Polar Power, Inc.
For the period ended Sep 30, 2025. Filed Nov 19, 2025.
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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.
Sep 30, 2025 · Filed Nov 19, 2025
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 2025-06-30; filed 2025-08-14.
0001641172-25-023986
ITEM 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-19.
0001493152-25-024286
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 80 previous paragraphs and 90 current paragraphs.
33 unchanged; 43 reworded; 14 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 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 (14)
Current report
In 2025, in collaboration with ZQuip, a part of Moog Inc., we designed a DC hybrid power system tailored for construction equipment. The new model is designed for charging electric construction vehicles and ZQuip battery modules or integrated as part of a hybrid AC generator. It addresses the need to reduce emissions, noise, and operational costs at both urban and remote construction sites. This modular DC charger can be used in stationary equipment or as a range extender when installed on mobile off-highway equipment. The modules can be quickly detached for off-line servicing, maximizing equipment uptime.
Current report
We manufacture and assemble our DC power systems at two production facilities located in Gardena, California. We are currently delinquent in rent payments to our landlords for office and warehouse facilities. The landlord for our headquarters and manufacturing facility at 249 E. Gardena Blvd., Gardena, California filed a summons for eviction on October 24, 2025. We are negotiating with this landlord on a payment plan for the delinquent rent, and expect to come to a mutually agreeable outcome, which, at this time, such amicable proposal provides that the Company shall agree to pay the delinquent rent by February 28, 2026, and the landlord shall, in consideration of such agreement, release and settle the claim for eviction. Our landlord for the other facility for which we are delinquent on rent, has not served us any legal documents or assessed late fees for the delinquent rent. However, they may do so in the future. We are also negotiating with this landlord on a payment plan for the delinquent rent. While we are negotiating with both landlords in good faith on payment plans, there is no guarantee that we and the landlords could reach an agreement on a payment plan, or that even if we reached an agreement, we could raise sufficient capital to pay the delinquent rent. 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. Our production could be significantly delayed, access to our inventory could be impaired, and our operations could halt for a significant period of time.
Current report
Effective September 30, 2020, the Company entered into an Agreement with Pinnacle which will expire on September 30, 2026. 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. At September 30, 2025, the Company was not in compliance with the affirmative covenant requiring all taxes including unsecured property taxes to be paid in full before becoming delinquent, of which the Company has a delinquent balance of $29. The Company was also 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 a Tangible Net Worth of $3,405 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 deposit. While the Company expects to regain compliance, there is no guarantee that the Company will be able to do so. Further, Pinnacle, as of October 21, 2025, pursuant to the terms of the Loan Agreement, lowered the valuation on certain of the Company’s inventory. As a result of the reduction in the valuation of certain of the Company’s inventory, the Company has an over-advance of $480 at October 21, 2025, and therefore, pursuant to the terms of the Loan Agreement, Pinnacle is permitted take certain actions, including the creation of reserves against amounts that would be available for borrowing or the reduction of its advance rates without declaring an event of default on the facilities, if it determines, in its good faith credit judgment that such reserves are necessary. We are in current discussions with Pinnacle and negotiating with them in good faith on these terms, and expect to come to a mutually agreeable outcome, which, at this time, we believe will provide that Pinnacle will accept certain amounts we expect to receive in purchase orders over the next few months ($325 by December 15, 2025), provided that if such purchase orders are not fulfilled, $325 will be due in December, regardless, and in each case the balance outstanding ($155) will be due by January 15, 2026. While the Company believes it has a good working relationship with Pinnacle, Pinnacle could seek other remedies against the Company pursuant to the Loan Agreement or terminate the Loan Agreement. If the Company is unable to comply with the Loan Agreement, or amendments if applicable, the Company may lose its financing with Pinnacle.
Current report
Our sales backlog as of November 19, 2025 was $5,283, of which our telecommunications customers accounted for 53%, customers in military markets accounted for 13%, customers in the marine market accounted for 1%, and our customer for mobile EV chargers accounted for 33%.
Current report
On October 6, 2025, we entered into an ATM sales agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), pursuant to which we may offer and sell, from time to time through the Sales Agent, shares (the “Shares”) of our common stock, par value $0.0001 per share, up to a maximum amount as set forth in the Sales Agreement, subject to the terms and conditions of the Sales Agreement. On October 6, 2025, we 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.
Current report
As of November 19, 2025, we sold 147,144 Shares pursuant to the Sales Agreement at an average price per share of approximately $5.00 resulting in approximately $714 in net proceeds to us after deducting commissions.
Current report
With a major tier 1 customer, Polar has had a fixed cost, 3 year pricing contract that allowed material cost increases but did not allow material cost increases due to tariffs. This negatively impacted on our profit margines. Contract expires in December 2025 and is currently in negotiation. Expectation is an increase in profit margin while still absorbing some of the tariff costs.
Current report
In recent months, we received approximately $850 in new orders from our domestic telecommunications customers for delivery in the next few months. In October 2025, we secured a military contract for $674 for lightweight and compact DC generators for mobile applications. In November 2025, we received a purchase order in the amount of $1,700 for our mobile electric vehicle chargers. Our backlog as of November 19, 2025 is $5,283.
Current report
Impairment of right-of-use assets and lease deposits. During the three months ended September 30, 2025, we recorded an impairment charge of $455 of which $347 was related to our lease right-of-use asset and $108 was related to deposits for leases.
Current report
Impairment of right-of-use assets and lease deposits. During the nine months ended September 30, 2025, we recorded an impairment charge of $455 of which $347 was related to our lease right-of-use asset and $108 was related to deposits for leases.
Current report
We manufacture and assemble our DC power systems at two production facilities located in Gardena, California. We are currently delinquent in rent payments to our landlords for office and warehouse facilities. The landlord for our headquarters and manufacturing facility at 249 E. Gardena Blvd., Gardena, California filed a summons for eviction on October 24, 2025, which, at this time, such amicable proposal provides that the Company shall agree to pay the delinquent rent by February 28, 2026, and the landlord shall, in consideration of such agreement, release and settle the claim for eviction. We are negotiating with this landlord on a payment plan for the delinquent rent. Our landlord for the other facility for which we are delinquent on rent, has not served us any legal documents or assessed late fees for the delinquent rent. However, they may do so in the future. We are also negotiating with this landlord on a payment plan for the delinquent rent. While we are negotiating with both landlords in good faith on payment plans, there is no guarantee that we and the landlords could reach an agreement on a payment plan, or that even if we reached an agreement, we could raise sufficient capital to pay the delinquent rent. 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. Our production could be significantly delayed, access to our inventory could be impaired, and our operations could halt for a significant period of time.
Current report
Effective September 30, 2020, the Company entered into an Agreement with Pinnacle which will expire on September 30, 2026. 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. At September 30, 2025, the Company was not in compliance with the affirmative covenant requiring all taxes including unsecured property taxes to be paid in full before becoming delinquent, of which the Company has a delinquent balance of $29. The Company was also 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 a Tangible Net Worth of $3,405 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 lease deposits. While the Company expects to regain compliance, there is no guarantee that the Company will be able to do so. Further, Pinnacle, as of October 21, 2025, pursuant to the terms of the Loan Agreement, lowered the valuation on certain of the Company’s inventory. As a result of the reduction in the valuation of certain of the Company’s inventory, the Company has an over-advance of $480 at October 21, 2025, and therefore, pursuant to the terms of the Loan Agreement, Pinnacle is permitted take certain actions, including the creation of reserves against amounts that would be available for borrowing or the reduction of its advance rates without declaring an event of default on the facilities, if it determines, in its good faith credit judgment that such reserves are necessary. We are in current discussions with Pinnacle and negotiating with them in good faith on these terms, and expect to come to a mutually agreeable outcome, which, at this time, we believe will provide that Pinnacle will accept certain amounts we expect to receive in purchase orders over the next few months ($325 by December 15, 2025), provided that if such purchase orders are not fulfilled, $325 will be due in December, regardless, and in each case the balance outstanding ($155) will be due by January 15, 2026. While the Company believes it has a good working relationship with Pinnacle, Pinnacle could seek other remedies against the Company pursuant to the Loan Agreement or terminate the Loan Agreement. If the Company is unable to comply with the Loan Agreement, or amendments if applicable, the Company may lose its financing with Pinnacle.
Current report
On September 30, 2025, we recorded an inventory write-down of $1,967 to adjust our inventory to net realizable value, and an impairment of $455 related to the right-of-use asset and lease deposits on rents currently in delinquent status.
Current report
Effective September 30, 2020, the Company entered into an Agreement with Pinnacle which will expire on September 30, 2026. 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. At September 30, 2025, the Company was not in compliance with the affirmative covenant requiring all taxes including unsecured property taxes to be paid in full before becoming delinquent, of which the Company has a delinquent balance of $29. The Company was also 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 a Tangible Net Worth of $3,405 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 lease deposits. While the Company expects to regain compliance, there is no guarantee that the Company will be able to do so. Further, Pinnacle, as of October 21, 2025, pursuant to the terms of the Loan Agreement, lowered the valuation on certain of the Company’s inventory. As a result of the reduction in the valuation of certain of the Company’s inventory, the Company has an over-advance of $480 at October 21, 2025, and therefore, pursuant to the terms of the Loan Agreement, Pinnacle is permitted take certain actions, including the creation of reserves against amounts that would be available for borrowing or the reduction of its advance rates without declaring an event of default on the facilities, if it determines, in its good faith credit judgment that such reserves are necessary. We are in current discussions with Pinnacle and negotiating with them in good faith on these terms, and expect to come to a mutually agreeable outcome, which, at this time, we believe will provide that Pinnacle will accept certain amounts we expect to receive in purchase orders over the next few months ($325 by December 15, 2025), provided that if such purchase orders are not fulfilled, $325 will be due in December, regardless, and in each case the balance outstanding ($155) will be due by January 15, 2026. While the Company believes it has a good working relationship with Pinnacle, Pinnacle could seek other remedies against the Company pursuant to the Loan Agreement or terminate the Loan Agreement. If the Company is unable to comply with the Loan Agreement, or amendments if applicable, the Company may lose its financing with Pinnacle.
Removed paragraphs (4)
Previous report
During the second half of 2025, we plan to hire sales and marketing staff to continue to market our products globally and expand our customer base in all market segments. We also plan to continue to be proactive in managing our operations and mitigate the financial impacts of higher costs, supply chain issues, and geopolitical factors.
Previous report
Effective September 30, 2020, we entered into a Loan and Security Agreement (the “Loan Agreement”) with Pinnacle Bank (“Pinnacle”). Before the Loan Agreement was set to expire in September 2024, the Company and Pinnacle executed an amendment to extend the term of the Loan Agreement until September 30, 2026.
Previous report
The Loan Agreement, as amended, provides for a revolving credit facility under which Pinnacle may, in its sole discretion upon our request, make advances to the Company up to $7,500, subject to certain limitations and adjustments, of up to (a) 85% of the aggregate net face amount of the Company’s accounts receivable and other contract rights and receivables, plus (b) the lesser of (i) 40% of the aggregate eligible inventory value of eligible inventory or (ii) $4.0 million, plus (c) up to $146 collateralized by certain equipment. Additionally, the inventory advances limit shall decrease as the Company’s effective Tangible Net Worth diminishes at ranges provided in the Loan Agreement. Such inventory advances limit can be as high as $2.0 million with a Net Tangible Worth of $10.0 million, to as low as $0 with a Net Tangible Worth of $6.0 million. Any such decrease in the inventory advances limit shall take effect on the first day of the month following the Borrower’s delivery of its quarterly financial statements, as required by the Affirmative Covenants of the Loan Agreement. As of June 30, 2025, the Company’s Net Tangible Worth is approximately $7.4 million.
Previous report
The Loan Agreement obligates the Company to pay Pinnacle a yearly facility fee in an amount equal to 1.125% of the sum of the advance limit. The Loan Agreement contains certain affirmative and negative covenants, all of which the Company was in compliance with at June 30, 2025.
Reworded paragraphs (43)
Previous wording
During the three months ended June 30, 2025 and 2024, 92% and 95%, respectively, of our total net sales were within the telecommunications market. During the three months ended June 30, 2025 and 2024, sales to international customers accounted for 3% and 25% of total net sales, respectively; sales to military customers accounted for 6% and 3% of total net sales, respectively; and sales to other customers accounted for 2% and 2% of total net sales, respectively.
Current wording
During the three months ended September 30, 2025 and 2024, 92% and 91%, respectively, of our total net sales were within the telecommunications market. During the three months ended September 30, 2025 and 2024, sales to international customers accounted for less than 1% and 10% of total net sales, respectively; sales to military customers accounted for nil% and 8% of total net sales, respectively; and sales to other customers accounted for 8% and 1% of total net sales, respectively.
Previous wording
During the six months ended June 30, 2025 and 2024, 88% and 89%, respectively, of our total net sales were within the telecommunications market. During the six months ended June 30, 2025 and 2024, sales to international customers accounted for 9% and 20% of total net sales, respectively; sales to military customers accounted for 10% and 10% of total net sales, respectively; and sales to other customers accounted for 2% and 1% of total net sales, respectively.
Current wording
During the nine months ended September 30, 2025 and 2024, 89% and 90%, respectively, of our total net sales were within the telecommunications market. During the nine months ended September 30, 2025 and 2024, sales to international customers accounted for 7% and 15% of total net sales, respectively; sales to military customers accounted for 8% and 9% of total net sales, respectively; and sales to other customers accounted for 2% and 1% of total net sales, respectively.
Previous wording
We are expanding 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 the second half of 2024, we successfully tested our demonstrator model on several platforms and made appropriate improvements and changes. We believe this configuration of remote mobile electric vehicle charger is just an initial model and based on power and fuel needs will result in various additional configurations.
Current wording
During the second half of 2024, we completed 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. We believe this configuration of remote mobile electric vehicle charger is just an initial model and based on power and fuel needs will result in various additional configurations. In November 2025, we received a purchase order for $1,700 for our mobile electric chargers which are expected to ship during 2026.
Previous 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 of their long-term contracts and they tend to cover the cost of product development.
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. In October 2025, we received a contract from a military customer for our DC generators designed for mobile applications. The newly proposed model is approximately 25% smaller and lighter than our smaller generator currently deployed in military and telecom sectors, while maintaining comparable power output. The contract is for $674 and is expected to be delivered within the next six months.
Previous wording
The impact of inflation and rapidly changing prices has not impacted our operations during the threeand six months ended June 30, 2025. Rapid changes in the global economy may cause significant spikes in inflation which may have an impact in our financial condition during 2025 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 threeand nine months ended September 30, 2025. Rapid changes in the global economy may cause significant spikes in inflation which may have an impact in our financial condition during 2025 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
Our net sales for the three months ended June 30, 2025 were $2,708, which represents a 42% decrease in net sales as compared to $4,660 for the three months ended June 30, 2024. Our net sales for the six months ended June 30, 2025 were $4,431, which represents a 31% decrease in net sales as compared to $6,434 for the same period in 2024.
Current wording
Our net sales for the three months ended September 30, 2025 were $1,273, which represents a 74% decrease in net sales as compared to $4,914 for the three months ended September 30, 2024. Our net sales for the nine months ended September 30, 2025 were $5,704, which represents a 50% decrease in net sales as compared to $11,348 for the same period in 2024.
Previous wording
We believe revenue during the three and six months ended June 30, 2025 continued to be impacted by excess inventory at our largest customer’s warehouse. In addition, we believe economic and geopolitical factors have influenced our customers’ buying decisions.
Current wording
For the nine months ended September 30, 2025, we believe our sales to telecommunications customers in the U.S. was impacted by excess inventory in their storage warehouses. In addition, we believe economic and geopolitical factors have influenced our customers’ buying decisions, particularly international customers.
Previous wording
*Net Sales.*Net sales decreased $1,952, or 42%, to $2,708 for the three months ended June 30, 2025, as compared to $4,660 for the same period in 2024. The decrease in sales was primarily attributed to a decrease in sales of our DC generators to our telecommunications customers. We believe our largest customer continued to have excess inventory of our systems purchased in prior periods. We also believe economic and geopolitical factors had an influence in our customers’ buying decisions.
Current wording
*Net Sales.*Net sales decreased $3,641, or 74%, to $1,273 for the three months ended September 30, 2025, as compared to $4,914 for the same period in 2024. The decrease in sales was primarily attributed to a decrease in sales of our DC generators to our largest U.S. telecommunications customer and to international customers. We believe our largest customer continued to have excess inventory of our systems purchased in prior periods. We also believe economic and geopolitical factors had an influence in our international customers’ buying decisions.
Previous wording
For the three months ended June 30, 2025, sales to our largest telecommunication customer in the U.S. accounted for 69% of our total net sales. For the same period in 2024, 40% of our total net sales were generated from our largest U.S. telecommunications customer, 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 south pacific region represented 22% of our total net sales. There was no other revenue from customers in excess of 10% of total net sales in either period.
Current wording
For the three months ended September 30, 2025, sales to our largest telecommunication customer in the U.S. accounted for 63% of our total net sales. For the same period in 2024, 46%, 18% and 12% of our total net sales were generated from three of our largest customers, all in the U.S. telecommunications market. There was no other revenue from customers in excess of 10% of total net sales in either period.
Previous wording
Net sales to customers in the U.S. accounted for 97% of our total net sales for the three months ended June 30, 2025, as compared to 75% for the same period in 2024. Our international sales represented 3% of our net sales for the three months ended June 30, 2025, as compared to 25% in international sales in the same period in 2024.
Current wording
Net sales to customers in the U.S. accounted for 100% of our total net sales for the three months ended September 30, 2025, as compared to 90% for the same period in 2024. Our international sales represented nil% of our net sales for the three months ended September 30, 2025, as compared to 10% in international sales in the same period in 2024.
Previous wording
Cost of Sales. Cost of sales during the three months ended June 30, 2025 decreased by $1,050, or 37%, to $1,778, as compared to $2,828 during the same period in 2024. Cost of sales as a percentage of net sales during the three months ended June 30, 2025 increased to 65.7% as compared to 60.7% in the same period in 2024 primarily as a result of an increase in factory overhead absorption as compared to the same period in 2024.
Current wording
Cost of Sales. Cost of sales during the three months ended September 30, 2025 increased by $43, or 1%, to $3,533, as compared to $3,490 during the same period in 2024. Cost of sales as a percentage of net sales during the three months ended September 30, 2025 increased to 277.5% as compared to 71% in the same period in 2024. Cost of sales includes inventory write-downs of $1,967 in 2025, and $nil in 2024, to adjust inventory to net realizable value.
Previous wording
*Gross Profit.*We had a gross profit of $930 for the three months ended June 30, 2025, which is a decrease of $902 or 49%, as compared to gross profit of $1,832 during the same period in 2024. The decrease in gross profit for the three months ended June 30, 2025 was primarily a result of a slight increase in factory overhead absorption as compared to the same period in 2024. Our gross profit as a percentage of net sales was 34.3% for the quarter ended June 30, 2025, as compared to a gross profit as a percentage of net sales of 39.3% in the same period in 2024.
Current wording
*Gross Profit (Loss).*We had a gross loss of $2,260 for the three months ended September 30, 2025, which is a decrease in gross profit of $3,684 or 259%, as compared to gross profit of $1,424 during the same period in 2024. The decrease in gross profit for the three months ended September 30, 2025 was primarily a result of an increase in factory overhead absorption and underutilization of the factory. Our gross loss as a percentage of net sales was (177.5)% for the quarter ended September 30, 2025, as compared to a gross profit as a percentage of net sales of 29% in the same period in 2024.
Previous wording
*Sales and Marketing Expenses.*During the three months ended June 30, 2025, sales and marketing expenses decreased by $80, or 30%, to $184, as compared to $264 during the same period in 2024. 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 2024.
Current wording
*Sales and Marketing Expenses.*During the three months ended September 30, 2025, sales and marketing expenses decreased by $54, or 21%, to $198, as compared to $252 during the same period in 2024. 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 2024.
Previous wording
*Research and Development Expenses.*During the three months ended June 30, 2025, research and development expenses decreased by $49, or 25%, to $146, as compared to $195 during the same period in 2024. The decrease was primarily due to a decrease in research and development support staff and consulting services during the three months ended June 30, 2025 as compared to the same period in 2024. We plan to recruit additional engineers during 2025 to support new product developments and our customer diversification efforts.
Current wording
*Research and Development Expenses.*During the three months ended September 30, 2025, research and development expenses decreased by $15, or 9%, to $157, as compared to $172 during the same period in 2024. The decrease was primarily due to a decrease in research and development support staff and consulting services during the three months ended September 30, 2025 as compared to the same period in 2024. We plan to recruit additional engineers during 2025 to support new product developments and our customer diversification efforts.
Previous wording
General and Administrative Expenses. General and administrative expenses decreased by $203, or 24%, to $710 during the three months ended June 30, 2025, as compared to $913 during same period in 2024. The decrease in general and administrative expenses during the three months ended June 30, 2025 was primarily due to a decrease in the number of general and administrative staff.
Current wording
General and Administrative Expenses. General and administrative expenses decreased by $153, or 16%, to $807 during the three months ended September 30, 2025, as compared to $960 during same period in 2024. The decrease in general and administrative expenses during the three months ended September 30, 2025 was primarily due to a decrease in the number of general and administrative staff.
Previous wording
Interest and Finance Costs. Interest expense for the three months ended June 30, 2025 was $171, as compared to $179 during the same period in 2024. The interest expense is primarily from an interest on amount borrowed from our line of credit with Pinnacle Bank.
Current wording
Interest and Finance Costs. Interest expense for the three months ended September 30, 2025 was $208, as compared to $153 during the same period in 2024. The interest expense is primarily from an interest on amount borrowed from our line of credit with Pinnacle Bank.
Previous wording
*Net Profit (Loss).*As a result of the factors identified above, we reported net loss of $271, or $(0.11) per basic and diluted share, for the three months ended June 30, 2025, as compared to net profit of $501, or $0.20 per basic and diluted share, for the same period in 2024.
Current wording
*Net Profit (Loss).*As a result of the factors identified above, we reported net loss of $4,085 or $(1.63) per basic and diluted share, for the three months ended September 30, 2025, as compared to net profit of $13, or $0.01 per basic and diluted share, for the same period in 2024.
Previous wording
Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
Current wording
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Previous wording
*Net Sales.*Net sales decreased $2,003, or 31%, to $4,431 for the six months ended June 30, 2025, as compared to $6,434 for the same period in 2024. The decrease in sales was primarily attributed to a decrease in sales of our DC generators to our telecommunications customers. We believe our largest customer continued to have excess inventory of our systems purchased in prior periods. We also believe economic and geopolitical factors have had an influence in our customers’ buying decisions.
Current wording
*Net Sales.*Net sales decreased $5,644, or 50%, to $5,704 for the nine months ended September 30, 2025, as compared to $11,348 for the same period in 2024. The decrease in sales was primarily attributed to a decrease in sales of our DC generators to our telecommunications customers and to our international customers. We believe our largest customer continued to have excess inventory of our DC generators purchased in prior periods. We also believe economic and geopolitical factors have had an influence in our customers’ buying decisions.
Previous wording
For the six months ended June 30, 2025, sales to our largest telecommunication customer in the U.S. accounted for 70% of our total net sales. For the six months ended June 30, 2025, 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. There was no other revenue from customers in excess of 10% of total net sales in either period.
Current wording
For the nine months ended September 30, 2025, sales to our largest telecommunication customer in the U.S. accounted for 68% of our total net sales. For the nine months ended September 30, 2025, sales to our largest telecommunication customers in the U.S. accounted for 44% and 17% of our total net sales. There was no other revenue from customers in excess of 10% of total net sales in either period.
Previous wording
Net sales to customers in the U.S. accounted for 91% of our total net sales for the six months ended June 30, 2025, as compared to 80% for the same period in 2024. Our international sales represented 9% of our net sales for the six months ended June 30, 2025, as compared to 20% in international sales in the same period in 2024.
Current wording
Net sales to customers in the U.S. accounted for 93% of our total net sales for the nine months ended September 30, 2025, as compared to 85% for the same period in 2024. Our international sales represented 7% of our net sales for the nine months ended September 30, 2025, as compared to 15% in international sales in the same period in 2024.
Previous wording
Cost of Sales. Cost of sales during the six months ended June 30, 2025 decreased by $1,822, or 36%, to $3,183, as compared to $5,005 during the same period in 2024. Cost of sales as a percentage of net sales during the six months ended June 30, 2025 decreased to 71.8%, as compared to 77.8% in the same period in 2024.
Current wording
Cost of Sales. Cost of sales during the nine months ended September 30, 2025 decreased by $1,779, or 21%, to $6,715, as compared to $8,494 during the same period in 2024. Cost of sales as a percentage of net sales during the nine months ended September 30, 2025 increased to 117.7%, as compared to 74.9% in the same period in 2024. Cost of sales includes inventory write-downs of $1,967 in 2025, and $nil in 2024, to adjust inventory to net realizable value.
Previous wording
*Gross Profit.*Gross profit during the six months ended June 30, 2025 decreased by $181, or 13%, to gross profit of $1,248, as compared to gross profit of $1,429 during the same period in 2024. Our gross profit as a percentage of net sales was 28.2% for the six months ended June 30, 2025, as compared to 22.2% in the same period in 2024.
Current wording
*Gross Profit (Loss).*Duringthe nine months ended September 30, 2025, we had a gross loss of $1,011, compared to gross profit of $2,854 during the same period in 2024. Our gross loss as a percentage of net sales was (17.7)% for the nine months ended September 30, 2025, as compared to gross profit as a percentage of net sales of 25.1% in the same period in 2024.
Previous wording
*Sales and Marketing Expenses.*During the six months ended June 30, 2025, sales and marketing expenses decreased by $51, or 10%, to $443, as compared to $494 during the same period in 2024. 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.
Current wording
*Sales and Marketing Expenses.*During the nine months ended September 30, 2025, sales and marketing expenses decreased by $104, or 14%, to $642, as compared to $746 during the same period in 2024. 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
*Research and Development Expenses.*During the six months ended June 30, 2025, research and development expenses decreased by $110, or 27%, to $305, as compared to $415 during the same period in 2024. The decrease was primarily due to a decrease in research and development support staff and consulting services during the six months ended June 30, 2025, as compared to the same period in 2024. We plan to recruit additional engineers during the second half of 2025 to support growth and our customer diversification efforts.
Current wording
*Research and Development Expenses.*During the nine months ended September 30, 2025, research and development expenses decreased by $123, or 21%, to $463 as compared to $586 during the same period in 2024. The decrease was primarily due to a decrease in research and development support staff and consulting services during the nine months ended September 30, 2025, as compared to the same period in 2024. We plan to recruit additional engineers during the second half of 2025 to support growth and our customer diversification efforts.
Previous wording
General and Administrative Expenses. General and administrative expenses decreased by $329, or 16%, to $1,711 during the six months ended June 30, 2025, as compared to $2,040 during same period in 2024. The decrease in general and administrative expenses during the six months ended June 30, 2025 was primarily due to a decrease in general and administrative staff.
Current wording
General and Administrative Expenses. General and administrative expenses decreased by $483, or 16%, to $2,518 during the nine months ended September 30, 2025, as compared to $3,001 during same period in 2024. The decrease in general and administrative expenses during the nine months ended September 30, 2025 was primarily due to a decrease in general and administrative staff.
Previous wording
Interest and Finance Costs. Interest expense for the six months ended June 30, 2025 was $335, as compared to $342 during the same period in 2024. The interest expense is primarily from an interest on amount borrowed from our line of credit with Pinnacle Bank.
Current wording
Interest and Finance Costs. Interest expense for the nine months ended September 30, 2025 was $543, as compared to $496 during the same period in 2024. The interest expense is primarily from an interest on amount borrowed from our line of credit with Pinnacle Bank.
Previous wording
*Net Loss.*For the six months ended June 30, 2025, we incurred net loss of $1,536, or $(0.61) per basic and diluted share, as compared to net loss of $1,641, or $(0.65) per basic and diluted share for the six months ended June 30, 2024.
Current wording
*Net Loss.*For the nine months ended September 30, 2025, we incurred net loss of $5,621, or $(2.24) per basic and diluted share, as compared to net loss of $1,628, or $(0.65) per basic and diluted share for the nine months ended September 30, 2024.
Previous wording
The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. For the six months ended June 30, 2025, we recorded a net loss of $1,536 and used cash in operations of $988. This factor raises substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. In addition, our independent registered public accounting firm, in its audit report to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, expressed substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Current wording
The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. For the nine months ended September 30, 2025, we recorded a net loss of $5,621 and used cash in operations of $589. Further, the Company was delinquent in its rent payments to its landlords on its office and warehouse facilities. These factors raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. In addition, our independent registered public accounting firm, in its audit report to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, expressed substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Previous wording
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, and to create a profitable operation. 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 sales to consume existing inventory, increase higher margin aftermarket parts revenue, to fund operations. In the event that the Company does not generate sufficient cash flows from operations and is unable to obtain funding, the Company will be forced to delay, reduce, or eliminate some or all of its discretionary spending, which could adversely affect the Company’s business prospects, ability to meet long-term liquidity needs or ability to continue operations.
Current wording
Furthermore, our ability to secure other financing is uncertain. 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, and to create a profitable operation. 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 sales to consume existing inventory, increase higher margin aftermarket parts revenue, to fund operations. In the event that the Company does not generate sufficient cash flows from operations and is unable to obtain funding, the Company will be forced to delay, reduce, or eliminate some or all of its discretionary spending, which could adversely affect the Company’s business prospects, ability to meet long-term liquidity needs or ability to continue operations.
Previous wording
During the six months ended June 30, 2025, we funded our operations primarily from cash on hand. As of June 30, 2025, we had working capital of $5,755, as compared to working capital of $7,037 at December 31, 2024. This $1,282 decrease in working capital is primarily attributable to $323 decrease in cash and cash equivalents resulting from net cash of $988 used in operating activities, and net cash of $nil used in investing activities, and net cash of $665 from financing activities.
Current wording
During the nine months ended September 30, 2025, we funded our operations primarily from cash on hand. As of September 30, 2025, we had working capital of $2,375, as compared to working capital of $7,037 at December 31, 2024. This $4,660 decrease in working capital is primarily attributable to $494 decrease in cash and cash equivalents resulting from net cash of $589 used in operating activities, and net cash of $nil used in investing activities, and net cash of $95 from financing activities.
Previous wording
On June 30, 2025 and December 31, 2024, our net trade receivables totaled $2,031 and $2,153, respectively. On June 30, 2025, $1,720 (85%), and $120 (6%) represented the two largest open customer account balances, while$1,771 (82%) represented the largest open customer account balances on December 31, 2024.
Current wording
On September 30, 2025 and December 31, 2024, our net trade receivables totaled $856 and $2,153, respectively. On September 30, 2025, $665 (78%), and $57 (7%) represented the two largest open customer account balances, while$1,771 (82%) represented the largest open customer account balances on December 31, 2024.
Previous wording
Our available capital resources on June 30, 2025 consisted primarily of $175 in cash and cash equivalents, as compared to $498 as of December 31, 2024. 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 September 30, 2025 consisted primarily of $4 in cash and cash equivalents, as compared to $498 as of December 31, 2024. 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
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 (9.75% at June 30, 2025 and 9.75% at December 31, 2024). 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 (10.75% at June 30, 2025 and 10.75% at December 31, 2024).
Current wording
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 (8.5% at September 30, 2025 and 8.75% at December 31, 2024). 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 (9.5% at September 30, 2025 and 9.75% at December 31, 2024).
Previous wording
At December 31, 2024, the outstanding balance under the line of credit was $4,797 and the Company had availability under the line of credit in the amount of $654. During the six months ended June 30, 2025, the Company advanced an aggregate of $505 under the credit facility. At June 30, 2025, the outstanding balance under the line of credit was $5,302 and the Company had an amount of $66 available under the line of credit.
Current wording
At December 31, 2024, the outstanding balance under the line of credit was $4,797 and the Company had availability under the line of credit in the amount of $654. During the nine months ended September 30, 2025, the Company had a net repayment of $145 to the credit facility. At September 30, 2025, the outstanding balance under the line of credit was $4,652, which includes interest, fees and financing costs (see below).
Previous wording
The total interest expense, fees, and financing costs incurred under the Loan Agreement for the three-month periods ended June 30, 2025 and 2024 were $168 and $179, respectively. Of these amounts, $1 in 2025 and $1 in 2024 were recorded under general and administrative expenses, while $167 in 2025 and $177 in 2024 were recorded under interest expense and finance costs in the accompanying statements of operations.
Current wording
The total interest expense, fees, and financing costs incurred under the Loan Agreement for the three-month periods ended September 30, 2025 and 2024 were $258 and $248, respectively. Of these amounts, $88 in 2025 and $99 in 2024 were recorded under general and administrative expenses, while $170 in 2025 and $149 in 2024 were recorded under interest expense and finance costs in the accompanying statements of operations.
Previous wording
The total interest expense, fees, and financing costs incurred under the Loan Agreement for the six-month periods ended June 30, 2025 and 2024 were $329 and $340, respectively. Of these amounts, $1 in 2025 and $2 in 2024 were recorded under general and administrative expenses, while $327 in 2025 and $338 in 2024 were recorded under interest expense and finance costs in the accompanying statements of operations.
Current wording
The total interest expense, fees, and financing costs incurred under the Loan Agreement for the nine-month periods ended September 30, 2025 and 2024 were $497 and $588, respectively. Of these amounts, $90 in 2025 and $100 in 2024 were recorded under general and administrative expenses, while $407 in 2025 and $488 in 2024 were recorded under interest expense and finance costs in the accompanying statements of operations.
Previous wording
The following table sets forth the significant sources and uses of cash for the six-month periods set forth below:
Current wording
The following table sets forth the significant sources and uses of cash for the nine-month periods set forth below:
Previous wording
Net cash used in operating activities for the six months ended June 30, 2025 was $988 as compared to net cash provided by operating activities of $190 for the same period in 2024. This change in net cash used in the six months ended June 30, 2025 was primarily due to a net loss of $1,536, a decrease in accounts receivable of $122, and an increase in accounts payable of $450.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2025 was $589 as compared to net cash used in operating activities of $400 for the same period in 2024. This change in net cash used in the nine months ended September 30, 2025 was primarily due to a net loss of $5,621, a decrease in accounts receivable of $1,297, and an increase in accounts payable of $1,099.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2025 was $nil, as compared to net cash used in investing activities of $18 for the same period in 2024. Net cash used in investing activities was primarily due to acquisitions of property and equipment.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2025 was $nil, as compared to net cash used in investing activities of $18 for the same period in 2024. Net cash used in investing activities was primarily due to acquisitions of property and equipment.
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