Polar Power, Inc.
For the period ended Mar 31, 2026. Filed May 20, 2026.
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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.
Mar 31, 2026 · Filed May 20, 2026
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 2025-09-30; filed 2025-11-19.
0001493152-25-024286
ITEM 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-20.
0001493152-26-024680
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 90 previous paragraphs and 64 current paragraphs.
32 unchanged; 23 reworded; 9 added; 34 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 4 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 (9)
Current report
None.
Current report
Critical Accounting Policies
Current report
Our net sales for the three months ended March 31, 2026 were $1,728, compared to $1,723 for the three months ended March 31, 2025. We reported a net loss of $178 for the three months ended March 31, 2026, as compared to a net loss of $1,265 for the same period in 2025. Cost reductions in operating expenses helped improve the net loss from 2025 to 2026.
Current report
We believe revenue during the quarter ended March 31, 2026 continued to be impacted by excess inventory at our customer’s warehouse in addition to economic and geopolitical factors influencing our customers’ buying decisions.
Current report
During 2026, 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.
Current report
Effective September 30, 2020, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Pinnacle. 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. The Loan Agreement contains certain affirmative and negative covenants.
Current report
At March 31, 2026, and December 31, 2025, the Company was not in compliance with the affirmative covenant requiring the Company to attain a minimum effective tangible net worth greater than $6,000On March 10, 2026, the Company and Pinnacle executed a Notice of Additional Defaults and Forbearance Agreement (the “Forbearance Agreement”), in which Pinnacle agrees to forbear from exercising certain rights and remedies under the Loan Agreement and related documents (the “Loan Documents”) arising from the specified existing defaults for the period commencing March 10, 2026 (the “Effective Date”), to July 31, 2026 (the “Forbearance Termination Date”), considering the Company 1) on or prior to the Effective Date, pays Pinnacle the amount of $250, 2) on or prior to the Effective Date, assigns to Pinnacle new Eligible Accounts (as defined by the Forbearance Agreement) in the aggregate amount of at least $185, with 85% of the Net Face Amount (as defined by the Forbearance Agreement) of such new Eligible Accounts to be applied to reduce the loan obligations, 3) within forty-five (45) days of the Effective Date, reduce the loan obligations by the aggregate amount of $225, which reduction can result from a cash payment or the assignment of sufficient new Eligible Accounts, with 85% of the Net Face Amount of such new Eligible Accounts to be applied towards such reduction amount, 4) does not create any new events of default, 5) pays in full all obligations to Pinnacle by the Termination Date. If the Company timely complies with all terms listed above, and so long as the Forbearance Termination Date has not occurred, Pinnacle agrees that it will re-commence making advances to the Company in the amount equal to 42.5% of the Net Face Amount of the thereafter arising Eligible Accounts, with the remaining 42.5% of the Net Face Amount of such Eligible Accounts to be applied to reduce the then outstanding obligations. In March 2026, the Company paid $250 to Pinnacle and timely complied with the requirements under the Forbearance Agreement and commenced taking advances at 42.5% of the Net Face Amount of Eligible Accounts on March 12, 2026. While the Company expects to stay in compliance and pay the full obligation to Pinnacle by July 31, 2026, there is no guarantee that the Company will be able to do so. If the Company is unable to comply with the Loan Agreement, or pay the full obligation to Pinnacle by the July 31, 2026, Pinnacle may immediately enforce its claims, rights, liens, and security interests under the Forbearance Agreement, and the Loan Documents, including, but not limited to, taking possession of its collateral, or any portion thereof, and foreclosing upon its collateral, or any portion thereof, in accordance with the Loan Documents and applicable law.
Current report
We did not have any investing activities for the three months ended March 31, 2026 and March 31, 2025.
Current report
As of March 31, 2026, we had a backlog of $3,744. 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, 2026 was comprised of the following elements: 82% in purchases of DC power systems by telecommunications customers, and 18% in purchases by customers in the military markets. We believe the majority of our backlog will be shipped within the next six months.
Removed paragraphs (34)
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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%.
Previous 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.
Previous 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.
Previous 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.
Previous report
Critical Accounting Policies and Estimates
Previous report
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 report
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 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.
Previous report
*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 report
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 report
*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 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.
Previous report
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Previous report
*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 report
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 report
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 report
*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 report
*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 report
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 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.
Previous report
*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 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous report
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 report
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.
Previous report
Our sales backlog as of September 30, 2025 was $2,144, of which our telecommunications customers accounted for 95%, customers in military markets accounted for 2%, customers in the marine market accounted for 1%, and customers in other markets accounted for 2%.
Previous 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 a customer in the market for mobile EV chargers accounted for 33%.. We believe the majority of our sales backlog will be shipped within the next twelve months.
Reworded paragraphs (23)
Previous 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.
Current wording
During the three months ended March 31, 2026 and March 31, 2025, 96% and 82%, respectively, of our total net sales were within the telecommunications market. During the first quarter of 2026, our largest customer, a Tier-1 telecommunications customer in the U.S., represented 72% of our total net sales. During the same period in 2025, our two largest customers represented 71% and 17% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a customer in the military market in the U.K. 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 three months ended March 31, 2026 and 2025, sales to international customers accounted for 5% and 18% of total net sales, respectively. Sales to military customers during three months ended March 31, 2026 and 2025 accounted for 3% and 17% of total net sales, respectively. During three months ended March 31, 2026 and 2025, sales to customers in the marine and other markets accounted for 1% and 1% of total net sales, respectively.
Previous 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.
Current wording
In May 2023, we announced plans to expand our mobile offerings by upgrading our mobile CHAdeMO EV chargers to the universal combined charging system standard to reach the mobile EV charging market. Mobile EV chargers are used for emergency roadside service providing a fast-charging solution for EVs that have run out of charge before reaching a stationary charging facility. 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.
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. 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.
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 of their long-term contracts and they tend to cover the cost of product development.
Previous 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.
Current wording
The impact of inflation and rapidly changing prices has not impacted our operations during the three months ended March 31, 2026. Rapid changes in the global economy may cause significant spikes in inflation which may have an impact in our financial condition during 2026 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
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.
Current wording
*Net Sales.*Net sales increased $5 to $1,728 for the three months ended March 31, 2026, as compared to $1,723 for the same period in 2025. During the three months ended March 31, 2026, our largest customer accounted for 72% of our total net sales. During the same period in 2025, our two largest customers accounted for 71% and 17% 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 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.
Current wording
Net sales to telecommunications customers in the U.S. accounted for 96% of our total net sales for the three months ended March 31, 2026, as compared to 82% for the same period in 2025. Our international sales represented 5% of our net sales in the three months ended March 31, 2026, as compared to 18% in international sales in the same period in 2025.
Previous 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.
Current wording
Cost of Sales. Cost of sales during the three months ended March 31, 2026 decreased by $810, or 58%, to $593, as compared to $1,403 during the same period in 2025. Cost of sales as a percentage of net sales during the three months ended March 31, 2026 decreased to 34.3% as compared to 81.4% in the same period in 2025. The decrease in cost of sales was primary attributable to a $450 adjustment to warranty reserve and decrease in factory overhead absorption in three months ended March 31, 2026 as compared to the same period in 2025.
Previous 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.
Current wording
*Gross Profit.*We had a gross profit of $1,135 for the three months ended March 31, 2026, which is an increase of $815, or 255%, as compared to gross profit of $320 during the same period in 2025. The increase in gross profit for the three months ended March 31, 2026, was primarily a result of a $450 adjustment to warranty reserve and a decrease in factory overhead absorption during the three months ended March 31, 2026. Our gross profit as a percentage of net sales was 65.7% for the quarter ended March 31, 2026, as compared to a gross profit as a percentage of net sales of 18.6% in the same period in 2025.
Previous 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.
Current wording
*Sales and Marketing Expenses.*During the three months ended March 31, 2026, sales and marketing expenses decreased by $101, or 39%, to $159, as compared to $260 during the same period in 2025. The decrease was attributable to a decrease in marketing expenditures during three months ended March 31, 2026 as compared to the same period in 2025. We plan to increase our sales force and increase our marketing and tradeshow activities in 2026 to support our diversification strategy and expand our customer base in all market segments.
Previous 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.
Current wording
*Research and Development Expenses.*During the three months ended March 31, 2026, research and development expenses increased by $9 or 6%, to $169, as compared to $160 during the same period in 2025. The decrease in research and development expenses resulted from a decrease in new product development activity during the same period in 2026. We plan to recruit additional engineers during 2026 to support new product developments and our customer diversification efforts.
Previous 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.
Current wording
General and Administrative Expenses. General and administrative expenses were $783 for the three months ended March 31, 2026, as compared to $1,001 for the same period in 2025. The 22% decrease in general and administrative expenses resulted from consolidating administrative tasks to improve efficiency.
Previous 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.
Current wording
Interest and Finance Costs. Interest expense for the three months ended March 31, 2026 was $202, as compared to $164 during the same period in 2025. The interest expense was primarily from an interest on amount borrowed from our line of credit with Pinnacle Bank (“Pinnacle”).
Previous 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.
Current wording
*Net Loss.*As a result of the factors identified above, we reported net loss of $178, or $(0.05) per basic and diluted share, for the three months ended March 31, 2026, as compared to net loss of $1,265, or $(0.50) per basic and diluted share, for the same period in 2025.
Previous 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.
Current wording
The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. In accordance with Accounting Standards Codification (“ASC”) 205-40,Going Concern, the Company’s management has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying financial statements were issued. For the three months ended March 31, 2026, the Company recorded a net loss of $178 and used cash in operations of $2,191. 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, 2025, 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
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.
Current wording
During the three months ended March 31, 2026, we funded our operations primarily from cash on hand. As of March 31, 2026, we had working capital of $2,106, as compared to working capital deficit of $(262) at December 31, 2025. This $2,368 increase in working capital was primarily attributable to $173 decrease in cash and cash equivalents resulting from net cash of $2,191 used in operating activities, net cash of $nil used in investing activities, and net cash of $2,018 from financing activities.
Previous 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.
Current wording
On March 31, 2026 and December 31, 2025, our net trade receivables totaled $1,511 and $330, respectively. On March 31, 2026, $1,252 (83%) represented the largest open customer account balance, while $196 (59%) and $58 (18%) represented the two largest open customer account balances on December 31, 2025.
Previous 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.
Current wording
Our available capital resources on March 31, 2026 consisted primarily of $27 in cash and cash equivalents, as compared to $68 as of December 31, 2025. 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 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 (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).
Current wording
Borrowings based on receivables bear an interest on the daily balance at a rate of 1.25% above the prime rate, but in no event less than 3.75% per annum (8.0% at March 31, 2026 and 8.0% at December 31, 2025). Interest on the portion of the daily balance consisting of advances against inventory accrues interest at a rate of 2.25% above the prime rate, but in no event less than 4.75% per annum (9.0% at March 31, 2026 and 9.0% at December 31, 2025).
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 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).
Current wording
The balance of the loan agreement at December 31, 2025 was $4,036. During 2026, the Company repaid a net of $332 to reduce the Loan. At March 31, 2026, the outstanding balance under the line of credit was $3,704 which includes interest, fees and financing costs (see below), and $1,498 of the Company’s accounts receivable is held as collateral under the credit facility.
Previous 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.
Current wording
The total interest expense, fees, and financing costs incurred under the Loan Agreement during the three months ended March 31, 2026 and 2025 were $125 and $160, respectively, and 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 nine-month periods set forth below:
Current wording
The following table sets forth the significant sources and uses of cash for the three-month periods set forth below:
Previous 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.
Current wording
Net cash used in operating activities for the three months ended March 31, 2026 was $2,191 as compared to net cash used in operating activities of $584 for the same period in 2025. This increase in net cash used in the three months ended March 31, 2026 was primarily due to a net loss of $178, an increase in accounts receivable of $1,181, and an increase in accounts payable of $111.
Previous wording
Net cash provided by financing activities totaled $95 for the nine months ended September 30, 2025, as compared to $367 provided by financing activities during the same period in 2024. This cash provided was primarily net borrowings of $240 on a notes payable issued by a related party coupled with net payments of $145 to the line of credit with Pinnacle Bank.
Current wording
Net cash provided by financing activities totaled $2,018 for the three months ended March 31, 2026, as compared to $154 provided by financing activities during the same period in 2025. This cash provided during 2026 was primarily proceeds from shares sold under the ATM facility.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.