Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 15, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-37960 | |
Entity Registrant Name | POLAR POWER, INC. | |
Entity Central Index Key | 0001622345 | |
Entity Tax Identification Number | 33-0479020 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 249 E. Gardena Blvd. | |
Entity Address, City or Town | Gardena | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90248 | |
City Area Code | (310) | |
Local Phone Number | 830-9153 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | POLA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,788,203 | |
Entity Information, Former Legal or Registered Name | Not Applicable |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 2,656 | $ 5,101 |
Accounts receivable | 3,994 | 4,243 |
Inventories | 11,985 | 9,017 |
Prepaid expenses | 4,386 | 4,006 |
Employee retention credit receivable | 2,000 | 2,000 |
Income taxes receivable | 787 | 787 |
Total current assets | 25,808 | 25,154 |
Other assets: | ||
Operating lease right-of-use assets, net | 580 | 914 |
Property and equipment, net | 770 | 1,019 |
Deposits | 93 | 93 |
Total assets | 27,251 | 27,180 |
Current liabilities | ||
Accounts payable | 135 | 328 |
Customer deposits | 3,485 | 897 |
Accrued liabilities and other current liabilities | 1,214 | 1,206 |
Current portion of operating lease liabilities | 588 | 721 |
Current portion of notes payable | 248 | 242 |
Total current liabilities | 5,670 | 3,394 |
Notes payable, net of current portion | 143 | 268 |
Operating lease liabilities, net of current portion | 47 | 268 |
Total liabilities | 5,860 | 3,930 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.0001 par value, 50,000,000 shares authorized, 12,805,680 shares issued and 12,788,203 shares outstanding on June 30, 2022, and December 31, 2021. | 1 | 1 |
Additional paid-in capital | 36,816 | 36,816 |
Accumulated deficit | (15,386) | (13,527) |
Treasury Stock, at cost (17,477 shares) | (40) | (40) |
Total stockholders’ equity | 21,391 | 23,250 |
Total liabilities and stockholders’ equity | $ 27,251 | $ 27,180 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 12,805,680 | 12,805,680 |
Common stock, shares outstanding | 12,788,203 | 12,788,203 |
Treasury stock, shares | 17,477 | 17,477 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Net Sales | $ 4,274 | $ 4,847 | $ 7,983 | $ 8,137 |
Cost of Sales | 3,213 | 3,880 | 6,017 | 7,228 |
Gross profit | 1,061 | 967 | 1,966 | 909 |
Operating Expenses | ||||
Sales and marketing | 400 | 379 | 805 | 747 |
Research and development | 350 | 463 | 826 | 952 |
General and administrative | 1,036 | 990 | 2,167 | 1,973 |
Total operating expenses | 1,786 | 1,832 | 3,798 | 3,672 |
Loss from operations | (725) | (865) | (1,832) | (2,763) |
Other income (expenses) | ||||
Interest expense and finance costs | (14) | (15) | (27) | (31) |
Other income (expense), net | 14 | 25 | ||
Total other income (expenses), net | (14) | (1) | (27) | (6) |
Net loss | $ (739) | $ (866) | $ (1,859) | $ (2,769) |
Net loss per share – basic and diluted | $ (0.06) | $ (0.07) | $ (0.15) | $ (0.22) |
Weighted average shares outstanding, basic and diluted | 12,788,203 | 12,788,203 | 12,788,203 | 12,651,672 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 1 | $ 23,643 | $ (12,113) | $ (40) | $ 11,491 |
Begining balance, shares at Dec. 31, 2020 | 11,768,158 | ||||
Net loss | (2,769) | (2,769) | |||
Issuance of common stock for cash, net of offering costs | 12,466 | 12,466 | |||
Issuance of common stock for cash, net of offering costs, shares | 750,000 | ||||
Common stock issued upon exercise of warrants | 707 | 707 | |||
Common stock issued upon exercise of warrants, shares | 287,522 | ||||
Ending balance, value at Jun. 30, 2021 | $ 1 | 36,816 | (14,882) | (40) | 21,895 |
Ending balance, shares at Jun. 30, 2021 | 12,805,680 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 1 | 36,816 | (14,016) | (40) | 22,761 |
Begining balance, shares at Mar. 31, 2021 | 12,805,680 | ||||
Net loss | (866) | (866) | |||
Ending balance, value at Jun. 30, 2021 | $ 1 | 36,816 | (14,882) | (40) | 21,895 |
Ending balance, shares at Jun. 30, 2021 | 12,805,680 | ||||
Beginning balance, value at Dec. 31, 2021 | $ 1 | 36,816 | (13,527) | (40) | 23,250 |
Begining balance, shares at Dec. 31, 2021 | 12,805,680 | ||||
Net loss | (1,859) | (1,859) | |||
Ending balance, value at Jun. 30, 2022 | $ 1 | 36,816 | (15,386) | (40) | 21,391 |
Ending balance, shares at Jun. 30, 2022 | 12,805,680 | ||||
Beginning balance, value at Mar. 31, 2022 | $ 1 | 36,816 | (14,647) | (40) | 22,130 |
Begining balance, shares at Mar. 31, 2022 | 12,805,680 | ||||
Net loss | (739) | (739) | |||
Ending balance, value at Jun. 30, 2022 | $ 1 | $ 36,816 | $ (15,386) | $ (40) | $ 21,391 |
Ending balance, shares at Jun. 30, 2022 | 12,805,680 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (1,859) | $ (2,769) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 264 | 287 |
Changes in operating assets and liabilities | ||
Accounts receivable | 249 | (3,690) |
Inventories | (2,968) | 877 |
Prepaid expenses | (380) | (2,880) |
Income tax receivable | 1,570 | |
Decrease in operating lease right-of-use asset | 334 | 321 |
Accounts payable | (193) | 61 |
Customer deposits | 2,588 | 265 |
Accrued expenses and other current liabilities | 8 | 157 |
Decrease in operating lease liability | (354) | (330) |
Net cash used in operating activities | (2,311) | (6,131) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (15) | |
Net cash used in investing activities | (15) | |
Cash flows from financing activities: | ||
Proceeds from sale of common stock, net of offering cost | 12,466 | |
Proceeds from exercise of warrants | 707 | |
Repayment of notes payable | (119) | (150) |
Net cash provided by (used in) financing activities | (119) | 13,023 |
Increase (decrease) in cash and cash equivalents | (2,445) | 6,892 |
Cash and cash equivalents, beginning of period | 5,101 | 1,646 |
Cash and cash equivalents, end of period | $ 2,656 | $ 8,538 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company Polar Power, Inc. was incorporated in the State of Washington as Polar Products, Inc. and in 1991 reincorporated in the State of California under the name Polar Power, Inc. In December 2016, Polar Power, Inc. reincorporated in the State of Delaware (the “Company”). The Company designs, manufactures and sells direct current, or DC, power systems to supply reliable and low-cost energy to off-grid, bad-grid and backup power, electric vehicle (EV) charging, and nano-grid applications. The Company’s products integrate DC generator, proprietary electronic control systems, lithium batteries and solar photovoltaic (PV) technologies to provide low operating cost and emissions for telecommunications, defense, automotive, nano-grid, EV charging and industrial markets. Liquidity The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the six months ended June 30, 2022, the Company recorded a net loss of $1,859 2,311 2,656 2,806 21,391 20,138 Historically, we have financed our operations through public and private sales of common stock, credit lines from financial institutions, and cash generated from operations to provide the Company the liquidity and capital resources to fund its operating expenses and capital expenditure requirements. The Company expects to continue investing in product development and sales and marketing activities and has taken action to improve our margins, and are continuing to build a strong back log. The long-term continuation of the Company’s business plan is dependent upon the generation of sufficient revenues from its products to offset expenses. 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. Impact of COVID-19 The Company continues to monitor the evolving COVID-19 pandemic and related guidance from international and domestic authorities, including federal, state and local public health authorities and it may need to make changes to its business based on their recommendations. COVID-19 has had, and is likely to continue to have, a material and substantial adverse impact on the Company’s results of operations including, among others, a decrease in the Company’s sales and delays in sourcing of raw materials from suppliers. The Company’s business is directly dependent upon, and correlates closely with, the marketing levels and ongoing business activities of its existing customers and suppliers. In the event of a continued widespread economic downturn caused by COVID-19, the Company could experience a further reduction in current projects, longer sales and collection cycles, deferral or delay of purchase commitments for its DC power systems, a reduction in its manufacturing functionality, higher than normal inventory levels, a reduction in the availability of qualified labor, and increased price competition, all of which could substantially adversely affect its net revenues and its ability to remain a going concern. The extent of the impact of COVID-19 on its operational and financial performance will depend on certain developments, including the duration and potential resurgence of the outbreak, the impact on its customers and sales cycles, the impact on its customer, employee or industry events, the impact on inflation and the effect on the supply chain, all of which are uncertain and cannot be predicted. At this point, the Company is uncertain of the full magnitude that the COVID-19 pandemic may have on our financial condition, liquidity and future results of operations. Basis of Presentation of Unaudited Financial Information The unaudited condensed financial statements of the Company for the three and six months ended June 30, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K for scaled disclosures for smaller reporting companies. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2021 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended December 31, 2021 and 2020 contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 31, 2022. These financial statements should be read in conjunction with that report. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Material estimates relate to the assumptions made in determining reserves for uncollectible receivables, inventory reserves and returns, impairment analysis of long-term assets, valuation allowance on deferred tax assets, income tax accruals, accruals for potential liabilities and warranty reserves and assumptions made in valuing equity instruments issued for services. Actual results may differ from those estimates. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). Substantially all of the Company’s revenue is derived from product sales. The Company also generates revenues from engineering, tech support, and rental services. Product or service revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to its customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the products or services to a customer. The Company regularly reviews its customers’ financial positions to ensure that collectability is reasonably assured. The Company also recognizes revenues from the rental of equipment. The Company’s rental revenues have not been significant to date and have accounted for less than one percent of total revenues for the three and six-month periods ended June 30, 2022 and 2021. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: SCHEDULE OF DISAGGREGATED NET SALES Three months ended 2022 (Unaudited) 2021 (Unaudited) DC power systems $ 4,199 $ 4,635 Engineering & Tech Support Services 32 142 Accessories 43 70 Total net sales $ 4,274 $ 4,847 Six months ended 2022 (Unaudited) 2021 (Unaudited) DC power systems $ 7,816 $ 7,860 Engineering & Tech Support Services 76 170 Accessories 91 107 Total net sales $ 7,983 $ 8,137 The following table shows the Company’s disaggregated net sales by customer type: Three months ended 2022 (Unaudited) 2021 (Unaudited) Telecom $ 4,228 $ 4,440 Government/Military 12 134 Marine 3 14 Other (backup DC power to various industries ) 31 259 Total net sales $ 4,274 $ 4,847 Six months ended 2022 (Unaudited) 2021 (Unaudited) Telecommunications $ 7,898 $ 7,492 Government/Military 29 165 Marine 17 14 Other (backup DC power to various industries ) 39 466 Total net sales $ 7,983 $ 8,137 Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. As of June 30, 2022 and December 31, 2021, inventory has been reduced by cumulative write-downs totaling $ 3,300 3,500 SCHEDULE OF INVENTORIES NET June 30, 2022 (unaudited) December 31, 2021 Raw materials $ 8,863 $ 6,607 Finished goods 3,122 2,410 Total Inventories $ 11,985 $ 9,017 Product Warranties The Company provides limited warranties for parts and labor at no cost to its customers within a specified time period after the sale. As of June 30, 2022 and December 31, 2021, the Company had accrued a liability for warranty reserve of $ 600 600 SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANTY LIABILITY Changes in estimates for warranties June 30, 2022 (unaudited) December 31, 2021 Balance at beginning of the period $ 600 $ 600 Payments (290 ) (658 ) Provision for warranties 290 658 Balance at end of the period $ 600 $ 600 Stock-Based Compensation The Company periodically issues stock-based compensation to officers, directors, and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to employees, directors, 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 Financial Assets and Liabilities Measured at Fair Value The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Financial assets recorded at fair value in the balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. Authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than the quoted prices in active markets, that is observable either directly or indirectly. Level 3 Unobservable inputs based on the Company’s assumptions. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments. The carrying values of the line of credit, notes payable approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. Segments The Company operates in one segment for the manufacture and distribution of its products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements. Concentrations Cash Cash denominated in Australian Dollars with a U.S. Dollar equivalent of $ 13 9 18 23 Revenues. 88 77 99 92 2 2 For the six months ended June 30, 2022, sales to the Company’s largest customer, a Tier-1 telecommunications wireless carrier in the U.S., accounted for 89 70 99 92 1 12 Accounts receivable 94 At December 31, 2021, the Company’s two largest receivable accounts represented 74 15 Accounts payable 16 8 8 On December 31, 2021, the three largest accounts payable accounts to the Company’s vendors represented 16 9 9 Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive. The dilutive effect of potentially dilutive securities is reflected in diluted net income per share if the exercise prices were lower than the average fair market value of common shares during the reporting period. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive: SCHEDULE OF DILUTED EARNINGS PER SHARE June 30, 2022 (Unaudited) June 30, 2021 Options 140,000 140,000 Warrants 24,122 24,122 Total 164,122 164,122 Recent Accounting Pronouncements In September 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Effective January 1, 2021, the Company early adopted ASU 2020-06 and that adoption did not have an impact on its financial statements and the related disclosures. In May 2021, the FASB issued ASU 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU 2021-04 did not have any impact on the Company’s financial statement presentation or disclosures. The Company’s management does not believe that there are other recently issued but not yet effective authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 2 – PROPERTY AND EQUIPMENT Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, 2022 (Unaudited) December 31, 2021 Production tooling, jigs, fixtures $ 71 $ 71 Shop equipment and machinery 3,364 3,350 Vehicles 181 180 Leasehold improvements 390 390 Office equipment 181 181 Software 106 106 Total property and equipment, cost 4,293 4,278 Less: accumulated depreciation and amortization (3,523 ) (3,259 ) Property and equipment, net $ 770 $ 1,019 Depreciation and amortization expense on property and equipment for the three months ended June 30, 2022 and 2021 was $ 129 157 125 129 Depreciation and amortization expense on property and equipment for the six months ended June 30, 2022 and 2021 was $ 264 287 255 273 |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 3 – NOTES PAYABLE Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE June 30, 2022 December 31, (Unaudited) 2021 Total Notes Payable for purchase of Equipment $ 391 $ 510 Less Current Portion 248 242 Notes Payable, long term $ 143 $ 268 The Company has entered into several financing agreements for the purchase of equipment in prior years. The terms of these financing arrangements are from 2 years 5 years 1.9 6.9 22 |
LINE OF CREDIT
LINE OF CREDIT | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 4 – LINE OF CREDIT Credit Facility Effective September 30, 2020, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Pinnacle Bank (“Pinnacle”). During 2022, the Company did not draw any advances from the revolving credit facility. At June 30, 2022, there was no 2,806 The loan agreement provides for a revolving credit facility under which Pinnacle may make advances to the Company, subject to certain limitations and adjustments, of up to (a) 85% of the aggregate net face amount of the Company’s accounts receivable and other contract rights and receivables, plus (b) the lesser of (i) 35% of the lower of cost or wholesale market value of certain inventory of the Company or (ii) $2,500. 4,000 Interest accrues on the daily balance at a rate of 1.25 3.75 2.25 4.75 The loan agreement’s initial term ends on September 30, 2022 The loan agreement obligates the Company to pay Pinnacle a yearly facility fee in an amount equal to 1.125 |
STOCK OPTIONS
STOCK OPTIONS | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 5 – STOCK OPTIONS The following table summarizes stock options: SCHEDULE OF STOCK OPTION ACTIVITY Number of Weighted Average Options Exercise Price Outstanding, December 31, 2021 140,000 $ 5.22 Granted — — Exercised/Forfeited/Expired — — Outstanding, June 30, 2022 (unaudited) 140,000 $ 5.22 Exercisable, June 30, 2022 (unaudited) 140,000 $ 5.22 Effective July 8, 2016 the Company’s board of directors approved the Polar Power 2016 Omnibus Incentive Plan (the “2016 Plan”), authorizing the issuance of up to 1,754,385 350,877 At June 30, 2022 and December 31, 2021, the Company had total outstanding options exercisable into 140,000 4.84 5.60 30,000 110,000 The outstanding options had no intrinsic value at June 30, 2022. |
STOCK WARRANTS
STOCK WARRANTS | 6 Months Ended |
Jun. 30, 2022 | |
Stock Warrants | |
STOCK WARRANTS | NOTE 6 – STOCK WARRANTS The following table summarizes warrants: SCHEDULE OF WARRANTS OUTSTANDING Number of Weighted Average Outstanding December 31, 2021 24,122 $ 3.13 Issued — — Exercised/Forfeited/Expired — — Outstanding, June 30, 2022 (unaudited) 24,122 $ 3.13 Exercisable, June 30, 2022 (unaudited) 24,122 $ 3.13 At June 30, 2022 and December 31, 2021, the Company had outstanding warrants exercisable into 24,122 3.13 expire in July 2025 The outstanding and exercisable warrants had no |
DISTRIBUTION AGREEMENT WITH A R
DISTRIBUTION AGREEMENT WITH A RELATED ENTITY | 6 Months Ended |
Jun. 30, 2022 | |
Distribution Agreement With Related Entity | |
DISTRIBUTION AGREEMENT WITH A RELATED ENTITY | NOTE 7 – DISTRIBUTION AGREEMENT WITH A RELATED ENTITY On March 1, 2014, the Company entered into a subcontractor installer agreement with Smartgen Solutions, Inc. (“Smartgen”), a related entity. During the three months ended June 30, 2022 and 2021, Smartgen performed nil 22 nil 51 |
OPERATING LEASES
OPERATING LEASES | 6 Months Ended |
Jun. 30, 2022 | |
Operating Leases | |
OPERATING LEASES | NOTE 8 – OPERATING LEASES The Company has two operating lease agreements for its warehouse and office spaces both with a weighted average remaining lease terms at June 30, 2022 of approximately one year The components of rent expense and supplemental cash flow information related to leases for the period are as follows: SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION Six Months June 30, 2022 Six Months June 30, 2021 Lease Cost Operating lease cost (of which $ 49 301 $ 350 $ 350 Other Information Weighted average remaining lease term – operating leases (in years) 0.9 1.9 Average discount rate – operating leases 3.75 % 3.75 % The supplemental balance sheet information related to leases for the period is as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION At At Operating leases Long-term right-of-use assets, net of accumulated amortization of $ 2,237 1,586 $ 580 $ 1,242 Short-term operating lease liabilities $ 588 $ 695 Long-term operating lease liabilities 47 635 Total operating lease liabilities $ 635 $ 1,330 Maturities of the Company’s lease liabilities are as follows (in thousands): SCHEDULE OF MATURITIES OF LEASE LIABILITIES Year Ending Operating Leases 2022 (remaining 6 months) 376 2023 280 Total lease payments 656 Less: Imputed interest/present value discount (21 ) Present value of lease liabilities $ 635 Rent expense for the six months ended June 30, 2022 and 2021 was $ 476 452 |
EMPLOYEE RETENTION CREDITS
EMPLOYEE RETENTION CREDITS | 6 Months Ended |
Jun. 30, 2022 | |
Employee Retention Credits | |
EMPLOYEE RETENTION CREDITS | NOTE 9 - EMPLOYEE RETENTION CREDITS The Consolidated Appropriations Act, passed in December 2020, expanded the employee retention credit (“ERC”) program through December 2021. The credits cover 70 7 2,000 2,000 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company Polar Power, Inc. was incorporated in the State of Washington as Polar Products, Inc. and in 1991 reincorporated in the State of California under the name Polar Power, Inc. In December 2016, Polar Power, Inc. reincorporated in the State of Delaware (the “Company”). The Company designs, manufactures and sells direct current, or DC, power systems to supply reliable and low-cost energy to off-grid, bad-grid and backup power, electric vehicle (EV) charging, and nano-grid applications. The Company’s products integrate DC generator, proprietary electronic control systems, lithium batteries and solar photovoltaic (PV) technologies to provide low operating cost and emissions for telecommunications, defense, automotive, nano-grid, EV charging and industrial markets. |
Liquidity | Liquidity The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the six months ended June 30, 2022, the Company recorded a net loss of $1,859 2,311 2,656 2,806 21,391 20,138 Historically, we have financed our operations through public and private sales of common stock, credit lines from financial institutions, and cash generated from operations to provide the Company the liquidity and capital resources to fund its operating expenses and capital expenditure requirements. The Company expects to continue investing in product development and sales and marketing activities and has taken action to improve our margins, and are continuing to build a strong back log. The long-term continuation of the Company’s business plan is dependent upon the generation of sufficient revenues from its products to offset expenses. 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. |
Impact of COVID-19 | Impact of COVID-19 The Company continues to monitor the evolving COVID-19 pandemic and related guidance from international and domestic authorities, including federal, state and local public health authorities and it may need to make changes to its business based on their recommendations. COVID-19 has had, and is likely to continue to have, a material and substantial adverse impact on the Company’s results of operations including, among others, a decrease in the Company’s sales and delays in sourcing of raw materials from suppliers. The Company’s business is directly dependent upon, and correlates closely with, the marketing levels and ongoing business activities of its existing customers and suppliers. In the event of a continued widespread economic downturn caused by COVID-19, the Company could experience a further reduction in current projects, longer sales and collection cycles, deferral or delay of purchase commitments for its DC power systems, a reduction in its manufacturing functionality, higher than normal inventory levels, a reduction in the availability of qualified labor, and increased price competition, all of which could substantially adversely affect its net revenues and its ability to remain a going concern. The extent of the impact of COVID-19 on its operational and financial performance will depend on certain developments, including the duration and potential resurgence of the outbreak, the impact on its customers and sales cycles, the impact on its customer, employee or industry events, the impact on inflation and the effect on the supply chain, all of which are uncertain and cannot be predicted. At this point, the Company is uncertain of the full magnitude that the COVID-19 pandemic may have on our financial condition, liquidity and future results of operations. |
Basis of Presentation of Unaudited Financial Information | Basis of Presentation of Unaudited Financial Information The unaudited condensed financial statements of the Company for the three and six months ended June 30, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K for scaled disclosures for smaller reporting companies. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2021 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended December 31, 2021 and 2020 contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 31, 2022. These financial statements should be read in conjunction with that report. |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Material estimates relate to the assumptions made in determining reserves for uncollectible receivables, inventory reserves and returns, impairment analysis of long-term assets, valuation allowance on deferred tax assets, income tax accruals, accruals for potential liabilities and warranty reserves and assumptions made in valuing equity instruments issued for services. Actual results may differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). Substantially all of the Company’s revenue is derived from product sales. The Company also generates revenues from engineering, tech support, and rental services. Product or service revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to its customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the products or services to a customer. The Company regularly reviews its customers’ financial positions to ensure that collectability is reasonably assured. The Company also recognizes revenues from the rental of equipment. The Company’s rental revenues have not been significant to date and have accounted for less than one percent of total revenues for the three and six-month periods ended June 30, 2022 and 2021. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: SCHEDULE OF DISAGGREGATED NET SALES Three months ended 2022 (Unaudited) 2021 (Unaudited) DC power systems $ 4,199 $ 4,635 Engineering & Tech Support Services 32 142 Accessories 43 70 Total net sales $ 4,274 $ 4,847 Six months ended 2022 (Unaudited) 2021 (Unaudited) DC power systems $ 7,816 $ 7,860 Engineering & Tech Support Services 76 170 Accessories 91 107 Total net sales $ 7,983 $ 8,137 The following table shows the Company’s disaggregated net sales by customer type: Three months ended 2022 (Unaudited) 2021 (Unaudited) Telecom $ 4,228 $ 4,440 Government/Military 12 134 Marine 3 14 Other (backup DC power to various industries ) 31 259 Total net sales $ 4,274 $ 4,847 Six months ended 2022 (Unaudited) 2021 (Unaudited) Telecommunications $ 7,898 $ 7,492 Government/Military 29 165 Marine 17 14 Other (backup DC power to various industries ) 39 466 Total net sales $ 7,983 $ 8,137 |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. As of June 30, 2022 and December 31, 2021, inventory has been reduced by cumulative write-downs totaling $ 3,300 3,500 SCHEDULE OF INVENTORIES NET June 30, 2022 (unaudited) December 31, 2021 Raw materials $ 8,863 $ 6,607 Finished goods 3,122 2,410 Total Inventories $ 11,985 $ 9,017 |
Product Warranties | Product Warranties The Company provides limited warranties for parts and labor at no cost to its customers within a specified time period after the sale. As of June 30, 2022 and December 31, 2021, the Company had accrued a liability for warranty reserve of $ 600 600 SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANTY LIABILITY Changes in estimates for warranties June 30, 2022 (unaudited) December 31, 2021 Balance at beginning of the period $ 600 $ 600 Payments (290 ) (658 ) Provision for warranties 290 658 Balance at end of the period $ 600 $ 600 |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock-based compensation to officers, directors, and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to employees, directors, 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 |
Financial Assets and Liabilities Measured at Fair Value | Financial Assets and Liabilities Measured at Fair Value The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Financial assets recorded at fair value in the balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. Authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs, other than the quoted prices in active markets, that is observable either directly or indirectly. Level 3 Unobservable inputs based on the Company’s assumptions. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values because of the short maturity of these instruments. The carrying values of the line of credit, notes payable approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. |
Segments | Segments The Company operates in one segment for the manufacture and distribution of its products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements. |
Concentrations | Concentrations Cash Cash denominated in Australian Dollars with a U.S. Dollar equivalent of $ 13 9 18 23 Revenues. 88 77 99 92 2 2 For the six months ended June 30, 2022, sales to the Company’s largest customer, a Tier-1 telecommunications wireless carrier in the U.S., accounted for 89 70 99 92 1 12 Accounts receivable 94 At December 31, 2021, the Company’s two largest receivable accounts represented 74 15 Accounts payable 16 8 8 On December 31, 2021, the three largest accounts payable accounts to the Company’s vendors represented 16 9 9 |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive. The dilutive effect of potentially dilutive securities is reflected in diluted net income per share if the exercise prices were lower than the average fair market value of common shares during the reporting period. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive: SCHEDULE OF DILUTED EARNINGS PER SHARE June 30, 2022 (Unaudited) June 30, 2021 Options 140,000 140,000 Warrants 24,122 24,122 Total 164,122 164,122 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In September 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Effective January 1, 2021, the Company early adopted ASU 2020-06 and that adoption did not have an impact on its financial statements and the related disclosures. In May 2021, the FASB issued ASU 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU 2021-04 did not have any impact on the Company’s financial statement presentation or disclosures. The Company’s management does not believe that there are other recently issued but not yet effective authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF DISAGGREGATED NET SALES | The following table shows the Company’s disaggregated net sales by product type: SCHEDULE OF DISAGGREGATED NET SALES Three months ended 2022 (Unaudited) 2021 (Unaudited) DC power systems $ 4,199 $ 4,635 Engineering & Tech Support Services 32 142 Accessories 43 70 Total net sales $ 4,274 $ 4,847 Six months ended 2022 (Unaudited) 2021 (Unaudited) DC power systems $ 7,816 $ 7,860 Engineering & Tech Support Services 76 170 Accessories 91 107 Total net sales $ 7,983 $ 8,137 The following table shows the Company’s disaggregated net sales by customer type: Three months ended 2022 (Unaudited) 2021 (Unaudited) Telecom $ 4,228 $ 4,440 Government/Military 12 134 Marine 3 14 Other (backup DC power to various industries ) 31 259 Total net sales $ 4,274 $ 4,847 Six months ended 2022 (Unaudited) 2021 (Unaudited) Telecommunications $ 7,898 $ 7,492 Government/Military 29 165 Marine 17 14 Other (backup DC power to various industries ) 39 466 Total net sales $ 7,983 $ 8,137 |
SCHEDULE OF INVENTORIES NET | SCHEDULE OF INVENTORIES NET June 30, 2022 (unaudited) December 31, 2021 Raw materials $ 8,863 $ 6,607 Finished goods 3,122 2,410 Total Inventories $ 11,985 $ 9,017 |
SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANTY LIABILITY | SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANTY LIABILITY Changes in estimates for warranties June 30, 2022 (unaudited) December 31, 2021 Balance at beginning of the period $ 600 $ 600 Payments (290 ) (658 ) Provision for warranties 290 658 Balance at end of the period $ 600 $ 600 |
SCHEDULE OF DILUTED EARNINGS PER SHARE | The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive: SCHEDULE OF DILUTED EARNINGS PER SHARE June 30, 2022 (Unaudited) June 30, 2021 Options 140,000 140,000 Warrants 24,122 24,122 Total 164,122 164,122 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, 2022 (Unaudited) December 31, 2021 Production tooling, jigs, fixtures $ 71 $ 71 Shop equipment and machinery 3,364 3,350 Vehicles 181 180 Leasehold improvements 390 390 Office equipment 181 181 Software 106 106 Total property and equipment, cost 4,293 4,278 Less: accumulated depreciation and amortization (3,523 ) (3,259 ) Property and equipment, net $ 770 $ 1,019 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF NOTES PAYABLE | Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE June 30, 2022 December 31, (Unaudited) 2021 Total Notes Payable for purchase of Equipment $ 391 $ 510 Less Current Portion 248 242 Notes Payable, long term $ 143 $ 268 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table summarizes stock options: SCHEDULE OF STOCK OPTION ACTIVITY Number of Weighted Average Options Exercise Price Outstanding, December 31, 2021 140,000 $ 5.22 Granted — — Exercised/Forfeited/Expired — — Outstanding, June 30, 2022 (unaudited) 140,000 $ 5.22 Exercisable, June 30, 2022 (unaudited) 140,000 $ 5.22 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stock Warrants | |
SCHEDULE OF WARRANTS OUTSTANDING | The following table summarizes warrants: SCHEDULE OF WARRANTS OUTSTANDING Number of Weighted Average Outstanding December 31, 2021 24,122 $ 3.13 Issued — — Exercised/Forfeited/Expired — — Outstanding, June 30, 2022 (unaudited) 24,122 $ 3.13 Exercisable, June 30, 2022 (unaudited) 24,122 $ 3.13 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Operating Leases | |
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION | The components of rent expense and supplemental cash flow information related to leases for the period are as follows: SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION Six Months June 30, 2022 Six Months June 30, 2021 Lease Cost Operating lease cost (of which $ 49 301 $ 350 $ 350 Other Information Weighted average remaining lease term – operating leases (in years) 0.9 1.9 Average discount rate – operating leases 3.75 % 3.75 % |
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION | The supplemental balance sheet information related to leases for the period is as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION At At Operating leases Long-term right-of-use assets, net of accumulated amortization of $ 2,237 1,586 $ 580 $ 1,242 Short-term operating lease liabilities $ 588 $ 695 Long-term operating lease liabilities 47 635 Total operating lease liabilities $ 635 $ 1,330 |
SCHEDULE OF MATURITIES OF LEASE LIABILITIES | Maturities of the Company’s lease liabilities are as follows (in thousands): SCHEDULE OF MATURITIES OF LEASE LIABILITIES Year Ending Operating Leases 2022 (remaining 6 months) 376 2023 280 Total lease payments 656 Less: Imputed interest/present value discount (21 ) Present value of lease liabilities $ 635 |
SCHEDULE OF DISAGGREGATED NET S
SCHEDULE OF DISAGGREGATED NET SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | $ 4,274 | $ 4,847 | $ 7,983 | $ 8,137 |
Telecommunications [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 4,228 | 4,440 | 7,898 | 7,492 |
Government And Military [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 12 | 134 | 29 | 165 |
Marine [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 3 | 14 | 17 | 14 |
Other [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 31 | 259 | 39 | 466 |
D C Power Systems [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 4,199 | 4,635 | 7,816 | 7,860 |
Engineering And Tech Support Services [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 32 | 142 | 76 | 170 |
Accessories [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | $ 43 | $ 70 | $ 91 | $ 107 |
SCHEDULE OF INVENTORIES NET (De
SCHEDULE OF INVENTORIES NET (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 8,863 | $ 6,607 |
Finished goods | 3,122 | 2,410 |
Total Inventories | $ 11,985 | $ 9,017 |
SCHEDULE OF RECONCILIATION OF T
SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANTY LIABILITY (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Balance at beginning of the period | $ 600 | $ 600 |
Payments | (290) | (658) |
Provision for warranties | 290 | 658 |
Balance at end of the period | $ 600 | $ 600 |
SCHEDULE OF DILUTED EARNINGS PE
SCHEDULE OF DILUTED EARNINGS PER SHARE (Details) - shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 164,122 | 164,122 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 140,000 | 140,000 |
Antidilutive Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 24,122 | 24,122 |
ORGANIZATION AND SUMMARY OF S_4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | ||||||||
Net loss | $ 739 | $ 866 | $ 1,859 | $ 2,769 | ||||
Net cash used in operating activities | 2,311 | 6,131 | ||||||
Cash and cash equivalents | 2,656 | 2,656 | $ 5,101 | |||||
Line of credit | 2,806 | 2,806 | ||||||
Stockholders equity | 21,391 | $ 21,895 | 21,391 | $ 21,895 | 23,250 | $ 22,130 | $ 22,761 | $ 11,491 |
Working capital | 20,138 | 20,138 | ||||||
Cumulative inventory write-downs | 3,300 | 3,500 | ||||||
Standard Product Warranty Accrual | $ 600 | $ 600 | $ 600 | $ 600 | ||||
Sales to Telecommunications Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 99% | 92% | 99% | 92% | ||||
Largest Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 94% | 74% | ||||||
Largest Customer One [Member] | Sales to Telecommunications Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 88% | 77% | 89% | 70% | ||||
Largest Customer Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 15% | |||||||
Largest Customer Two [Member] | Accounts Payable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 8% | 9% | ||||||
Largest Vendors One [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 16% | 16% | ||||||
Largest Customer Three [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 8% | 9% | ||||||
AUSTRALIA | ||||||||
Product Information [Line Items] | ||||||||
Cash | $ 13 | $ 13 | $ 9 | |||||
RON [Member] | ||||||||
Product Information [Line Items] | ||||||||
Cash | $ 18 | $ 18 | $ 23 | |||||
Non-US [Member] | Sales to Telecommunications Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 2% | 2% | 1% | 12% |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 4,293 | $ 4,278 |
Less: accumulated depreciation and amortization | (3,523) | (3,259) |
Property and equipment, net | 770 | 1,019 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 71 | 71 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 3,364 | 3,350 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 181 | 180 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 390 | 390 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 181 | 181 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 106 | $ 106 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 129 | $ 157 | $ 264 | $ 287 |
Depreciation expenses | $ 125 | $ 129 | $ 255 | $ 273 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Total Notes Payable for purchase of Equipment | $ 391 | $ 510 |
Less Current Portion | 248 | 242 |
Notes Payable, long term | $ 143 | $ 268 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - Equipment [Member] - Several Financing Agreements [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Monthly payments | $ 22 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt term | 2 years |
Interest rate | 1.90% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt term | 5 years |
Interest rate | 6.90% |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - Pinnacle Bank [Member] - Loan and Security Agreement [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Proceeds from advanced on revolving credit facility | $ 0 |
Line of credit remaining borrowing capacity | $ 2,806 |
Line of credit facility, description | The loan agreement provides for a revolving credit facility under which Pinnacle may make advances to the Company, subject to certain limitations and adjustments, of up to (a) 85% of the aggregate net face amount of the Company’s accounts receivable and other contract rights and receivables, plus (b) the lesser of (i) 35% of the lower of cost or wholesale market value of certain inventory of the Company or (ii) $2,500. |
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000 |
Line of credit facility, interest rate description | Interest accrues on the daily balance at a rate of 1.25% above the prime rate, but in no event less than 3.75% per annum |
Line of credit facility, expiration date | Sep. 30, 2022 |
Line of credit facility, fee percentage | 1.125% |
Standard Interest Rate [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, interest rate during period | 1.25% |
Standard Interest Rate [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, interest rate during period | 3.75% |
Inventory Interest Rate [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, interest rate during period | 2.25% |
Inventory Interest Rate [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, interest rate during period | 4.75% |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of options, outstanding, beginning balance | shares | 140,000 |
Weighted average exercise price, outstanding, beginning balance | $ / shares | $ 5.22 |
Number of options, granted | shares | |
Weighted average exercise price, granted | $ / shares | |
Number of options, exercised , forfeited, expired | shares | |
Weighted average exercise price, exercised , forfeited, expired | $ / shares | |
Number of options, outstanding, ending balance | shares | 140,000 |
Weighted average exercise price, outstanding, ending balance | $ / shares | $ 5.22 |
Number of options, exercisable, ending balance | shares | 140,000 |
Weighted average exercise price, exercisable, ending balance | $ / shares | $ 5.22 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | Jul. 08, 2016 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Total outstanding options fully vested | 140,000 | 140,000 | |
December 2027 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Option share to be expire | 30,000 | 30,000 | |
April 2028 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Option share to be expire | 110,000 | 110,000 | |
Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options exercise price | $ 4.84 | $ 4.84 | |
Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options exercise price | $ 5.60 | $ 5.60 | |
Polar Power 2016 Omnibus Incentive Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of shares authorized | 1,754,385 | ||
Maximum number of shares available for issuance | 350,877 |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Stock Warrants | |
Number of warrants, outstanding, beginning balance | shares | 24,122,000 |
Weighted average exercise price, outstanding, beginning balance | $ / shares | $ 3.13 |
Number of warrants, issued | shares | |
Weighted average exercise price, issued | $ / shares | |
Number of warrants, exercised | shares | |
Weighted average exercise price, exercised | $ / shares | |
Number of warrants, outstanding, ending balance | shares | 24,122 |
Weighted average exercise price, outstanding, ending balance | $ / shares | $ 3.13 |
Number of warrants, exercisable, ending balance | shares | 24,122 |
Weighted average exercise price, exercisable, ending balance | $ / shares | $ 3.13 |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Stock Warrants | ||
Number of outstanding warrants exercisable | 24,122 | 24,122 |
Warrants exercise price | $ 3.13 | $ 3.13 |
Description of warrant expiration date | expire in July 2025 | expire in July 2025 |
Warrants intrinsic value | $ 0 |
DISTRIBUTION AGREEMENT WITH A_2
DISTRIBUTION AGREEMENT WITH A RELATED ENTITY (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Smartgen Solutions, Inc. [Member] | ||||
Amount of performed filed services | $ 22 | $ 51 |
SCHEDULE OF RENT EXPENSE AND SU
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating lease cost | $ 350 | $ 350 |
General and Administrative Expense [Member] | ||
Operating lease cost | 49 | 49 |
Cost of Sales [Member] | ||
Operating lease cost | $ 301 | $ 301 |
SCHEDULE OF RENT EXPENSE AND _2
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Leases | ||
Operating lease cost | $ 350 | $ 350 |
Weighted average remaining lease term - operating leases (in years) | 10 months 24 days | 1 year 10 months 24 days |
Average discount rate - operating leases | 3.75% | 3.75% |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Operating Leases | |||
Long-term right-of-use assets, net of accumulated amortization of $2,237 and $1,586, respectively | $ 580 | $ 914 | $ 1,242 |
Short-term operating lease liabilities | 588 | 695 | |
Long-term operating lease liabilities | 47 | 635 | |
Total operating lease liabilities | $ 635 | $ 1,330 |
SCHEDULE OF SUPPLEMENTAL BALA_2
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Operating Leases | ||
Accumulated amortization of right-of-use assets | $ 2,237 | $ 1,586 |
SCHEDULE OF MATURITIES OF LEASE
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Operating Leases | ||
2022 (remaining 6 months) | $ 376 | |
2023 | 280 | |
Total lease payments | 656 | |
Less: Imputed interest/present value discount | (21) | |
Present value of lease liabilities | $ 635 | $ 1,330 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Rent expense | $ 476 | $ 452 |
Warehouse Operating Lease Agreements [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Lease term | 1 year |
EMPLOYEE RETENTION CREDITS (Det
EMPLOYEE RETENTION CREDITS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Employee Retention Credits | ||
Employee retention credit wages percentage | 70% | |
Employee retention credit per shares | $ 7 | |
Expenses of employee retention credit | $ 2,000 | |
Employee retention credit receivable | $ 2,000 | $ 2,000 |