Polar Power Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
POLA$0.32-5.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001493152-24-019861
ITEM 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032217
ITEM 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 64 previous paragraphs and 76 current paragraphs.
27 unchanged; 24 reworded; 23 added; 13 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
We believe it is more efficient to build power systems around the DC generator because it is then simpler to integrate it with battery storage and solar photovoltaics which also operate on DC. Many applications in communications, water pumping, lighting, vehicle and vessel propulsion, security systems operate on DC power only. Many micro-grids and energy storage are DC-based and use inverters to convert the DC to AC.
Current report
During the six months ended June 30, 2024 and June 30, 2023, 89% and 96%, respectively, of our total net sales were within the telecommunications market. During the six months ended June 30, 2024, and June 30, 2023, sales to international customers accounted for 20% and 28% of total net sales, respectively; sales to military customers accounted for 10% and 3% of total net sales, respectively; and sales to other customers accounted for 2% and 1% of total net sales, respectively.
Current report
We continue to expand our customer base internationally and across the various markets we service. Sales of our DC power systems to customers in international markets averaged over 20% of total net revenues per annum in the last two years. Prior to this, sales to international customers averaged less than 10% of total revenues per annum. We have several telecommunications customers in the South Pacific region, purchasing our DC generators to develop the telecommunications infrastructure in this region. We believe the implementation and ongoing development of 5G networks along with programs to develop the telecommunications infrastructure in rural and underdeveloped countries will continue to fuel our growth in the telecommunications market over the next five to ten years.
Current report
Solar combined with the Toyota 1KS and 4Y engines along with our alternators and controls offer clean and renewable energy for applications including HVAC, refrigeration, EV charging, peak power shaving, off grid power, and backing up the grid for home and business.
Current report
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. We expect to complete upgrading our EV chargers by the end of the fourth quarter 2024. 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.
Current report
Our sales backlog as of June 30, 2024 was $5,733, of which our telecommunications customers in the U.S. accounted for 79%, customers in military markets accounted for 12%, customers in the marine markets accounted for 7%, and customers in other markets accounted for 2%.
Current report
During the three months ended June 30, 2024, we received approximately $2,900 in tax refunds and Employee Retention Credit (ERC) payments applied for in prior years.
Current report
In July 2024, Michael Field was appointed a director of the Company. Mr. Field joins our Board of Directors and serves in our audit committee, compensation committee and nominating and corporate governance committee of the Board. He is the chair of the compensation committee and chair of the nominating and corporate governance committee of the Board. Mr Field has over four decades of experience in global manufacturing and equipment spanning engineering and technology development, lean manufacturing, factory and systems integration, product management and channel development. He has held key operating and managerial roles and positions both at the divisional and executive levels at UTC Carrier Corporation, PRI Automation and Brooks Automation, and is currently the President and CEO of The Raymond Corporation, which is in the materials handling market.
Current report
Our net sales for the three months ended June 30, 2024 were $4,660, which represents a 17% decrease in net sales as compared to $5,587 for the three months ended June 30, 2023. Our net sales for the six months ended June 30, 2024 were $6,434, which represents a 34% decrease in net sales as compared to $9,777 for the same period in 2023.
Current report
Our net sales for the quarter ended June 30, 2024, increased 163% to $4,660, as compared to $1,775 during the first quarter of 2024. Our Tier-1 telecommunications customers approved shipment of orders they had asked us to hold during the second half of 2023. During the second quarter of 2024, we also completed delivery on ten hybrid power systems to customers in the Solomon Islands with a combined value of $1,165.
Current report
Our total backlog as of June 30, 2024, was $5,733, of which telecommunications customers in the U.S. represented 79%, customers in the military market represented 12%, customers in the marine market represented 7%, and customers in other markets represented 2%. During the six-month period ending June 30, 2024, we received purchased orders totaling $3,814 from customers that are not Tier-1 telecommunications customers.
Current report
We believe we are making significant progress in diversifying our customer base by pursuing opportunities to new markets, such as homes and apartment buildings, electric vehicles and drones, greenhouses, pools, and more, for clean fuel and solar hybrid DC power generation.
Current report
*Net Sales.*Net sales decreased $927, or 17%, to $4,660 for the three months ended June 30, 2024, as compared to $5,587 for the same period in 2023. The decrease in sales was primarily attributed to a shortage in qualified staff to meet production demand. For the three months ended June 30, 2024, sales to our largest telecommunication customer in the U.S. accounted for 40% of our total net sales, our second largest customer being a telecommunications customer in Puerto Rico represented 27% of our total net sales, and our third largest customer being a telecommunications customer in the Solomon Islands represented 22% of our total net sales. For the same period in 2023, 49% of our total net sales were generated from our largest U.S. telecommunications customer, and our second largest customer being a telecommunications customer is Papua New Guinea represented 26% of our total net sales. There was no other revenue from customers in excess of 10% of total net sales in either period.
Current report
*Sales and Marketing Expenses.*During the three months ended June 30, 2024, sales and marketing expenses decreased by $46, or 15%, to $264, as compared to $310 during the same period in 2023. The decrease was attributable to a decrease in sales support staff and travel related expenses during the quarter as compared to the same period in 2023.
Current report
General and Administrative Expenses. General and administrative expenses decreased by $224, or 20%, to $913 during the three months ended June 30, 2024, as compared to $1,137 during same period in 2023. The decrease in general and administrative expenses during the three months ended June 30, 2024 was primarily due to a decrease in general and administrative staff.
Current report
Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Current report
*Net Sales.*Net sales decreased $3,343, or 34%, to $6,434 for the six months ended June 30, 2024, as compared to $9,777 for the same period in 2023. The decrease in sales was primarily attributed to shortages manufacturing staff during the second quarter of 2024, and a slow start in shipments at the beginning of the year as a result of our largest customer asking to postpone shipments during the first quarter. For the six months ended June 30, 2024, sales to our largest telecommunication customer in the U.S. accounted for 42% of our total net sales, our second largest customer being a telecommunications customer in Puerto Rico represented 20% of our total net sales, and our third largest customer being a telecommunications customer in the Solomon Islands represented 16% of our total net sales. For the same period in 2023, 49% of our total net sales were generated from our largest U.S. telecommunications customer, and 26% of our total net sales were generated from our second largest customer being a telecommunications customer in the South Pacific Islands. There was no other revenue from customers in excess of 10% of total net sales in either period.
Current report
Cost of Sales. Cost of sales during the six months ended June 30, 2024 decreased by $2,543, or 34%, to $5,005, as compared to $7,548 during the same period in 2023. Cost of sales as a percentage of net sales during the six months ended June 30, 2024 remained flat at 77.8%, as compared to 77.2% in the same period in 2023.
Current report
*Gross Profit.*Gross profit during the six months ended June 30, 2024 decreased by $800, or 22.2%, to gross profit of $1,429, as compared to gross profit of $2,229 during the same period in 2023. Our gross profit as a percentage of net sales was 22.2% for the six months ended June 30, 2024, as compared to 22.8% in the same period in 2023.
Current report
*Research and Development Expenses.*During the six months ended June 30, 2024, research and development expenses decreased by $269, or 39%, to $415, as compared to $684 during the same period in 2023. The decrease was primarily due to a decrease in research and development support staff and consulting services during the six months ended June 30, 2024, as compared to the same period in 2023. We plan to recruit additional engineers during the second half of 2024 to support growth and our customer diversification efforts.
Current report
General and Administrative Expenses. General and administrative expenses decreased by $208, or 9%, to $2,040 during the six months ended June 30, 2024, as compared to $2,248 during same period in 2023. The decrease in general and administrative expenses during the six months ended June 30, 2024 was primarily due to a decrease in general and administrative staff.
Current report
Interest and Finance Costs. Interest and finance costs for the six months ended June 30, 2024 was $342, as compared to $204 during the same period in 2023, an increase of $138. Our interest expense for the current period resulted primarily from an increase in borrowing from our line of credit with Pinnacle Bank.
Current report
Net cash used in investing activities for the six months ended June 30, 2024 was $18, as compared to net cash used in investing activities of $194 for the same period in 2023. Net cash used in investing activities was primarily due to acquisitions of property and equipment.
Removed paragraphs (13)
Previous report
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.
Previous report
During the first quarter of 2024, we completed one year of successful operation of over three hundred generators powering telecommunication sites in a small island in South Pacific region, where nearly all telecommunication towers are operated by our generators selected for low fuel consumption. We believe high reliability and large fuel savings will result in adoption of our DC generators throughout the region.
Previous report
Expansion of higher power consumption 4G and 5G networks globally has placed emphasis on use of fuel efficient technologies, such as DC generators. In rural, semi-urban applications with poor grid infrastructure, DC generators deliver up to 40% more fuel efficiency when compared to conventional AC generators. We believe, low noise, longer life and higher fuel efficiency of our generators will continue to expand our markets in small urban centers, islands lacking electric infrastructure worldwide.
Previous report
We plan to introduce our upgraded mobile CHAdeMO EV chargers to CCS towards the second half of 2024. Our Mobile EV chargers are designed to provide rapid off-grid charging for electric vehicles.
Previous report
During 2024 we have experienced four consecutive months of sales growth when compared to previous year. During month of April 2024, we received $2.0 million in orders from our telecom customers.
Previous report
Our net sales for the three months ended March 31, 2024 were $1,775, which represents a 58% decrease in net sales as compared to $4,190 for the three months ended March 31, 2023. We reported a net loss of $2,142 for the three months ended March 31, 2024, as compared to a net loss of $1,113 for the same period in 2023. 69% of our net sales for the period ended March 31, 2024 were orders that were placed on hold in the previous year by our Teir-1 telecommunications customers in the U.S. Shipments were released during the first quarter of 2024 as customers authorized shipments. We saw improvements in net sales month-over-month during the quarter, but the bulk of the pending orders were pushed to ship in the following quarter.
Previous report
We received $5.7 million in new purchase orders from customers during the first quarter of 2024, of which 54% represented orders from our telecommunications customer in the U.S., 34% from telecommunications in international markets, and 11% from customers in military markets. Total backlog at March 31, 2024 was $7,700.
Previous report
In recognition of four months of continued growth in sales we plan to hire additional personnel to reduce product lead times.. During our previous quarters we added sales and marketing staff to enhance our customer communications and expand our customer base in all market segments by.
Previous report
*Net Sales.*Net sales decreased $2,415, or 58%, to $1,775 for the three months ended March 31, 2024, as compared to $4,190 for the same period in 2023. The decrease in sales was primarily due delays in shipments to large international customer that has been subsequently resolved and deliveries resumed. During the three months ended March 31, 2024, our two largest customers accounted for 49% and 25% of our total net sales, respectively. During the same period in 2023, our two largest customers accounted for 49% and 27% of our total net sales, respectively. There was no other revenue from customers in excess of 10% of total net sales in either period.
Previous report
Delays in shipments to our two largest customers during the first quarter 2024 resulted in under absorption of factory overhead which negatively affected our cost of sales in the short-term.
Previous report
*Gross Profit (Loss).*We had a gross loss of $402 for the three months ended March 31, 2024, which is a decrease of $1,157, or 153%, as compared to gross profit of $755 during the same period in 2023. The decrease in gross profit for the three months ended March 31, 2024, was primarily a result of excess overhead resulting from the lower net sales during quarter.
Previous report
General and Administrative Expenses. General and administrative expenses was $1,126 for the three months ending March 31, 2024, as compared to $1,111 for the same period in 2023.
Previous report
We did not have any investing activities for the three months ended March 31, 2024 and March 31, 2023.
Reworded paragraphs (24)
Previous wording
All dollar amounts are presented in thousands, except share and per-share data and where otherwise noted.
Current wording
References to the “Company,” “Polar,” “our,” “us” or “we” refer to Polar Power, Inc. All dollar amounts are presented in thousands, except share and per-share data and where otherwise noted.
Previous wording
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.
Current wording
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, 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. The changes in customer diversity are reported in the financial section.
Previous wording
Within the various markets we service, our DC power systems provide reliable and low-cost DC power to service applications that do not have access to the utility grid (i.e., prime power applications) or have critical power needs and cannot be without power in the event of utility grid failure (i.e., back-up power applications).
Current wording
Within the various markets we service, our DC power systems provide reliable and low-cost DC power to service applications that do not have access to the utility grid (i.e., prime power and mobile applications) or have critical power needs and cannot be without power in the event of utility grid failure (i.e., back-up power applications).
Previous wording
Serving these various markets, we offer the following three configurations of our DC power systems, with output power ranging from 5 kW to 50 kW:
Current wording
Serving these various markets, we offer the following configurations of our DC power systems, with output power ranging from 5 kW to 50 kW:
Previous wording
During the three months ended March 31, 2024 and March 31, 2023, 71% and 95%, respectively, of our total net sales were within the telecommunications market. During first quarter 2024, our two largest customers represented 49% and 25% of our total net sales, respectively, one being a Tier-1 telecommunications customer and one being a customer in the military market in the U.S. During the same period in 2023, our two largest customers represented 49% and 27% 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. 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 6% and 27% of total net sales, respectively. Sales to military customers during 2024 and 2023 accounted for 26% and 5% of total net sales, respectively. During 2024 and 2023, sales to marine customers accounted for 3% of total net sales.
Current wording
During the three months ended June 30, 2024 and June 30, 2023, 95% and 97%, respectively, of our total net sales were within the telecommunications market. During the three months ended June 30, 2024, and June 30, 2023, sales to international customers accounted for 25% and 29% of total net sales, respectively; sales to military customers accounted for 3% and 2% of total net sales, respectively; and sales to other customers accounted for 2% and 1% of total net sales, respectively.
Previous wording
We continue to market our prime power DC generators incorporating the Toyota 1KS engines optimized for propane, natural gas, and extremely long operational life. We believe that with the increasing installation restrictions on small diesel engines along with their limited availability due to stringent EPA regulations will force a change towards natural gas and propane (LPG) generators. LPG and natural gas generators are lower in operating cost than diesel powered generators in many areas throughout the world. As our customers transition towards cleaner fuels we anticipate our LPG and natural gas generators will provide strong opportunities for growth and diversification in line with our long-term plan.
Current wording
During 2023, we launched our prime power DC generators incorporating the Toyota 1KS engines optimized for propane, natural gas, and extremely long operational life. We believe that with the increasing installation restrictions on small diesel engines along with their limited availability due to stringent EPA regulations will force a change to natural gas and propane (LPG) generators. LPG and natural gas are lower in cost than diesel fuel in many areas throughout the world. Our new LPG and natural gas generators will provide strong opportunities for growth and diversification in line with our long-term plan.
Previous wording
We market our DC generators for the military, advanced mobility and marine markets as part of our ongoing customer diversification strategy. The military’s increasing use of robotics, drones, and computerization in the field is driving the demand for battery charging with DC generators. Marine sales interest have increased significantly both domestically and overseas due to the increased performance in comfort and fuel economy. Also, there are increasing restrictions on the use of diesel and gasoline engines in many lakes and waterways making way for our natural gas and propane operated generators. Using natural gas and propane for home and office charging for EVs and forklifts is still a market under development. Same is true for diesel mobile chargers for emergency roadside assistance.
Current wording
We also continue to market our DC generators for the military, advanced mobility and marine markets as part of our ongoing customer diversification strategy. The military’s increasing use of robotics, drones, and computerization in the field is driving the demand for battery charging with DC generators. Military sales are advantageous because they typically represent long-term contracts, and they tend to cover the cost of product development. Marine sales interest have increased significantly both domestically and overseas due to the increased performance in comfort and fuel economy. Also, there are increasing restrictions on the use of diesel and gasoline engines in many lakes and waterways making way for our natural gas and propane operated generators. Using natural gas and propane for home and office charging for electric vehicle and forklifts is still a market under development. Same is true for diesel mobile chargers for emergency roadside assistance.
Previous wording
The impact of inflation and rapidly changing prices has not impacted our operations during the three months ended March 31, 2024. Rapid changes in the global economy may cause significant spikes in inflation which may have an impact in our financial condition during 2024 and beyond. Very small portion of our sales is a result of fixed contracts thereby resulting in negligible impact on our gross profits.
Current wording
The impact of inflation and rapidly changing prices has not impacted our operations during the three and six months ended June 30, 2024. Rapid changes in the global economy may cause significant spikes in inflation which may have an impact in our financial condition during 2024 and beyond. Very small portion of our sales is a result of fixed contracts thereby resulting in negligible impact on our gross profits.
Previous wording
Net sales to telecommunications customers in the U.S. accounted for 65% of our total net sales for the three months ended March 31, 2024, as compared to 68% for the same period in 2023. Our international sales represented 6% of our net sales in 2024, as compared to 27% in international sales in 2023.
Current wording
Net sales to telecommunications customers in the U.S. accounted for 70% of our total net sales for the three months ended June 30, 2024, as compared to 68% for the same period in 2023. Our international sales represented 25% of our total net sales for the three months ended June 30, 2024, as compared to 29% in international sales in the same period in 2023.
Previous wording
Cost of Sales. Cost of sales during the three months ended March 31, 2024 decreased by $1,258, or 37%, to $2,177, as compared to $3,435 during the same period in 2023. Cost of sales as a percentage of net sales during the three months ended March 31, 2024 increased to 122.6% as compared to 82.0% in the same period in 2023. The decrease in cost of sales was primary attributable to lower volumes of productions when compared to 2023. The increase in cost of sales as a percentage of net sales during 2024 is a result of an increase in factory overhead absorption as compared to the same period in 2023.
Current wording
Cost of Sales. Cost of sales during the three months ended June 30, 2024 decreased by $1,284, or 31%, to $2,828, as compared to $4,112 during the same period in 2023. Cost of sales as a percentage of net sales during the three months ended June 30, 2024 decreased to 60.7% as compared to 73.6% in the same period in 2023 primarily as a result of a decrease in factory overhead absorption as compared to the same period in 2023.
Previous wording
Our gross loss as a percentage of net sales was 22.6% for the quarter ended March 31, 2024, as compared to a gross profit as a percentage of net sales of 18.0% in the same period in 2023.
Current wording
*Gross Profit.*We had a gross profit of $1,832 for the three months ended June 30, 2024, which is an increase of $357 or 24%, as compared to gross profit of $1,475 during the same period in 2023. The increase in gross profit for the three months ended June 30, 2024 was primarily a result of improved labor efficiencies in manufacturing and utilization of $109 of previously written off obsolete inventory. Our gross profit as a percentage of net sales was 39.3% for the quarter ended June 30, 2024, as compared to a gross profit as a percentage of net sales of 26.4% in the same period in 2023.
Previous wording
*Research and Development Expenses.*During the three months ended March 31, 2024, research and development expenses decreased by $126 or 36%, to $220, as compared to $346 during the same period in 2023. The decrease in research and development expenses resulted from a decrease in engineering staff during the period ended March 31, 2024. We plan to recruit additional engineers during 2024 to support new product developments and our customer diversification efforts.
Current wording
*Research and Development Expenses.*During the three months ended June 30, 2024, research and development expenses decreased by $143, or 42%, to $195, as compared to $338 during the same period in 2023. The decrease was primarily due to a decrease in research and development support staff and consulting services during the three months ended June 30, 2024 as compared to the same period in 2023. We plan to recruit additional engineers during 2024 to support new product developments and our customer diversification efforts.
Previous wording
Interest and Finance Costs. Interest expense for the three months ended March 31, 2024 was $163, as compared to $78 during the same period in 2023. The $85 increase in interest expense resulted primarily from an increase in borrowing from our line of credit with Pinnacle Bank.
Current wording
Interest and Finance Costs. Interest expense for the three months ended June 30, 2024 was $179, as compared to $126 during the same period in 2023. Our interest expense for the current period resulted primarily from an increase in borrowing from our line of credit with Pinnacle Bank.
Previous wording
*Net Loss.*As a result of the factors identified above, we reported net loss of $2,142, or $(0.12) per basic and diluted share, for the three months ended March 31, 2024, as compared to net loss of $1,113, or $(0.09) per basic and diluted share, for the same period in 2023.
Current wording
*Net Profit (Loss).*As a result of the factors identified above, we reported net profit of $501, or $0.03 per basic and diluted share, for the three months ended June 30, 2024, as compared to net loss of $436, or $(0.03) per basic and diluted share, for the same period in 2023.
Previous wording
*Sales and Marketing Expenses.*During the three months ended March 31, 2024, sales and marketing expenses decreased by $102, or 31%, to $231, as compared to $333 during the same period in 2023. The decrease was attributable to a slight decrease in sales support staff during 2024 as compared to the same period in 2023. We plan to increase our sales force and increase our marketing and tradeshow activities in 2024 to support our diversification strategy and expand our customer base in all market segments.
Current wording
*Sales and Marketing Expenses.*During the six months ended June 30, 2024, sales and marketing expenses decreased by $148, or 23%, to $494, as compared to $642 during the same period in 2023. The decrease was attributable to a decrease in sales support staff and travel related expenses. We plan to expand our marketing efforts by adding staff and product demonstrations to support our diversification strategy and expand our customer base in all market segments.
Previous wording
During the three months ended March 31, 2024, we funded our operations primarily from cash on hand. As of March 31, 2024, we had working capital of $9,668, as compared to working capital of $11,775 at December 31, 2023. This $2,107 decrease in working capital is primarily attributable to $337 decrease in cash and cash equivalents resulting from net cash of $989 used in operating activities, and net cash of $nil used in investing activities, and net cash of $652 from financing activities.
Current wording
During the six months ended June 30, 2024, we funded our operations primarily from cash on hand. As of June 30, 2024, we had working capital of $10,153, as compared to working capital of $11,775 at December 31, 2023. This $1,622 decrease in working capital is primarily attributable to $570 increase in cash and cash equivalents resulting from net cash of $190 provided by operating activities, and net cash of $18 used in investing activities, and net cash of $398 from financing activities.
Previous wording
On March 31, 2024 and December 31, 2023, our net trade receivables totaled $1,282 and $1,676, respectively. On March 31, 2024, $902 (70%) and $134 (10%) represented the two largest open customer account balances, while$1,156 (69%) and $264 (16%) represented the two largest open customer account balances on December 31, 2023.
Current wording
On June 30, 2024 and December 31, 2023, our net trade receivables totaled $2,310 and $1,676, respectively. On June 30, 2024, $1,845 (80%), and $287 (12%) represented the two largest open customer account balances, while $1,156 (69%) and $264 (16%) represented the two largest open customer account balances on December 31, 2023.
Previous wording
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. As of March 31, 2024, the ERC is still being processed by the IRS.
Current wording
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. In May 2024, we received $2,000 of the ERC receivable.
Previous wording
Our available capital resources on March 31, 2024 consisted primarily of $212 in cash and cash equivalents, as compared to $549 as of December 31, 2023. We expect our future capital resources will consist primarily of cash on hand, cash generated by operations, if any, drawdowns on our credit facility with Pinnacle Bank and future debt or equity financings, if any.
Current wording
Our available capital resources on June 30, 2024 consisted primarily of $1,119 in cash and cash equivalents, as compared to $549 as of December 31, 2023. We expect our future capital resources will consist primarily of cash on hand, cash generated by operations, if any, drawdowns on our credit facility with Pinnacle Bank and future debt or equity financings, if any.
Previous wording
We have an outstanding balance of $4,914 under the Loan Agreement at March 31, 2024. As of March 31, 2024, we had availability under the Loan Agreement of $216 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.
Current wording
We have an outstanding balance of $4,683 under the Loan Agreement at June 30, 2024. As of June 30, 2024, we had availability under the Loan Agreement of $643 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.
Previous wording
The following table sets forth the significant sources and uses of cash for the three-month periods set forth below:
Current wording
The following table sets forth the significant sources and uses of cash for the six-month periods set forth below:
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024 was $989 as compared to net cash used in operating activities of $1,156 for the same period in 2023. This decrease in net cash used in 2024 was primarily due to a net loss of $2,142, a decrease in accounts payable of $583, while an increase in cash was provided by an increase in customer deposits of $927, and a decrease in accounts receivable of $394, and a decrease in inventory of $301.
Current wording
Net cash provided by operating activities for the six months ended June 30, 2024 was $190 as compared to net cash used in operating activities of $2,804 for the same period in 2023. This increase in net cash provided in 2024 was primarily due to a net loss of $1,641, a decrease in ERC receivable of $2,000, a decrease in refundable income taxes of $787, and a decrease in accounts receivable of $1,165.
Previous wording
Net cash provided by financing activities totaled $652 for the three months ended March 31, 2024, as compared to $1,064 provided by financing activities during the same period in 2023. This cash provided was primarily borrowings from the line of credit with Pinnacle Bank.
Current wording
Net cash from financing activities totaled $398 for the six months ended June 30, 2024, as compared to $3,079 used by financing activities during the same period in 2023. This cash provided was primarily borrowings from the line of credit with Pinnacle Bank.
Previous wording
As of March 31, 2024, we had a backlog of $7,700. 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 at March 31, 2024, was comprised of the following elements: 40% in purchases of DC power systems by telecommunications customers in the U.S., 50% in purchases by telecommunications customers outside the U.S., 8% in purchases by customers in the military markets, and 2% in purchases by customers in other markets. We believe the majority of our backlog will be shipped within the next six to twelve months.
Current wording
As of June 30, 2024, we had a sales backlog of $5,733. 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 at June 30, 2024 was comprised of the following elements: 79% in purchases of DC power systems by telecommunications customers, 11% in purchases from customers in the military market, 7% in purchases from customers in the marine market, and 2% in purchases by customers from other markets. Of the total backlog, 86% of the purchases are from customers in the U.S. and 14% from customers in international markets. We believe the majority of our backlog will be shipped within the next twelve months. 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.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Net sales to telecommunications customers in the U.S. accounted for 69% of our total net sales for the six months ended June 30, 2024, as compared to 68% for the same period in 2023. Our international sales represented 20% of our net sales for the six months ended June 30, 2024, as compared to 28% in international sales in the same period in 2023.
Current report — wording carried from elsewhere
*Net Loss.*For the six months ended June 30, 2024, we incurred net loss of $1,641, or $(0.09) per basic and diluted share, as compared to net loss of $1,549, or $(0.12) per basic and diluted share for the six months ended June 30, 2023.