, of up to (a) 85% of the aggregate net face amount of our accounts receivable and other contract rights and receivables, plus (b) the lesser of (i) 35% of the lower of cost or wholesale market value of certain of our inventory or (ii) $2,500.
The Loan Agreement, as amended, provides for a revolving credit facility under which Pinnacle may, in its sole discretion upon the Company’s request, make advances to us up to $7,500, subject to certain limitations and adjustments. The Loan Agreement contains certain affirmative and negative covenants.
Our ability to continue as a going concern is dependent upon our ability to obtain additional financing, drive further operating efficiencies, reduce expenditures, and ultimately, create profitable operations Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry.
Its ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, its performance and investor sentiment with respect to the Company and its industry. The Company has taken action to diversify sales to consume existing inventory, increase higher margin aftermarket parts revenue, to fund operations.
We provide limited warranties for parts and labor at no cost to our customers within a specified time period after the sale. Our standard warranty on new products is two years from the date of delivery to the customer.
Our standard warranty on new products is two years from the date of delivery to the customer. We offer a limited extended warranty of up to five years on our certified DC power systems based on application and usage.
This $4,738 decrease in working capital is primarily attributable to a $51 decrease in cash and cash equivalents resulting from net cash of $536 used in operating activities, net cash used in investing activities of $19 for the acquisition of new property and equipment, and net cash from financing activities of $504 which includes net proceeds of $559 from our credit facility.
This $7,299 decrease in working capital is primarily attributable to a $298 decrease in cash and cash equivalents resulting from net cash of $1,061 used in operating activities, net cash used in investing activities of $nil, and net cash from financing activities of $763 which includes net proceeds of $757 from sale of the Company’s common shares, net proceeds of $437 from a commercial loan, and proceeds of $330 from borrowings from a related party.
Investing Activities Net cash used in investing activities for 2024 totaled $19, as compared to $194 for 2023, a decrease of $175. Net cash used in investing activities was primarily due to acquisitions of property and equipment.
Net cash used in investing activities in 2024 was primarily due to acquisitions of property and equipment. Financing Activities Net cash provided by financing activities totaled $763 for 2025, as compared to $504 provided by financing activities during 2024, an increase of $259. This cash provided was primarily proceeds from notes payable and shares sold under the ATM facility.
Our international sales were $1,862, or 13% of total net sales in 2024, as compared to $3,216, or 21%, during 2023.
During 2025, sales to our international customer were $415, or 7% of our total net sales, as compared to $1,862, or 13% of total net sales in 2024. We believe economic and geopolitical factors have influenced our customers’ buying decisions, particularly international customers, delaying pushing orders to 2026.
Net sales decreased by $1,323, or 9%, to $13,970 for the year ended December 31, 2024, as compared to $15,293 for the year ended December 31, 2023. The decrease in net sales is primarily due to a decrease in deliveries of our DC power generators to our largest telecommunications customer in the U.S.
Net sales decreased by $7,666, or 55%, to $6,304 for the year ended December 31, 2025, as compared to $13,970 for the year ended December 31, 2024. Net sales to our largest customer decreased approximately 40% from 2024 sales, and international net sales decreased approximately 78% from 2024 sales.
Removed
We are continuously diversifying our customer base and are selling our products into non-telecommunication markets and applications at an increasing rate.
Added
Our historical results are not necessarily indicative of the results to be expected for any future period, and results for any interim period are not necessarily indicative of the results to be expected for the full year.
Removed
Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty costs. We estimate the actual historical warranty claims coupled with an analysis of unfulfilled claims to record a liability for specific warranty purposes. Inventory .
Added
We believe customers delayed projects due to geopolitical factors and economic uncertainties. At December 31, 2025, we had accumulated $3,212 in new purchase orders from our U.S. Tier-1telecommunications customers for delivery in 2026 and $1,093 in new purchase orders from other customers.
Removed
Cost of sales includes inventory write-downs of $900 in 2024, and $450 in 2023, to adjust inventory to net realizable value. During 2024, we saw significant volatility in revenue primarily from our largest customer which greatly affected overall performance.
Added
Gross loss as a percentage of net sales was (50.1)% in 2025, as compared to gross profit as a percentage of net sales of 9.4% in 2024. The gross loss during 2025 was primarily a result of an increase in factory overhead absorption and underutilization of the factory, as well adjustments to inventory net realizable value. Sales and Marketing Expenses.
Removed
We believe the drop in sales is attributed to excess inventory at customer warehouse collected during COVID-19 and customer concerted effort to reduce inventory. We believe the excess inventory has largely been reduced and anticipate normalization in purchases during second half of 2025.
Added
Sales and marketing expenses decreased $203 to $807 during 2025, as compared to $1,010 during 2024. The decrease was attributable to a slight decrease in sales support staff during 2025 as compared the same period in 2024.
Removed
We reached profitability in the second and third quarters of the year with gross margins at 39% and 29%, respectively. We experienced net losses and negative margins in the first and fourth quarter. We believe economic and geopolitical factors continue to influence our customers’ buying patterns.
Added
During 2025, we recorded an impairment charge of $455 of which $347 was related to our right-of-use asset and $108 was related to deposits for leases. Interest and Finance Costs. Our interest expense was $720 in 2025, as compared to $649 in 2024. Our interest expense is primarily from borrowings from our credit facility. 44 Net Loss.
Removed
The Company expects to complete shipment of these orders within the next six to twelve months. We plan to continue to market our products globally and expand our customer base in all market segments.
Added
In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern , the Company’s management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying financial statements were issued.
Removed
We believe we can achieve significant reductions in the cost of sales in 2025 as a percentage of net sales as volumes in production increase. Cost of sales includes inventory write-downs of $900 in 2024, and $450 in 2023, to adjust inventory to net realizable value. Gross Profit .
Added
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company manufactures and assembles its DC power systems at two production facilities located in Gardena, California. It is currently delinquent in rent payments to its landlords for office and warehouse facilities.
Removed
The increase in gross profit during 2024 was primarily because of improved labor efficiencies in manufacturing resulting from higher production volumes primarily during the second and third quarters of 2024. Sales and Marketing Expenses. Sales and marketing expenses decreased $162 to $1,010 during 2024, as compared to $1,172 during 2023.
Added
The landlord for its headquarters and manufacturing facility at 249 E. Gardena Blvd., Gardena, California filed a summons for eviction on October 24, 2025. On February 23, 2026, the landlord stopped the actions for eviction and continued discussions with the Company to resolve the delinquent rents and expired lease agreement.
Removed
In addition, the Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2024, audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.
Added
The Company expects to be in the position to make significant payment towards the delinquent rents in the near term and/or provide a payment plan mutually agreeable to both parties. The landlord for the other facility for which the Company is delinquent on rent, has not served the Company any legal documents or assessed late fees for the delinquent rent.
Removed
The Company has taken action to improve its margins, and is continuing to build a strong back log, and expects to continue investing in product development and sales and marketing activities.
Added
However, they may do so in the future. The Company is also negotiating with this landlord on a payment plan for the delinquent rent.
Removed
At December 31, 2021, we recognized $2,000 related to the ERC for salaries and benefits expenses incurred during 2021 resulting in a refundable tax credit. The ERC assist business owners and their employees by providing an incentive to keep workers on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage.
Added
While the Company is negotiating with both landlords in good faith on payment plans, there is no guarantee that it and the landlords could reach an agreement on a payment plan, or that even if they reached an agreement, they could raise sufficient capital to pay the delinquent rent.
Removed
The Loan Agreement was amended by the First Modification to Loan and Security Agreement on October 7, 2020. The Loan Agreement’s initial term ended on September 30, 2022. On November 3, 2022, we executed the Second Modification to Loan and Security Agreement with Pinnacle for a two-year term with an expiration date of September 30, 2024.
Added
It is possible that we will be forced to vacate from any or all facilities, and if that happens, we might have difficulty locating a new headquarters, or new manufacturing or warehouse facilities that are adequate, in a timely manner.
Removed
On September 23, 2024, the Loan and Security Agreement with Pinnacle was renewed for two years and expires September 30, 2026.
Added
Our production could be significantly delayed, access to our inventory could be impaired, and our operations could halt for a significant period of time. Effective September 30, 2020, the Company entered into an Agreement with Pinnacle which will expire on September 30, 2026.
Removed
The aggregate amount of the outstanding advances under the revolving credit facility were initially limited to $4,000.
Added
At December 31, the Company was not in compliance with the affirmative covenant requiring the Company to attain a minimum Effective Tangible Net Worth greater than $6,000, as the Company attained an Effective Tangible Net Worth of approximately $755 after recording an inventory write-down of $1,967 to adjust the book value of its inventory to its net realizable value, and $455 impairment of right-of-use asset and deposits.

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