Polar Power, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 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-K
Period ended 2023-12-31; filed 2024-04-01.
0001493152-24-012355
Item 7. Management Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001504
Item 7. Management 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 70 previous paragraphs and 66 current paragraphs.
36 unchanged; 27 reworded; 3 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 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 (3)
Current report
During 2024, we saw significant volatility in revenue primarily from our largest customer which greatly affected overall performance. We believe the drop in sales is attributed to excess inventory at customer warehouse collected during COVID-19 and customer concerted effort to reduce inventory. We believe the excess inventory has largely been reduced and anticipate normalization in purchases during second half of 2025. We reached profitability in the second and third quarters of the year with gross margins at 39% and 29%, respectively. We experienced net losses and negative margins in the first and fourth quarter. We believe economic and geopolitical factors continue to influence our customers’ buying patterns.
Current report
*Interest and Finance Costs.*Our interest expense was $649 in 2024, as compared to $559 in 2023. Our interest expense is primarily from borrowings from our credit facility.
Current report
Net cash provided by financing activities totaled $504 for 2024, as compared to $3,962 provided by financing activities during 2023, an decrease of $2,894. This cash provided was primarily borrowings from the line of credit with Pinnacle.
Removed paragraphs (7)
Previous report
We also started deliveries of our Summit Series, 27 kW diesel fuel DC generators to the U.S. 5G telecommunications market. Our US Tier-1 telecommunications customers are in the process of upgrading 15 kW and 20 kW generators to the 27 kW to meet the increased power requirements for 5G.
Previous report
*Stock-Based Compensation.*We periodically issue stock-based compensation to officers, directors, employees, and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date.
Previous report
Stock-based payments to officers, directors, employees, and for acquiring goods and services from nonemployees, which include grants of employee stock options, are recognized in the financial statements based on their grant date fair values in accordance with ASC 718,Compensation-Stock Compensation. Stock option grants to officers, directors, employees, and consultants, which are generally time vested, are measured at the grant date fair value and depending on the conditions associated with the vesting of the award, compensation cost is recognized on a straight-line or graded basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if we had paid cash for the services. The fair value of stock options granted is estimated using the Black-Scholes option-pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life, and future dividends. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.
Previous report
During the second half of 2023, we experienced a decrease in revenue due to unanticipated rescheduling of approximately $2.0 million in deliveries to our largest telecommunications customers. These orders remain part of our backlog as of December 31, 2023, and are expected to be delivered to customers within the following two quarters.
Previous report
During 2022 and to a lesser extent in 2023, supply chain constraints affected timely delivery of raw materials required to complete our DC power systems. We believe that the aftermath of the pandemic, inflation, the impacts of war and other recent geopolitical events will be an ongoing challenge for years to come and to adapt will require us to further globalize our vendors, engineering, and customers
Previous report
*Interest and Finance Costs.*Our interest expense was $559 in 2023, as compared to $58 in 2022. In 2023, our equipment financing expense decreased by $10, bank fees related to our line of credit with Pinnacle Bank increased by $508.
Previous report
Net cash provided by financing activities totaled $3,962 for 2023, as compared to $1,642 provided by financing activities during 2022, an increase of $2,320. This increase was primarily due to the issuance and sale of 4,60,000 shares of our common stock in a firm commitment underwritten public offering on December 5, 2023. We received net proceeds of approximately $1,556 from the sale of the shares after deducting underwriting discounts and commissions and other offering expenses payable by us. During 2023, we received $2,354 in net proceeds from advances from our credit facility at Pinnacle Bank and repaid $205 on our equipment financing notes payable.
Reworded paragraphs (27)
Previous wording
During the years ended December 31, 2023 and 2022, 95% and 96%, respectively, of our total net sales were within the telecommunications market. In 2023, our two largest customers represented 50% and 18% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a telecommunications customer outside the U.S. In 2022, our two largest customers represented 66% and 23% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a telecommunications customer outside the U.S. There was no other revenue from customers in excess of 10% of total net sales in either period. During those periods, the majority of our sales were of our DC base powers systems. During 2023 and 2022, sales to international customers accounted for 21% and 25% of total revenue, respectively. Sales to military customers during 2023 and 2022 accounted for 3% and 1% of total revenues, respectively. During 2023 and 2022, sales to the marine and other markets accounted for 2% and 3% of total revenue, respectively.
Current wording
During the years ended December 31, 2024 and 2023, 88% and 95%, respectively, of our total net sales were within the telecommunications market. In 2024, our two largest customers represented 48% and 14% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a telecommunications customer outside the U.S. In 2023, our two largest customers represented 50% and 18% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a telecommunications customer outside the U.S. There was no other revenue from customers in excess of 10% of total net sales in either period. During those periods, the majority of our sales were of our DC base powers systems. During 2024 and 2023, sales to international customers accounted for 13% and 21% of total revenue, respectively. Sales to military customers during 2024 and 2023 accounted for 8% and 3% of total revenues, respectively. During 2024 and 2023, sales to the marine and other markets accounted for 4% and 2% of total revenue, respectively.
Previous 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.
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. During second half of 2024, we have 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.
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. Marine sales interest have increased significantly both domestically and overseas due to the increased performance in comfort and fuel economy. Also, there are increasing restrictions on the use of diesel and gasoline engines in many lakes and waterways making way for our natural gas and propane operated generators. Using natural gas and propane for home and office charging for electric vehicle and forklifts is still a market under development. Same is true for diesel mobile chargers for emergency roadside assistance.
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
We expect that opportunities in the bad-grid (i.e., areas where wireless towers are connected to an electrical grid that loses power for more than eight hours), and off-grid (i.e., areas where wireless towers are not connected to an electrical grid) applications, which include telecommunications towers, commercial and residential backup power, electric vehicle charging, “mini-grid” and various other power applications, will help to expand the market for our natural gas/LPG (propane) product lines domestically and internationally. We plan to develop new configurations of DC power system, battery storage and solar products to optimize the match between our solutions and various application needs.
Current wording
We expect that opportunities in the bad-grid (i.e., areas where wireless towers are connected to an electrical grid that loses power for more than eight hours), and off-grid (i.e., areas where wireless towers are not connected to an electrical grid) applications, which include telecommunications towers, commercial and residential backup power, electric vehicle charging, “mini-grid” and various other power applications, will help to expand the market for our natural gas/LPG (propane) product lines domestically and internationally. In 2024. We demonstrated a microgrid product that can provide 24/7 electric power to a commercial facility. This project was funded by UNHCR a United Nations organization. The product included DC generator, battery storage, AC inverter, solar charge controller and remote monitoring in a single container which can be delivered to any remote location to provide power. We believe this product in its current configuration can serve mid-level micro grid needs in residential and commercial areas. We plan to develop new configurations of DC power system, battery storage and solar products to optimize the match between our solutions and various application needs.
Previous wording
Our net sales for the year ended December 31, 2023, were $15,293, as compared to $16,056 for the year ended December 31, 2022. We reported a net loss of $6,548 for 2023, as compared to net loss of $5,584 for 2022. Our revenues during these periods are primarily due to our telecommunications customers increasing their investments in back-up power generators primarily to support expansion of their network infrastructure.
Current wording
Our net sales for the year ended December 31, 2024, were $13,970, as compared to $15,293 for the year ended December 31, 2023. We reported a net loss of $4,677 for 2024, as compared to net loss of $6,548 for 2023. Cost of sales includes inventory write-downs of $900 in 2024, and $450 in 2023, to adjust inventory to net realizable value.
Previous wording
During 2023, our international sales were $3,216, or 21% of total net sales, as compared to $3,983, or 25%, during 2022.
Current wording
During 2024, sales to our customers in the U.S. were $12,108, or 87% of total net sales, as compared to 79% in 2023. During 2024, our largest customer represented 48% of our total net sales, as compared to 50% in 2023. Our international sales were $1,862, or 13% of total net sales in 2024, as compared to $3,216, or 21%, during 2023.
Previous wording
Our sales backlog as of December 31, 2023, was $3,862, with 56% of that amount being attributable to our largest U.S. telecommunications customer, 4% represented purchases from other telecommunications customers in the U.S., 31% represented purchases from telecommunications customers outside the U.S., 6% represented purchases from customers in the military markets, and 3% represented purchases from customer in the marine industry. During the first quarter of 2024, the Company received $5,400 in new purchase orders from customers for its DC power systems. Combined with open orders as of April 1, 2024, the Company has a total sales backlog of $7,700, which 40% of the orders are from its largest telecommunications customer in the U.S., 50% from other telecommunications customers, 8% from customers in military markets, and 2% from Marine, EV and other markets. Of the $7,700 in the sales backlog, 36% of the orders are from customers in international markets. The Company expects to complete shipment of these orders within the next six to twelve months.
Current wording
Our sales backlog as of December 31, 2024, was $1,306, with 53% of that amount being attributable to our largest U.S. telecommunications customer, 3% attributed to other telecommunications customers, 36% to customers in the military markets, and 9% to customers in marine and other markets. The Company expects to complete shipment of these orders within the next six to twelve months.
Previous wording
We plan to continue to expand our customer base in all market segments. We also anticipate that our sales will increase as we overcome supply chain and labor issues. We plan to continue to take proactive steps to manage our operations and mitigate the financial impacts of higher costs and supply chain issues. However, the full impact on our financial and operating performance of the COVID-19 pandemic along with geopolitical factors and increasing inflation concerns will depend significantly on the duration and severity of these factors, the actions taken to mitigate their impact, disruption to our supply chain, and the pace with which our clients return to more normalized purchasing behavior, among others factors beyond our knowledge or control. See “Risk Factors” commencing on page 16 of this Annual Report on Form 10-K for additional considerations.
Current wording
We plan to continue to market our products globally and expand our customer base in all market segments. We plan to continually improve our inventory turns to generate cash flow from operations combined with austerity measures on non-essentials overhead to manage cash flow while sales improves. During 2024, we successfully reduced overhead expenses by $996 to improve cash generated through operations. We plan to continue take proactive steps to manage our operations and mitigate the financial impacts of higher costs, supply chain issues, and geopolitical factors. We have $12.9 million in inventory and completed updating our manufacturing facilities to accommodate three to four times the annual revenue of 2024. However, the full impact on our financial and operating performance of these factors will depend significantly on the duration and severity of these factors, the actions taken to mitigate their impact, disruption to our supply chain, and the pace with which our clients return to more normalized purchasing behavior, among others factors beyond our knowledge or control. See “Risk Factors” commencing on page 17 of this Annual Report on Form 10-K for additional considerations.
Previous wording
Net Sales. Net sales decreased by $763, or 5%, to $15,293 for the year ended December 31, 2023, as compared to $16,056 for the year ended December 31, 2022. The decrease in net sales is attributable to a decrease in deliveries of our DC power generator to our largest telecommunications customer in the U.S. During the second half of 2023, our largest telecommunications customer asked us to postpone deliveries towards the end of the year. As of December 31, 2023, approximately $2.0 million in DC power generators that were scheduled to ship in 2023 remained in our sales backlog.
Current wording
Net Sales. Net sales decreased by $1,323, or 9%, to $13,970 for the year ended December 31, 2024, as compared to $15,293 for the year ended December 31, 2023. The decrease in net sales is primarily due to a decrease in deliveries of our DC power generators to our largest telecommunications customer in the U.S.
Previous wording
During 2023, revenue from telecommunications customers accounted for 95% of total net sales, as compared to 96% of total net sales during 2022. Our two largest customers represented 50% and 18% of our total net sales in 2023, as compared to 66% and 23% in 2022. Our largest customer in each year was a Tier-1 telecommunications customer in the U.S., and our second largest customer in each year was a telecommunications customer outside the U.S. There was no other revenue from customers in excess of 10% of total net sales in either period.
Current wording
During 2024, revenue from telecommunications customers accounted for 88% of total net sales, as compared to 95% of total net sales during 2023. Our two largest customers represented 48% and 14% of our total net sales in 2024, as compared to 50% and 18% in 2023. Our largest customer in each year was a Tier-1 telecommunications customer in the U.S., and our second largest customer in each year was a telecommunications customer outside the U.S. There was no other revenue from customers in excess of 10% of total net sales in either period.
Previous wording
During 2023 and 2022, sales to international customers accounted for 21% and 25% of total revenue, respectively. Sales to military customers during 2023 and 2022 accounted for 3% and 1% of total revenues, respectively. Sales to marine and other markets during 2023 and 2022 accounted for 2% and 3% of total revenue, respectively. Most of our sales were of our DC base powers systems during the two years.
Current wording
During 2024 and 2023, sales to international customers accounted for 13% and 21% of total revenue, respectively. Sales to military customers during 2024 and 2023 accounted for 8% and 3% of total revenues, respectively. Sales to marine and other markets during 2024 and 2023 accounted for 4% and 2% of total revenue, respectively. Most of our sales were of our DC base powers systems during the two years.
Previous wording
Cost of Sales. Cost of sales increased by $667, or 5%, to $14,598 during 2023, compared to $13,931 during 2022. Cost of sales as a percentage of net sales increased from 86.8% in 2022 to 95.5% in 2023. During the second half of 2023, our largest telecommunications customer requested that we postpone shipments of our DC power generators. This resulted in under-utilization of our production capacity and an increase in factory overhead absorption. Cost of sales during 2023 includes an inventory write-down of $450 to adjust inventory to net realizable value. We believe we will achieve significant reductions in the cost of sales as a percentage of net sales in the upcoming quarters as we ship orders accumulated in our sales backlog.
Current wording
Cost of Sales. Cost of sales decreased by $1,942 or 13%, to $12,656 during 2024, compared to $14,598 during 2023. Cost of sales as a percentage of net sales decreased from 95.5% in 2023 to 90.6% in 2024 primarily as a result of a decrease in factory overhead absorption as compared to the same period in 2023. We believe we can achieve significant reductions in the cost of sales in 2025 as a percentage of net sales as volumes in production increase. Cost of sales includes inventory write-downs of $900 in 2024, and $450 in 2023, to adjust inventory to net realizable value.
Previous wording
Gross Profit. We recognized a gross profit of $695 during 2023, as compared to a gross profit of $2,125 during 2022, which represents a decrease in gross profit of $1,430 or 67%. Gross profit as a percentage of net sales decreased to 4.5% in 2023, as compared to 13.2% in 2022. The decrease in gross profit during 2023 was primarily attributable to a decrease in factory overhead absorption resulting from lower sales primarily during the second half of 2023 and an inventory write-down of $450 included in the cost of sales during 2023.
Current wording
Gross Profit. We recognized a gross profit of $1,314 during 2024, as compared to a gross profit of $695 during 2023, which represents an increase in gross profit of $619 or 89%. Gross profit as a percentage of net sales increased to 9.4% in 2024, as compared to 4.5% in 2023. The increase in gross profit during 2024 was primarily because of improved labor efficiencies in manufacturing resulting from higher production volumes primarily during the second and third quarters of 2024.
Previous wording
Sales and MarketingExpenses. Sales and marketing expenses decreased $299 to $1,172 during 2023, as compared to $1,471 during 2022. The decrease was attributable to a slight decrease in sales support staff during 2023 as compared the same period in 2022. We plan to increase our sales force and increase our marketing and tradeshow activities in 2024 to support our diversification strategy and expand our customer base in all market segments.
Current wording
Sales and MarketingExpenses. Sales and marketing expenses decreased $162 to $1,010 during 2024, as compared to $1,172 during 2023. The decrease was attributable to a slight decrease in sales support staff during 2024 as compared the same period in 2023. We plan to increase our sales force and increase our marketing and tradeshow activities in 2025 to support our diversification strategy and expand our customer base in all market segments.
Previous wording
*Research and Development Expenses.*During 2023, research and development expenses decreased by $238 to $1,222, as compared to $1,460 during 2022. The decrease in 2023 is attributed to a decrease in engineering staff during 2023 as compared to 2022. Our research and development efforts during 2023 primarily focused on developing our new 27 kW power system, new software for our new 4Y Toyota engine control system, mobile EV chargers, and solar hybrid power systems. We continue to search for qualified engineers to join our engineering team and to support our customer diversification efforts.
Current wording
*Research and Development Expenses.*During 2024, research and development expenses decreased by $451 to $771, as compared to $1,222 during 2023. The decrease in 2024 is attributed to a decrease in engineering staff during 2024 as compared to 2023. Our research and development efforts during 2024 primarily focused on product customization on new customers orders, our mobile EV chargers, and solar hybrid power systems. We continue to search for qualified engineers to join our engineering team and to support our customer diversification efforts.
Previous wording
General and Administrative Expenses. Our general and administrative expenses decreased by $436 to $4,291 during 2023, as compared to $4,727 during 2022. The decrease in general and administrative expenses during 2023 was primarily due to not having stock-based compensation during 2023, as compared to stock-based compensation expense of $515 during 2022, coupled with a slight increase in consulting services, rent, and bank fees during 2023.
Current wording
General and Administrative Expenses. Our general and administrative expenses decreased by $383 to $3,908 during 2024, as compared to $4,291 during 2023. The decrease in general and administrative expenses during 2024 was primarily due a decrease in the number of general and administrative staff during 2024, as compared to 2023.
Previous wording
*Net Loss.*As a result of the factors identified above, we generated a net loss of $6,548, or ($0.49) per basic and diluted share, for 2023, as compared to net loss of $5,584, or ($0.43) per basic and diluted share, for 2022, an increase loss of $964. The increase in net loss is primarily attributed to a decrease in net sales of $763 due postponement of shipments of our DC power generators during the second half of 2023 as requested by our largest telecommunications customer, an increase in interest expense primarily related to our line of credit with Pinnacle Bank of $508, and an inventory write-down of $450 recorded in the cost of sales during 2023 to adjust inventory to net realizable value.
Current wording
*Net Loss.*As a result of the factors identified above, we generated a net loss of $4,677, or ($1.86) per basic and diluted share, for 2024, as compared to net loss of $6,548, or ($3.45) per basic and diluted share, for 2023, a decrease loss of $1,871.
Previous wording
The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern. For the year ended December 31, 2023, the Company recorded a net loss of $6,548 and used cash in operations of $3,430. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2023, audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.
Current wording
The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern. For the year ended December 31, 2024, the Company recorded a net loss of $4,677 and used cash in operations of $536. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2024, audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.
Previous wording
During the year ended December 31, 2023, we funded our operations primarily from cash on hand. As of December 31, 2023, we had working capital of $11,775, as compared to working capital of $17,367 at December 31, 2022. This $5,592 decrease in working capital is primarily attributable to a $338 increase in cash and cash equivalents resulting from net cash of $3,430 used in operating activities, net cash used in investing activities of $194 for the acquisition of new property and equipment, and net cash from financing activities of $3,962 which includes net proceeds of $1,556 from sales of 4,600,000 shares of common stock in December 2023 and net proceeds of $2,354 from our credit facility.
Current wording
During the year ended December 31, 2024, we funded our operations primarily from cash on hand. As of December 31, 2024, we had working capital of $7,037, as compared to working capital of $11,775 at December 31, 2023. This $4,738 decrease in working capital is primarily attributable to a $51 decrease in cash and cash equivalents resulting from net cash of $536 used in operating activities, net cash used in investing activities of $19 for the acquisition of new property and equipment, and net cash from financing activities of $504 which includes net proceeds of $559 from our credit facility.
Previous wording
On December 31, 2023, and December 31, 2022, our net trade receivables totaled $1,676 and $2,230, respectively. On December 31, 2023, $1,156 (69%) and $264 (16%) represented the two largest open customer account balances, while $2,006 (90%) represented the largest open customer account balance on December 31, 2022.
Current wording
On December 31, 2024, and December 31, 2023, our net trade receivables totaled $2,153 and $1,676, respectively. On December 31, 2024, $1,771 (82%) represented the largest open customer account balance, while $1,156 (69%) and $264 (16%) represented the two largest open customer account balances on December 31, 2023.
Previous wording
At December 31, 2021, we recognized $2,000 related to the ERC for salaries and benefits expenses incurred during 2021 resulting in a refundable tax credit. The ERC assist business owners and their employees by providing an incentive to keep workers on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage. As of December 31, 2023, the ERC is still being processed by the IRS.
Current wording
At December 31, 2021, we recognized $2,000 related to the ERC for salaries and benefits expenses incurred during 2021 resulting in a refundable tax credit. The ERC assist business owners and their employees by providing an incentive to keep workers on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage. In May 2024, the Company received $2,000 of the ERC receivable.
Previous wording
Our available capital resources on December 31, 2023, consisted primarily of $549 in cash and cash equivalents, as compared to $211 as of December 31, 2022. We expect our future capital resources will consist primarily of cash on hand, cash generated by operations, drawdowns on our credit facility with Pinnacle Bank, funds from the ERC, and future debt or equity financings, if any.
Current wording
Our available capital resources on December 31, 2024, consisted primarily of $498 in cash and cash equivalents, as compared to $549 as of December 31, 2023. We expect our future capital resources will consist primarily of cash on hand, cash generated by operations, drawdowns on our credit facility with Pinnacle Bank and future debt or equity financings, if any.
Previous wording
Effective September 30, 2020, we entered into a Loan and Security Agreement, or Loan Agreement, with Pinnacle. The Loan Agreement was amended by the First Modification to Loan and Security Agreement on October 7, 2020. The Loan Agreement’s initial term ended on September 30, 2022. On November 3, 2022, we executed the Second Modification to Loan and Security Agreement with Pinnacle for a two-year term with an expiration date of September 30, 2024.
Current wording
Effective September 30, 2020, we entered into a Loan and Security Agreement, or Loan Agreement, with Pinnacle. The Loan Agreement was amended by the First Modification to Loan and Security Agreement on October 7, 2020. The Loan Agreement’s initial term ended on September 30, 2022. On November 3, 2022, we executed the Second Modification to Loan and Security Agreement with Pinnacle for a two-year term with an expiration date of September 30, 2024. On September 23, 2024, the Loan and Security Agreement with Pinnacle was renewed for two years and expires September 30, 2026.
Previous wording
We have an outstanding balance of $4,238 under the Loan Agreement at December 31, 2023. As of December 31, 2023, we had availability under the Loan Agreement of $376 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.
Current wording
We have an outstanding balance of $4,797 under the Loan Agreement at December 31, 2024. During 2024, we advanced a net of $559 under the Loan Agreement. As of December 31, 2024, we had availability under the Loan Agreement of $654 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.
Previous wording
Net cash used in operating activities for 2023 was $3,430, as compared to $6,507 for the same period in 2022. This increase in net cash used in 2023 was primarily due to a net loss of $6,548, a decrease in accounts receivable of $554, a decrease in prepaid expenses of $2,174, a decrease in customer deposits of $508, and an increase in inventories of $1,062.
Current wording
Net cash used in operating activities for 2024 was $536, as compared to $3,430 for the same period in 2023. This decrease in net cash used in 2024 was primarily due to a net loss of $4,677, a decrease in ERC receivable of $2,000, a decrease in refundable income taxes of $787, and a decrease in accounts payable of $1,354.
Previous wording
Net cash used in investing activities for 2023 totaled $194, as compared to $25 for 2022, an increase of $169. The net cash used in investing activities in 2023 was attributable to the purchase of two robotic welders to help improve efficiencies in manufacturing.
Current wording
Net cash used in investing activities for 2024 totaled $19, as compared to $194 for 2023, a decrease of $175. Net cash used in investing activities was primarily due to acquisitions of property and equipment.
Previous wording
As of December 31, 2023, we had a backlog of $3,862. 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 December 31, 2023, was comprised of the following elements: 60% in purchases of DC power systems by telecommunications customers in the U.S., 31% in purchases by telecommunications customers outside the U.S., 6% in purchases in military markets, and 3% in purchases by customers in the marine industry. We believe the majority of our backlog will be shipped within the next twelve months. However, there can be no assurance that we will be successful in fulfilling such orders and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected in our backlog. During the first quarter of 2024, the Company received $5,400 in new purchase orders from customers for its DC power systems. Combined with open orders as of April 1, 2024, the Company has a total sales backlog of $7,700, which 40% of the orders are from its largest telecommunications customer in the U.S., 50% from other telecommunications customers, 8% from customers in military markets, and 2% from Marine, EV and other markets. Of the $7,700 in the sales backlog, 36% of the orders are from customers in international markets. The Company expects to complete shipment of these orders within the next six to twelve months.
Current wording
As of December 31, 2024, we had a backlog of $1,306. The amount of backlog represents revenue that we anticipate recognizing in the future, as evidenced by purchase orders and other purchase commitments received from customers, but on which work has not yet been initiated or with respect to which work is currently in progress. Backlog at December 31, 2024 was comprised of the following elements: 56% in purchases of DC power systems by telecommunications customers in the U.S., 35% in purchases in military markets, and 9% in purchases by customers in the marine and other markets. We believe the majority of our backlog will be shipped within the next six to twelve months. However, there can be no assurance that we will be successful in fulfilling such orders and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected in our backlog.