Polar Power Inc
For the period ended Mar 31, 2025. Filed May 15, 2025.
View on SEC.govAbout this filing
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, 2025 · Filed May 15, 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 2024-09-30; filed 2024-11-14.
0001493152-24-045866
ITEM 2. Management’s Discussion And Analysis Of Financial Condition And Results Of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001641172-25-010887
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 77 previous paragraphs and 61 current paragraphs.
26 unchanged; 27 reworded; 7 added; 24 removed; 0 previous and 1 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 (7)
Current report
Our DC power systems are available in diesel, natural gas, LPG / propane and renewable formats, with diesel, natural gas and propane gas being the predominate formats.
Current report
During the three months ended March 31, 2025 and March 31, 2024, 82% and 71%, respectively, of our total net sales were within the telecommunications market. During the first quarter of 2025, our two largest customers represented 71% and 17% of our total net sales, respectively, one being a Tier-1 telecommunications customer and one being a customer in the military market in the U.K. During the same period in 2024, our two largest customers represented 49% and 25% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S. and one being a customer in the U.S. military market. 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, 2025 and 2024, sales to international customers accounted for 18% and 6% of total net sales, respectively. Sales to military customers during three months ended March 31, 2025 and 2024 accounted for 17% and 26% of total net sales, respectively. During three months ended March 31, 2025 and 2024, sales to marine customers and customers in other markets accounted for 1% and 3% of total net sales, respectively.
Current report
None.
Current report
Critical Accounting Policies
Current report
We believe revenue during the quarter ended March 31, 2025 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 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.
Current report
We did not have any investing activities for the three months ended March 31, 2025 and March 31, 2024.
Removed paragraphs (24)
Previous report
We believe it is more efficient to build power systems around the DC generator because it is then simpler to integrate it with battery storage and solar photovoltaics which also operate on DC. Many applications in communications, water pumping, lighting, vehicle and vessel propulsion, security systems operate on DC power only. Many micro-grids and energy storage are DC-based and use inverters to convert the DC to AC.
Previous report
During the three months ended September 30, 2024 and 2023, 91% and 96%, respectively, of our total net sales were within the telecommunications market. During the three months ended September 30, 2024 and 2023, sales to international customers accounted for 10% and 1% of total net sales, respectively; sales to military customers accounted for 8% and 0% of total net sales, respectively; and sales to other customers accounted for 2% and 4% of total net sales, respectively.
Previous report
During the nine months ended September 30, 2024 and 2023, 90% and 96%, respectively, of our total net sales were within the telecommunications market. During the nine months ended September 30, 2024 and 2023, sales to international customers accounted for 15% and 24% of total net sales, respectively; sales to military customers accounted for 9% and 3% of total net sales, respectively; and sales to other customers accounted for 2% and 1% of total net sales, respectively.
Previous report
Solar combined with the Toyota 1KS and 4Y engines along with our alternators and controls offer clean and renewable energy for applications including HVAC, refrigeration, EV charging, peak power shaving, off grid power, and backing up the grid for home and business.
Previous report
Our sales backlog as of September 30, 2024 was $3,118, of which our telecommunications customers accounted for 69%, customers in military markets accounted for 17%, customers in the marine markets accounted for 13%, and customers in other markets accounted for 1%.
Previous report
In July 2024, Michael Field was appointed a director of the Company. Mr. Field joins our Board of Directors and serves in our audit committee, compensation committee and nominating and corporate governance committee of the Board. He is the chair of the compensation committee and chair of the nominating and corporate governance committee of the Board. Mr Field has over four decades of experience in global manufacturing and equipment spanning engineering and technology development, lean manufacturing, factory and systems integration, product management and channel development. He has held key operating and managerial roles and positions both at the divisional and executive levels at UTC Carrier Corporation, PRI Automation and Brooks Automation, and is currently the President and CEO of The Raymond Corporation, which is in the materials handling market.
Previous report
Based on the appointment of Michael Field to our Board of Directors, audit committee and compensation committee, we regained compliance with the audit and compensation committee requirements for continued listing on the Nasdaq Capital Market set forth in Listing Rules 5605(c)(2) and 5605(d)(2).
Previous report
On November 11, 2024, we held our annual meeting of stockholders. At the meeting, our stockholders approved an amendment to our Certificate of Incorporation, in substantially the form attached to the proxy statement as Appendix A to allow the Board of Directors to effect, in its discretion prior to December 31, 2024, a reverse stock split of all of our issued and outstanding common stock, par value $0.0001 per share, at a specific ratio, ranging from one-for-three (1:3) to one-for-twenty (1:20), with the timing and ratio to be determined by the Board if effected. On November 11, 2024, our Board approved a reverse stock split at a ratio of one-for-seven (1:7) (the “Reverse Stock Split”). We plan to effect the Reverse Stock Split with the market effective date of November 19, 2024.
Previous report
Critical Accounting Policies and Estimates
Previous report
For the nine months ended September 30, 2024, our net sales were $11,348, as compared to $11,688 for the same period in 2023. Gross margins in 2024 were 25.1%, as compared to 18.2% in 2023. Our net loss was $1,628 for the nine-months ended September 30, 2024, as compared to $3,393 for the same period in 2023.
Previous report
We continue to add large customers as a result of our progress in diversifying our customer base. Two customers added this year represented 18% and 12% of our total net sales for the three months ended September 30, 2024. We have also seen an increase in sales to customers in military markets as compared to last year. Sales to military customers accounted for 8% of our total net sales for the quarter ended September 2024, as compared to zero sales in the same period in 2023.
Previous report
We believe we are making significant progress in diversifying our customer base by pursuing opportunities to new markets, such as homes and apartment buildings, electric vehicles and drones, greenhouses, pools, and more, for clean fuel and solar hybrid DC power generation.
Previous report
Net sales to telecommunications customers in the U.S. accounted for 89% of our total net sales for the three months ended September 30, 2024, as compared to 95% for the same period in 2023. Net Sales to military customers represented 8% of total net sales for the three months ended September 30, 2024, as compared zero during the same period in 2023. Our international sales represented 10% of our total net sales for the three months ended September 30, 2024, as compared to 1% in international sales in the same period in 2023.
Previous report
Cost of Sales. Cost of sales during the three months ended September 30, 2024 increased by $1,471, or 73%, to $3,490, as compared to $2,019 during the same period in 2023. The increase was primarily as a result of higher production volumes during the recent quarter. Cost of sales as a percentage of net sales during the three months ended September 30, 2024 decreased to 71.0% as compared to 105.7% in the same period in 2023 primarily as a result of improvements in labor efficiencies gained on higher production volumes on standard products.
Previous report
Nine months Ended September 30, 2024 Compared to the nine months Ended September 30, 2023
Previous report
*Net Sales.*Net sales decreased $340, or 3%, to $11,348 for the nine months ended September 30, 2024, as compared to $11,688 for the same period in 2023. The decrease in sales was primarily attributed to shortages in manufacturing staff during the second quarter of 2024 and a slow start in shipments at the beginning of the year. For the nine months ended September 30, 2024, sales to our largest telecommunication customer in the U.S. accounted for 44% of our total net sales, our second largest customer being a telecommunications customer in Puerto Rico represented 17% of our total net sales. For the same period in 2023, 52% of our total net sales were generated from our largest U.S. telecommunications customer, and 22% of our total net sales were generated from our second largest customer being a telecommunications customer in the South Pacific Islands. There was no other revenue from customers in excess of 10% of total net sales in either period.
Previous report
*Gross Profit.*Gross profit during the nine months ended September 30, 2024 increased by $732, or 34%, to gross profit of $2,854, as compared to gross profit of $2,122 during the same period in 2023. Our gross profit as a percentage of net sales was 25.1% for the nine months ended September 30, 2024, as compared to 18.2% in the same period in 2023. The increase in gross profit as a percentage of net sales was primarily due to lower labor costs and improved factory overhead absorption.
Previous report
*Sales and Marketing Expenses.*During the nine months ended September 30, 2024, sales and marketing expenses decreased by $171, or 19%, to $746, as compared to $917 during the same period in 2023. The decrease was attributable to a decrease in sales support staff and travel related expenses, as compared to the same period in 2023.
Previous report
*Research and Development Expenses.*During the nine months ended September 30, 2024, research and development expenses decreased by $397, or 40%, to $586, as compared to $983 during the same period in 2023. The decrease was primarily due to a decrease in research and development support staff and consulting services during the nine months ended September 30, 2024, as compared to the same period in 2023. We plan to recruit additional engineers during the second half of 2024 to support growth and our customer diversification efforts.
Previous report
General and Administrative Expenses. General and administrative expenses decreased by $239, or 7%, to $3,001 during the nine months ended September 30, 2024, as compared to $3,240 during same period in 2023. The decrease in general and administrative expenses during the nine months ended September 30, 2024 was primarily due to a decrease in general and administrative staff, as compared to the same period in 2023.
Previous report
Interest and Finance Costs. Interest and finance costs for the nine months ended September 30, 2024 was $496, as compared to $375 during the same period in 2023, an increase of $121. Our interest expense for the current period resulted primarily from an increase in borrowing from our line of credit with Pinnacle.
Previous report
*Net Loss.*For the nine months ended September 30, 2024, we incurred net loss of $1,628, or $(0.09) per basic and diluted share, as compared to net loss of $3,393, or $(0.26) per basic and diluted share for the nine months ended September 30, 2023.
Previous report
At December 31, 2021, we recognized $2,000 related to the ERC for salaries and benefits expenses incurred during 2021 resulting in a refundable tax credit. The ERC assist business owners and their employees by providing an incentive to keep workers on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage. In May 2024, we received $2,000 of the ERC receivable.
Previous report
Net cash used in investing activities for the nine months ended September 30, 2024 was $18, as compared to net cash used in investing activities of $194 for the same period in 2023. Net cash used in investing activities was primarily due to acquisitions of property and equipment.
Reworded paragraphs (27)
Previous wording
References to the “Company,” “Polar,” “our,” “us” or “we” refer to Polar Power, Inc. All dollar amounts are presented in thousands, except share and per-share data and where otherwise noted.
Current wording
All dollar amounts are presented in thousands, except share and per-share data and where otherwise noted. Share and per share data have been retroactively adjusted to reflect the decreased number of shares resulting from a 1 for 7 reverse stock split which took effect on November 18, 2024.
Previous wording
We design, manufacture, and sell DC power generators, renewable energy and cooling systems for applications primarily in the telecommunications market and, to a lesser extent, in other markets, including military, electric vehicle, marine and industrial. We are continuously diversifying our customer base and are selling our products into non-telecommunication markets and applications at an increasing rate. The changes in customer diversity are reported in the financial section.
Current wording
We design, manufacture, and sell DC power generators, renewable energy and cooling systems for applications primarily in the telecommunications market and, to a lesser extent, in other markets, including military, electric vehicle charging, marine and industrial. We are continuously diversifying our customer base and are selling our products into non-telecommunication markets and applications at an increasing rate.
Previous wording
Within the various markets we service, our DC power systems provide reliable and low-cost DC power to service applications that do not have access to the utility grid (i.e., prime power and mobile applications) or have critical power needs and cannot be without power in the event of utility grid failure (i.e., back-up power applications).
Current wording
Within the various markets we service, our DC power systems provide reliable and low-cost DC power to service applications that do not have access to the utility grid (i.e., prime power applications and mobile applications) or have critical power needs and cannot be without power in the event of utility grid failure (i.e., back-up power applications) or charge batteries of various chemistries to be used in electric vehicle or renewable storage applications.
Previous wording
We continue to expand our customer base internationally and across the various markets we service. Sales of our DC power systems to customers in international markets averaged over 20% of total net revenues per annum in the last two years. Prior to this, sales to international customers averaged less than 10% of total revenues per annum. We have several telecommunications customers in the South Pacific region, purchasing our DC generators to develop the telecommunications infrastructure in this region. We believe the implementation and ongoing development of broadband networks along with programs to develop the telecommunications infrastructure in rural and underdeveloped countries will continue to fuel our growth in the telecommunications market over the next five to ten years.
Current wording
At the international level, we have several telecommunications customers in the south pacific region purchasing our DC generators to develop the telecommunications infrastructure in this region. We believe the implementation and ongoing development of 5G networks along with programs to develop the telecommunications infrastructure in rural and underdeveloped countries will continue to fuel our growth in the telecommunications market over the next five to ten years.
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. We expect to complete upgrading our EV chargers by the end of the fourth quarter 2024. Mobile EV chargers are used for emergency roadside service providing a fast-charging solution for EVs that have run out of charge before reaching a stationary charging facility.
Current 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 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.
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 they typically represent long-term contracts, and they tend to cover the cost of product development. Marine sales interest have increased significantly both domestically and overseas due to the increased performance in comfort and fuel economy. Also, there are increasing restrictions on the use of diesel and gasoline engines in many lakes and waterways making way for our natural gas and propane operated generators. Using natural gas and propane for home and office charging for electric vehicle and forklifts is still a market under development. Same is true for diesel mobile chargers for emergency roadside assistance.
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 United Nations High Commissioner for Refugees (“UNHCR”), a United Nations organization. The product included a 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
The impact of inflation and rapidly changing prices has not impacted our operations during the three and nine months ended September 30, 2024. Rapid changes in the global economy may cause significant spikes in inflation which may have an impact in our financial condition during 2024 and beyond. Very small portion of our sales is a result of fixed contracts thereby resulting in negligible impact on our gross profits.
Current wording
The impact of inflation and rapidly changing prices has not impacted our operations during the three months ended March 31, 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 September 30, 2024 were $4,914, which represents a 157% increase in net sales, as compared to $1,911 for the three months ended September 30, 2023. Our gross margins for the three-month period in 2024 improved to 29.0%, up from a negative 5.7% at the same period in 2023. We achieved our second consecutive profitable quarter in over two years with a net profit of $13 for the three months ended September 30, 2024, as compared to a net loss of $1,844 for the three months ended September 30, 2023.
Current wording
Our net sales for the three months ended March 31, 2025 were $1,723, which represents a 3% decrease in net sales as compared to $1,775 for the three months ended March 31, 2024. We reported a net loss of $1,265 for the three months ended March 31, 2025, as compared to a net loss of $2,142 for the same period in 2024. Cost reductions in operating expenses helped improve the net loss from 2024 to 2025.
Previous wording
*Net Sales.*Net sales increased $3,003, or 157%, to $4,914 for the three months ended September 30, 2024, as compared to $1,911 for the same period in 2023. The increase in sales was primarily due to an increase of $2,641 in sales of our DC generators to customers in the telecommunications market. For the three months ended September 30, 2023, sales to our three largest telecommunications customers account for 46%, 18% and 12% of our total net sales, respectively. In the three months ended September 30, 2023, our largest telecommunications customer represented 65% of 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 decreased $52, or 3%, to $1,723 for the three months ended March 31, 2025, as compared to $1,775 for the same period in 2024. During the three months ended March 31, 2025, our two largest customers accounted for 71% and 17% of our total net sales, respectively. During the same period in 2024, our two largest customers accounted for 49% and 25% of our total net sales, respectively. There was no other revenue from customers in excess of 10% of total net sales in either period. For three months ended March 31, 2025, our aftermarket parts revenues reached 28% of our total revenues compared to 6.8% revenues for three months ended March 31, 2024. We believe this increase in aftermarket parts revenue is attributed to large aging population of our products under service at telecom sites.
Previous wording
Net sales to telecommunications customers in the U.S. accounted for 78% of our total net sales for the nine months ended September 30, 2024, as compared to 72% for the same period in 2023. Our international sales represented 15% of our net sales for the nine months ended September 30, 2024, as compared to 24% in international sales in the same period in 2023.
Current wording
Net sales to telecommunications customers in the U.S. accounted for 82% of our total net sales for the three months ended March 31, 2025, as compared to 65% for the same period in 2024. Our international sales represented 18% of our net sales in the three months ended March 31, 2025, as compared to 6% in international sales in the same period in 2024.
Previous wording
Cost of Sales. Cost of sales during the nine months ended September 30, 2024 decreased by $1,072, or 11%, to $8,494, as compared to $9,566 during the same period in 2023. Cost of sales as a percentage of net sales during the nine months ended September 30, 2024 were 74.9%, as compared to 81.8% in the same period in 2023. The decrease in cost of sales was primarily as a result of improvements in labor efficiencies gained on higher production volumes on standard products.
Current wording
Cost of Sales. Cost of sales during the three months ended March 31, 2025 decreased by $774, or 36%, to $1,403, as compared to $2,177 during the same period in 2024. Cost of sales as a percentage of net sales during the three months ended March 31, 2025 decreased to 81.4% as compared to 122.6% in the same period in 2024. The decrease in cost of sales was primary attributable to a decrease in factory overhead absorption in three months ended March 31, 2025 as compared to the same period in 2024. We also experienced a 63% decrease in field services related to warranty and generator commissioning expenses.
Previous wording
*Gross Profit.*We had a gross profit of $1,424 for the three months ended September 30, 2024, which is an increase of $1,532 or 1,419%, as compared to gross loss of $108 during the same period in 2023. Our gross profit as a percentage of net sales was 29.0% for the quarter ended September 30, 2024, as compared to a gross loss as a percentage of net sales of 5.7% in the same period in 2023. The increase in gross profit and margins for the three months ended September 30, 2024 was primarily a result higher revenues, lower labor costs, and improved factory overhead absorption.
Current wording
*Gross Profit (Loss).*We had a gross profit of $320 for the three months ended March 31, 2025, which is an increase of $722, or 180%, as compared to gross loss of $402 during the same period in 2024. The increase in gross profit for the three months ended March 31, 2025, was primarily a result of a decrease in factory overhead absorption and reduced spending on field support services during the three months ended March 31, 2025.
Previous wording
*Sales and Marketing Expenses.*During the three months ended September 30, 2024, sales and marketing expenses decreased by $22, or 8%, to $252, as compared to $274 during the same period in 2023. The decrease was attributable to a decrease in sales support staff and travel related expenses during the quarter as compared to the same period in 2023.
Current wording
*Sales and Marketing Expenses.*During the three months ended March 31, 2025, sales and marketing expenses increased by $29, or 13%, to $260, as compared to $231 during the same period in 2024. The increase was attributable to a 47% increase in marketing expenditures including tradeshow participation during three months ended March 31,2025 as compared to the same period in 2024. 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 the three months ended September 30, 2024, research and development expenses decreased by $127, or 42%, to $172, as compared to $299 during the same period in 2023. The decrease was primarily due to a decrease in research and development support staff and consulting services during the three months ended September 30, 2024, as compared to the same period in 2023. We plan to recruit additional engineers during 2024 to support new product developments and our customer diversification efforts.
Current wording
*Research and Development Expenses.*During the three months ended March 31, 2025, research and development expenses decreased by $60 or 27%, to $160, as compared to $220 during the same period in 2024. The decrease in research and development expenses resulted from a decrease in new product development activity during the period ended March 31, 2025. 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 $32, or 3%, to $960 during the three months ended September 30, 2024, as compared to $992 during same period in 2023. The decrease in general and administrative expenses during the three months ended September 30, 2024 was primarily due to a decrease in general and administrative staff.
Current wording
General and Administrative Expenses. General and administrative expenses were $1,001 for the three months ended March 31, 2025, as compared to $1,126 for the same period in 2024. The 10% decrease in general and administrative expenses resulted from consolidating administrative tasks to improve efficiencies.
Previous wording
Interest and Finance Costs. Interest expense for the three months ended September 30, 2024 was $153, as compared to $171 during the same period in 2023. The decrease in interest expense resulted primarily from a decrease in borrowing from our line of credit with Pinnacle Bank (“Pinnacle”) during the current period.
Current wording
Interest and Finance Costs. Interest expense for the three months ended March 31, 2025 was $164, as compared to $163 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 Income (Loss).*As a result of the factors identified above, we reported net income of $13, or $0.00 per basic and diluted share, for the three months ended September 30, 2024, as compared to net loss of $1,844, or $(0.14) per basic and diluted share, for the same period in 2023.
Current wording
*Net Loss.*As a result of the factors identified above, we reported net loss of $1,265, or $(0.50) per basic and diluted share, for the three months ended March 31, 2025, as compared to net loss of $2,142, or $(0.85) per basic and diluted share, for the same period in 2024.
Previous wording
During the nine months ended September 30, 2024, we funded our operations primarily from cash on hand. As of September 30, 2024, we had working capital of $10,132, as compared to working capital of $11,775 at December 31, 2023. This $1,643 decrease in working capital is primarily attributable to $51 decrease in cash and cash equivalents resulting from net cash of $400 used in operating activities, and net cash of $18 used in investing activities, and net cash of $367 from financing activities.
Current wording
During the three months ended March 31, 2025, we funded our operations primarily from cash on hand. As of March 31, 2025, we had working capital of $5,823, as compared to working capital of $7,037 at December 31, 2024. This $1,214 decrease in working capital is primarily attributable to $430 decrease in cash and cash equivalents resulting from net cash of $584 used in operating activities, net cash of $nil used in investing activities, and net cash of $154 from financing activities.
Previous wording
On September 30, 2024 and December 31, 2023, our net trade receivables totaled $2,949 and $1,676, respectively. On September 30, 2024, $2,263 (77%), and $284 (10%) represented the two largest open customer account balances, while $1,156 (69%) and $264 (16%) represented the two largest open customer account balances on December 31, 2023.
Current wording
On March 31, 2025 and December 31, 2024, our net trade receivables totalled $1,687 and $2,153, respectively. On March 31, 2025, $1,249 (74%) and $319 (19%) 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 September 30, 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, if any, drawdowns on our credit facility with Pinnacle and future debt or equity financings, if any.
Current wording
Our available capital resources on March 31, 2025 consisted primarily of $68 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
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. At October 1, 2024, the Loan Agreement was renewed for another two-year term with an expiration date of September 30, 2026.
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 $4,661 under the Loan Agreement at September 30, 2024. As of September 30, 2024, we had availability under the Loan Agreement of $1,432 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.
Current wording
We had an outstanding balance of $4,797 under the Loan Agreement at December 31, 2024. During the quarter ended March 31, 2025, we paid a net of $9 under the Loan Agreement. As of March 31, 2025, the outstanding balance under the line of credit was $4,788 and we had availability under the Loan Agreement of $33 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.
Previous wording
The following table sets forth the significant sources and uses of cash for the 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, 2024 was $400 as compared to net cash used in operating activities of $3,084 for the same period in 2023. This decrease in net cash used in 2024 was primarily due to a net loss of $1,628, a decrease in ERC receivable of $2,000, a decrease in refundable income taxes of $787, and a decrease in accounts payable of $1,416.
Current wording
Net cash used in operating activities for the three months ended March 31, 2025 was $584 as compared to net cash used in operating activities of $989 for the same period in 2024. This decrease in net cash used in the three months ended March 31, 2025 was primarily due to a net loss of $1,265, a decrease in accounts receivable of $466, an increase in accounts payable of $301, an increase in customer deposits of $153, and an increase in cash purchases of inventory of $241.
Previous wording
Net cash from financing activities totaled $367 for the nine months ended September 30, 2024, as compared to $3,363 used by financing activities during the same period in 2023. This cash provided was primarily borrowings from the line of credit with Pinnacle.
Current wording
Net cash provided by financing activities totalled $162 for the three months ended March 31, 2025, as compared to $154 provided by financing activities during the same period in 2024. This cash provided was primarily net borrowings from the line of credit with Pinnacle Bank coupled with a notes payable of $163 issued by a related party.
Previous wording
As of September 30, 2024, we had a sales backlog of $3,118. 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 September 30, 2024 was comprised of the following elements: 68% in purchases of DC power systems by telecommunications customers, 17% in purchases from customers in the military market, 13% in purchases from customers in the marine market, and 1% in purchases by customers from other markets. The backlog as of September 30, 2024 consisted of orders 100% from customers in the U.S. 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.
Current wording
As of March 31, 2025, we had a backlog of $2,238. 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, 2025, was comprised of the following elements: 86% in purchases of DC power systems by telecommunications customers in the U.S., 7% in purchases by customers in the military markets, and 8% in purchases by customers in other markets. We believe the majority of our backlog will be shipped within the next six months.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our gross profit as a percentage of net sales was 18.6% for the quarter ended March 31, 2025, as compared to a gross loss as a percentage of net sales of 22.6% in the same period in 2024.