Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
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 $0.0001 per share | |
Trading Symbol | POLA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,961,612 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 296 | $ 211 |
Accounts receivable | 1,582 | 2,230 |
Inventories, net | 19,155 | 15,460 |
Prepaid expenses | 942 | 2,629 |
Employee retention credit receivable | 2,000 | 2,000 |
Income taxes receivable | 787 | 787 |
Total current assets | 24,762 | 23,317 |
Other assets: | ||
Operating lease right-of-use assets, net | 3,103 | 240 |
Property and equipment, net | 423 | 538 |
Deposits | 108 | 93 |
Total assets | 28,396 | 24,188 |
Current liabilities | ||
Accounts payable | 1,988 | 230 |
Customer deposits | 1,720 | 2,126 |
Accrued liabilities and other current liabilities | 1,178 | 1,231 |
Operating lease liabilities, current portion | 1,045 | 268 |
Line of credit | 5,194 | 1,884 |
Total current liabilities | 11,446 | 5,950 |
Notes payable, net of current portion | 57 | |
Operating lease liabilities, net of current portion | 2,162 | |
Total liabilities | 13,608 | 6,007 |
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, 12,967,027 shares issued and 12,949,550 shares outstanding on September 30, 2023, and 12,967,027 shares issued and 12,949,550 shares outstanding on December 31, 2022 | 1 | 1 |
Additional paid-in capital | 37,331 | 37,331 |
Accumulated deficit | (22,504) | (19,111) |
Treasury Stock, at cost (17,477 shares) | (40) | (40) |
Total stockholders’ equity | 14,788 | 18,181 |
Total liabilities and stockholders’ equity | 28,396 | 24,188 |
Related Party [Member] | ||
Current liabilities | ||
Notes payable, current portion | 233 | |
Nonrelated Party [Member] | ||
Current liabilities | ||
Notes payable, current portion | $ 88 | $ 211 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
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 | 12,967,027 | 12,967,027 |
Common stock, shares outstanding | 12,949,550 | 12,949,550 |
Treasury stock, shares | 17,477 | 17,477 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net Sales | $ 1,911 | $ 1,707 | $ 11,688 | $ 9,690 |
Cost of Sales | 2,019 | 1,954 | 9,566 | 7,971 |
Gross profit (loss) | (108) | (247) | 2,122 | 1,719 |
Operating Expenses | ||||
Sales and marketing | 274 | 328 | 917 | 1,134 |
Research and development | 299 | 319 | 983 | 1,145 |
General and administrative | 992 | 1,482 | 3,240 | 3,648 |
Total operating expenses | 1,565 | 2,129 | 5,140 | 5,927 |
Loss from operations | (1,673) | (2,376) | (3,018) | (4,208) |
Other income (expenses) | ||||
Interest expense and finance costs | (171) | (12) | (375) | (39) |
Other income (expense), net | 7 | 7 | ||
Total other income (expenses), net | (171) | (5) | (375) | (32) |
Net loss | $ (1,844) | $ (2,381) | $ (3,393) | $ (4,240) |
Net loss per share, basic | $ (0.14) | $ (0.19) | $ (0.26) | $ (0.33) |
Net loss per share, diluted | $ (0.14) | $ (0.19) | $ (0.26) | $ (0.33) |
Weighted average shares outstanding, basic | 12,949,550 | 12,848,466 | 12,949,550 | 12,967,027 |
Weighted average shares outstanding, diluted | 12,949,550 | 12,848,466 | 12,949,550 | 12,967,027 |
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, Common [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 1 | $ 36,816 | $ (13,527) | $ (40) | $ 23,250 |
Balance, shares at Dec. 31, 2021 | 12,805,680 | ||||
Net loss | (4,240) | (4,240) | |||
Stock-based compensation | 515 | 515 | |||
Ending balance, value at Sep. 30, 2022 | $ 1 | 37,331 | (17,767) | (40) | 19,525 |
Balance, shares at Sep. 30, 2022 | 12,967,027 | ||||
Beginning balance, value at Jun. 30, 2022 | $ 1 | 36,816 | (15,386) | (40) | 21,391 |
Balance, shares at Jun. 30, 2022 | 12,805,680 | ||||
Net loss | (2,381) | (2,381) | |||
Stock-based compensation | 515 | 515 | |||
Stock-based compensation, shares | 161,347 | ||||
Ending balance, value at Sep. 30, 2022 | $ 1 | 37,331 | (17,767) | (40) | 19,525 |
Balance, shares at Sep. 30, 2022 | 12,967,027 | ||||
Beginning balance, value at Dec. 31, 2022 | $ 1 | 37,331 | (19,111) | (40) | 18,181 |
Balance, shares at Dec. 31, 2022 | 12,967,027 | ||||
Net loss | (3,393) | (3,393) | |||
Ending balance, value at Sep. 30, 2023 | $ 1 | 37,331 | (22,504) | (40) | 14,788 |
Balance, shares at Sep. 30, 2023 | 12,967,027 | ||||
Beginning balance, value at Jun. 30, 2023 | $ 1 | 37,331 | (20,660) | (40) | 16,632 |
Balance, shares at Jun. 30, 2023 | 12,967,027 | ||||
Net loss | (1,844) | (1,844) | |||
Ending balance, value at Sep. 30, 2023 | $ 1 | $ 37,331 | $ (22,504) | $ (40) | $ 14,788 |
Balance, shares at Sep. 30, 2023 | 12,967,027 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (3,393) | $ (4,240) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 309 | 387 |
Stock-based compensation to officers, employees and consultants | 515 | |
Changes in operating assets and liabilities | ||
Accounts receivable | 648 | 3,027 |
Inventories | (3,695) | (6,608) |
Prepaid expenses | 1,687 | (322) |
Deposits | (15) | |
Operating lease right-of-use asset | (2,863) | 503 |
Accounts payable | 1,758 | 97 |
Customer deposits | (406) | 2,672 |
Accrued expenses and other current liabilities | (53) | (27) |
Operating lease liability | 2,939 | (536) |
Net cash used in operating activities | (3,084) | (4,532) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (194) | (25) |
Net cash used in investing activities | (194) | (25) |
Cash flows from financing activities: | ||
Proceeds from advances from credit facility | 3,310 | |
Proceeds from notes payable, related party | 233 | |
Repayment of notes payable | (180) | (181) |
Net cash provided by (used in) financing activities | 3,363 | (181) |
Increase (decrease) in cash and cash equivalents | 85 | (4,738) |
Cash and cash equivalents, beginning of period | 211 | 5,101 |
Cash and cash equivalents, end of period | $ 296 | $ 363 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
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”, “we” or “us”). 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. For the nine months ended September 30, 2023, the Company recorded a net loss of $ 3,393 3,084 Notwithstanding the net loss for the nine-month period ended September 30, 2023, management concluded that the Company will have adequate cash flow from operations and available line of credit in 2023 and 2024 so that it is probable that the Company will be able to fund its current operating plan and satisfy its liquidity requirements within one year from the date the Company’s September 30, 2023 financial statements are issued. As of September 30, 2023, the Company had a cash balance of $ 296 119 14,788 13,316 Impact of COVID-19 and Inflation COVID-19. Inflation. Basis of Presentation of Unaudited Financial Information The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2023 and 2022 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, 2022 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended December 31, 2022 and 2021 contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 31, 2023. These financial statements should be read in conjunction with that report. In accordance with the “Segment Reporting” Topic of the Accounting Standards Codification, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) determined that the Company has only one reporting unit. 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 net realizable value, impairment analysis of long-term assets, valuation allowance on deferred tax assets, accruals for potential liabilities, accruals for warranty reserves, assumptions made in valuing equity instruments issued for services, and assumptions used in the determination of the Company’s liquidity. 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. Product 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 determines whether delivery has occurred based on when title transfers and the risks and rewards of ownership have transferred to the customer, which usually occurs when the Company places the product with the customer’s carrier or delivers the product to a customer’s location. The Company regularly reviews its customers’ financial positions to ensure that collectability is reasonably assured. The Company also recognizes revenues from engineering services, technical support, and sale of accessories that support the Company’s direct current, or DC, power systems, and from the rental of equipment. Revenue is recognized when transfer of control to the customer has been made and the Company’s performance obligation has been fulfilled. The Company’s revenue from engineering services, technical support services, and product accessories are clearly defined in each transaction with its customers and have not been significant to date. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: SCHEDULE OF DISAGGREGATED NET SALES 2023 2022 Three months ended 2023 2022 (Unaudited) (Unaudited) DC power systems $ 1,611 $ 1,659 Engineering & Tech Support Services 200 28 Accessories 100 20 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended 2023 2022 (Unaudited) (Unaudited) DC power systems $ 11,131 $ 9,474 Engineering & Tech Support Services 254 105 Accessories 303 111 Total net sales $ 11,688 $ 9,690 The following table shows the Company’s disaggregated net sales by customer type: 2023 2022 Three months ended 2023 2022 (Unaudited) (Unaudited) Telecom $ 1,827 $ 1,538 Government/Military 2 2 Marine 60 140 Other (backup DC power to various industries ) 22 27 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended 2023 2022 (Unaudited) (Unaudited) Telecommunications $ 11,222 $ 9,435 Government/Military 330 31 Marine 88 157 Other (backup DC power to various industries ) 48 67 Total net sales $ 11,688 $ 9,690 The following tables shows the Company’s net sales by the respective geographical regions of our customers: 2023 2022 Three months ended September 30, 2023 2022 (Unaudited) (Unaudited) United States $ 1,883 $ 1,590 Canada 16 35 South Pacific Islands 8 — Other Asia Pacific 4 — Europe and Middle East — 82 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended September 30, 2023 2022 (Unaudited) (Unaudited) United States $ 8,894 $ 9,460 Canada 178 49 South Pacific Islands 2,582 49 Japan — 10 Other Asia Pacific 8 24 Europe and Middle East — 98 Africa 26 — Total net sales $ 11,688 $ 9,690 For the three-months ended September 30, 2023 and 2022, international sales totaled $ 28 117 2,794 230 Inventories As of September 30, 2023 and December 31, 2022, inventories consisted of the following: SCHEDULE OF INVENTORIES NET September 30, December 31, (unaudited) 2022 Raw materials $ 15,580 $ 12,277 Finished goods 3,575 3,183 Total Inventories $ 19,155 $ 15,460 Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. For the nine-months ended September 30, 2023 and 2022, there were no write-downs of inventory. 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 September 30, 2023 and December 31, 2022, the Company had accrued a liability for warranty reserve of $ 600 600 SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY Changes in estimates for warranties September 30, December 31, 2022 Balance at beginning of the period $ 600 $ 600 Payments (384 ) (508 ) Provision for warranties 384 508 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 certain 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 and notes payable approximate their fair values since the interest rates on these obligations are based on prevailing market interest rates. Concentrations Cash Cash denominated in Australian Dollars with a U.S. Dollar equivalent of $ 14 8 1 23 Revenues. 65 87 96 90 1 7 For the nine months ended September 30, 2023, sales to the Company’s largest customer, a Tier-1 telecommunications wireless carrier in the U.S., accounted for 52 22 88 96 97 24 2 Accounts receivable 79 10 74 15 Accounts payable 34 13 6 51 3 3 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 September 30, 2023 September 30, 2022 (Unaudited) (Unaudited) 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. The standard is effective for the Company for interim and annual reporting periods beginning after December 15, 2022. Effective January 1, 2023, the Company adopted ASU 2016-13 and that adoption did not have a material impact on the Company’s financial position, results of operations, and cash flows. 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 | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, December 31, (Unaudited) 2022 Production tooling, jigs, fixtures $ 71 $ 71 Shop equipment and machinery 3,565 3,371 Vehicles 177 177 Leasehold improvements 390 390 Office equipment 185 185 Software 106 106 Total property and equipment, cost 4,494 4,300 Less: accumulated depreciation and amortization (4,071 ) (3,762 ) Property and equipment, net $ 423 $ 538 Depreciation and amortization expense on property and equipment for the three months ended September 30, 2023 and 2022 was $ 82 124 79 119 Depreciation and amortization expense on property and equipment for the nine months ended September 30, 2023 and 2022 was $ 309 387 298 374 |
NOTES PAYABLE, RELATED PARTY
NOTES PAYABLE, RELATED PARTY | 9 Months Ended |
Sep. 30, 2023 | |
Notes Payable Related Party | |
NOTES PAYABLE, RELATED PARTY | NOTE 3 – NOTES PAYABLE, RELATED PARTY In May 2023, the Company issued a note payable to its Chief Executive Officer for $ 160 April 25, 2024 1 73 1 July 17, 2024 |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 4 – NOTES PAYABLE Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE September 30, December 31, (Unaudited) 2022 Notes payable $ 88 $ 268 Less current portion (88 ) (211 ) Notes payable, long term $ — $ 57 In 2018 and 2019, the Company entered into five financing agreements for the purchase of equipment. The financing arrangements are for a term of 2 5 3.4 5.0 8 |
LINE OF CREDIT
LINE OF CREDIT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 5 – LINE OF CREDIT Credit Facility Effective September 30, 2020, the Company entered into a Loan and Security Agreement (as amended from time to time, the “Loan Agreement”) with Pinnacle Bank (“Pinnacle”). At September 30, 2023, the outstanding balance under the line of credit was $ 5,194 119 September 30, 2024 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. Borrowings based on receivables bears an interest on the daily balance at a rate of 1.25 3.75 4.75 On April 13, 2023, the Company entered into a Third Modification to the Loan Agreement under which the Company and Pinnacle agreed to add a new section which provides for Pinnacle to lend the Company up to $ 146 122 5,194 On May 25, 2023, the Company entered into a Fourth Modification to the Loan Agreement under which the parties (a) agreed to amend the amount of available advances under the Loan Agreement such that the aggregate amount of the outstanding advances under the revolving credit facility may not be greater than $ 6 On September 5, 2023, the Company entered into a Fifth Modification to the Loan Agreement under which the parties (a) extend the 90-day period on AT&T accounts receivable to 120 days; (b) increase the lesser of (i) 35% of the lower of cost or wholesale market value of certain inventory of the Company or (ii) $2.5 million to the lessor of (i) 40% of the aggregate eligible inventory value of eligible inventory or (ii) $4.0 million; (c) increase the aggregate advance limit under the credit facility from $ 6.0 7.5 Pinnacle may terminate the Loan Agreement at any time upon ninety days prior written notice and immediately upon the occurrence of an event of default. Under the Loan Agreement, the Company granted Pinnacle a security interest in all presently existing and thereafter acquired or arising assets of the Company. The Loan Agreement also contains a financial covenant requiring the Company to attain an effective tangible net worth, as defined, which the Company attained as of September 30, 2023. The Loan Agreement obligates the Company to pay Pinnacle a yearly facility fee in an amount equal to 1.125 |
STOCK OPTIONS
STOCK OPTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 6 – STOCK OPTIONS The following table summarizes stock options: SCHEDULE OF STOCK OPTION ACTIVITY Number of Weighted Average Options Exercise Price Outstanding, December 31, 2022 140,000 $ 5.22 Granted — — Exercised/Forfeited/Expired — — Outstanding, September 30, 2023 (unaudited) 140,000 $ 5.22 Exercisable, September 30, 2023 (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 September 30, 2023, and December 31, 2022, the Company had total outstanding options exercisable into 140,000 4.84 5.60 30,000 110,000 The outstanding options had no |
STOCK WARRANTS
STOCK WARRANTS | 9 Months Ended |
Sep. 30, 2023 | |
Stock Warrants | |
STOCK WARRANTS | NOTE 7 – STOCK WARRANTS At September 30, 2023, warrant shares outstanding were as follows: SCHEDULE OF WARRANTS OUTSTANDING Number of Weighted Average Outstanding December 31, 2022 24,122 $ 3.13 Issued — — Exercised/Forfeited/Expired — — Outstanding, September 30, 2023 (unaudited) 24,122 $ 3.13 Exercisable, September 30, 2023 (unaudited) 24,122 $ 3.13 At September 30, 2023, and December 31, 2022, the Company had outstanding warrants exercisable into 24,122 3.13 expire in July 2025 There was no |
OPERATING LEASES
OPERATING LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Operating Leases | |
OPERATING LEASES | NOTE 8 – OPERATING LEASES The Company has two operating lease agreements for its warehouse and office facilities. The first lease, originally signed in 2019, expired in February 2023. In January 2023, the Company signed an amendment to the first lease and extended the first lease for three years commencing March 1, 2023 to February 28, 2026. Lease payments for the amended first lease total $ 2,596 58 74 84 2,392 The Company’s second operating lease, originally signed in 2018, expired in August 2023. In May 2023, the Company signed an amendment to the second lease and extended the second lease for three years commencing September 1, 2023 to August 31, 2026. Lease payments for the amended second lease will total $ 1,300 31 37 41 1,184 The Company also has a third lease on a month-to-month basis and is charged $ 25 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 Nine Months September 30, Nine Months September 30, Lease Cost Operating lease cost $ 1,013 $ 726 Operating lease cost (of which $ 327 686 275 451 $ 1,013 $ 726 Other Information Weighted average remaining lease term – operating leases (in years) 2.7 0.7 Average discount rate – operating leases 5.13 % 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 operating right-of-use assets, net of accumulated amortization of $ 409 2,406 $ 3,103 $ 411 Short-term operating lease liabilities $ 1,045 $ 453 Long-term operating lease liabilities 2,162 — Total operating lease liabilities $ 3,207 $ 453 Maturities of the Company’s lease liabilities are as follows (in thousands): SCHEDULE OF MATURITIES OF LEASE LIABILITIES Year Ending Operating Leases 2023 (remaining 3 months) $ 267 2024 1,250 2025 1,446 2026 496 Total lease payments 3,459 Less: Imputed interest/present value discount (252 ) Present value of lease liabilities $ 3,207 Rent expense for the nine months ended September 30, 2023 and 2022 was $ 1,023 726 |
EMPLOYEE RETENTION CREDITS
EMPLOYEE RETENTION CREDITS | 9 Months Ended |
Sep. 30, 2023 | |
Employee Retention Credits | |
EMPLOYEE RETENTION CREDITS | NOTE 9 - EMPLOYEE RETENTION CREDITS The Consolidated Appropriations Act, passed in December 2021, expanded the employee retention credit (“ERC”) program through December 2021. The credits cover 70 7 2,000 2,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS On November 3, 2023, the Company entered into a Warrant Exchange Agreement (the “Agreement”) with entities affiliated with Empery Asset Management, LP (the “Empery Entities”), who are holders of the Company’s outstanding warrants (the “Warrants”) to purchase an aggregate of 24,122 0.0001 12,062 On November 1, 2023, the Company issued another note payable to its Chief Executive Officer in the amount of $ 28 1 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
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”, “we” or “us”). 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. For the nine months ended September 30, 2023, the Company recorded a net loss of $ 3,393 3,084 Notwithstanding the net loss for the nine-month period ended September 30, 2023, management concluded that the Company will have adequate cash flow from operations and available line of credit in 2023 and 2024 so that it is probable that the Company will be able to fund its current operating plan and satisfy its liquidity requirements within one year from the date the Company’s September 30, 2023 financial statements are issued. As of September 30, 2023, the Company had a cash balance of $ 296 119 14,788 13,316 |
Impact of COVID-19 and Inflation | Impact of COVID-19 and Inflation COVID-19. Inflation. |
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 nine months ended September 30, 2023 and 2022 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, 2022 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended December 31, 2022 and 2021 contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 31, 2023. These financial statements should be read in conjunction with that report. In accordance with the “Segment Reporting” Topic of the Accounting Standards Codification, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) determined that the Company has only one reporting unit. |
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 net realizable value, impairment analysis of long-term assets, valuation allowance on deferred tax assets, accruals for potential liabilities, accruals for warranty reserves, assumptions made in valuing equity instruments issued for services, and assumptions used in the determination of the Company’s liquidity. 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. Product 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 determines whether delivery has occurred based on when title transfers and the risks and rewards of ownership have transferred to the customer, which usually occurs when the Company places the product with the customer’s carrier or delivers the product to a customer’s location. The Company regularly reviews its customers’ financial positions to ensure that collectability is reasonably assured. The Company also recognizes revenues from engineering services, technical support, and sale of accessories that support the Company’s direct current, or DC, power systems, and from the rental of equipment. Revenue is recognized when transfer of control to the customer has been made and the Company’s performance obligation has been fulfilled. The Company’s revenue from engineering services, technical support services, and product accessories are clearly defined in each transaction with its customers and have not been significant to date. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: SCHEDULE OF DISAGGREGATED NET SALES 2023 2022 Three months ended 2023 2022 (Unaudited) (Unaudited) DC power systems $ 1,611 $ 1,659 Engineering & Tech Support Services 200 28 Accessories 100 20 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended 2023 2022 (Unaudited) (Unaudited) DC power systems $ 11,131 $ 9,474 Engineering & Tech Support Services 254 105 Accessories 303 111 Total net sales $ 11,688 $ 9,690 The following table shows the Company’s disaggregated net sales by customer type: 2023 2022 Three months ended 2023 2022 (Unaudited) (Unaudited) Telecom $ 1,827 $ 1,538 Government/Military 2 2 Marine 60 140 Other (backup DC power to various industries ) 22 27 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended 2023 2022 (Unaudited) (Unaudited) Telecommunications $ 11,222 $ 9,435 Government/Military 330 31 Marine 88 157 Other (backup DC power to various industries ) 48 67 Total net sales $ 11,688 $ 9,690 The following tables shows the Company’s net sales by the respective geographical regions of our customers: 2023 2022 Three months ended September 30, 2023 2022 (Unaudited) (Unaudited) United States $ 1,883 $ 1,590 Canada 16 35 South Pacific Islands 8 — Other Asia Pacific 4 — Europe and Middle East — 82 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended September 30, 2023 2022 (Unaudited) (Unaudited) United States $ 8,894 $ 9,460 Canada 178 49 South Pacific Islands 2,582 49 Japan — 10 Other Asia Pacific 8 24 Europe and Middle East — 98 Africa 26 — Total net sales $ 11,688 $ 9,690 For the three-months ended September 30, 2023 and 2022, international sales totaled $ 28 117 2,794 230 |
Inventories | Inventories As of September 30, 2023 and December 31, 2022, inventories consisted of the following: SCHEDULE OF INVENTORIES NET September 30, December 31, (unaudited) 2022 Raw materials $ 15,580 $ 12,277 Finished goods 3,575 3,183 Total Inventories $ 19,155 $ 15,460 Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. For the nine-months ended September 30, 2023 and 2022, there were no write-downs of inventory. |
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 September 30, 2023 and December 31, 2022, the Company had accrued a liability for warranty reserve of $ 600 600 SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY Changes in estimates for warranties September 30, December 31, 2022 Balance at beginning of the period $ 600 $ 600 Payments (384 ) (508 ) Provision for warranties 384 508 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 certain 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 and notes payable approximate their fair values since the interest rates on these obligations are based on prevailing market interest rates. |
Concentrations | Concentrations Cash Cash denominated in Australian Dollars with a U.S. Dollar equivalent of $ 14 8 1 23 Revenues. 65 87 96 90 1 7 For the nine months ended September 30, 2023, sales to the Company’s largest customer, a Tier-1 telecommunications wireless carrier in the U.S., accounted for 52 22 88 96 97 24 2 Accounts receivable 79 10 74 15 Accounts payable 34 13 6 51 3 3 |
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 September 30, 2023 September 30, 2022 (Unaudited) (Unaudited) 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. The standard is effective for the Company for interim and annual reporting periods beginning after December 15, 2022. Effective January 1, 2023, the Company adopted ASU 2016-13 and that adoption did not have a material impact on the Company’s financial position, results of operations, and cash flows. 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) | 9 Months Ended |
Sep. 30, 2023 | |
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 2023 2022 Three months ended 2023 2022 (Unaudited) (Unaudited) DC power systems $ 1,611 $ 1,659 Engineering & Tech Support Services 200 28 Accessories 100 20 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended 2023 2022 (Unaudited) (Unaudited) DC power systems $ 11,131 $ 9,474 Engineering & Tech Support Services 254 105 Accessories 303 111 Total net sales $ 11,688 $ 9,690 The following table shows the Company’s disaggregated net sales by customer type: 2023 2022 Three months ended 2023 2022 (Unaudited) (Unaudited) Telecom $ 1,827 $ 1,538 Government/Military 2 2 Marine 60 140 Other (backup DC power to various industries ) 22 27 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended 2023 2022 (Unaudited) (Unaudited) Telecommunications $ 11,222 $ 9,435 Government/Military 330 31 Marine 88 157 Other (backup DC power to various industries ) 48 67 Total net sales $ 11,688 $ 9,690 The following tables shows the Company’s net sales by the respective geographical regions of our customers: 2023 2022 Three months ended September 30, 2023 2022 (Unaudited) (Unaudited) United States $ 1,883 $ 1,590 Canada 16 35 South Pacific Islands 8 — Other Asia Pacific 4 — Europe and Middle East — 82 Total net sales $ 1,911 $ 1,707 2023 2022 Nine months ended September 30, 2023 2022 (Unaudited) (Unaudited) United States $ 8,894 $ 9,460 Canada 178 49 South Pacific Islands 2,582 49 Japan — 10 Other Asia Pacific 8 24 Europe and Middle East — 98 Africa 26 — Total net sales $ 11,688 $ 9,690 |
SCHEDULE OF INVENTORIES NET | As of September 30, 2023 and December 31, 2022, inventories consisted of the following: SCHEDULE OF INVENTORIES NET September 30, December 31, (unaudited) 2022 Raw materials $ 15,580 $ 12,277 Finished goods 3,575 3,183 Total Inventories $ 19,155 $ 15,460 |
SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY | SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY Changes in estimates for warranties September 30, December 31, 2022 Balance at beginning of the period $ 600 $ 600 Payments (384 ) (508 ) Provision for warranties 384 508 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 September 30, 2023 September 30, 2022 (Unaudited) (Unaudited) Options 140,000 140,000 Warrants 24,122 24,122 Total 164,122 164,122 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, December 31, (Unaudited) 2022 Production tooling, jigs, fixtures $ 71 $ 71 Shop equipment and machinery 3,565 3,371 Vehicles 177 177 Leasehold improvements 390 390 Office equipment 185 185 Software 106 106 Total property and equipment, cost 4,494 4,300 Less: accumulated depreciation and amortization (4,071 ) (3,762 ) Property and equipment, net $ 423 $ 538 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF NOTES PAYABLE | Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE September 30, December 31, (Unaudited) 2022 Notes payable $ 88 $ 268 Less current portion (88 ) (211 ) Notes payable, long term $ — $ 57 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022 140,000 $ 5.22 Granted — — Exercised/Forfeited/Expired — — Outstanding, September 30, 2023 (unaudited) 140,000 $ 5.22 Exercisable, September 30, 2023 (unaudited) 140,000 $ 5.22 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Stock Warrants | |
SCHEDULE OF WARRANTS OUTSTANDING | At September 30, 2023, warrant shares outstanding were as follows: SCHEDULE OF WARRANTS OUTSTANDING Number of Weighted Average Outstanding December 31, 2022 24,122 $ 3.13 Issued — — Exercised/Forfeited/Expired — — Outstanding, September 30, 2023 (unaudited) 24,122 $ 3.13 Exercisable, September 30, 2023 (unaudited) 24,122 $ 3.13 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 Nine Months September 30, Nine Months September 30, Lease Cost Operating lease cost $ 1,013 $ 726 Operating lease cost (of which $ 327 686 275 451 $ 1,013 $ 726 Other Information Weighted average remaining lease term – operating leases (in years) 2.7 0.7 Average discount rate – operating leases 5.13 % 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 operating right-of-use assets, net of accumulated amortization of $ 409 2,406 $ 3,103 $ 411 Short-term operating lease liabilities $ 1,045 $ 453 Long-term operating lease liabilities 2,162 — Total operating lease liabilities $ 3,207 $ 453 |
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 2023 (remaining 3 months) $ 267 2024 1,250 2025 1,446 2026 496 Total lease payments 3,459 Less: Imputed interest/present value discount (252 ) Present value of lease liabilities $ 3,207 |
SCHEDULE OF DISAGGREGATED NET S
SCHEDULE OF DISAGGREGATED NET SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | $ 1,911 | $ 1,707 | $ 11,688 | $ 9,690 |
UNITED STATES | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 1,883 | 1,590 | 8,894 | 9,460 |
CANADA | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 16 | 35 | 178 | 49 |
South Pacific Islands [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 8 | 2,582 | 49 | |
Other Asia Pacific [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 4 | 8 | 24 | |
Europe And Middle East [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 82 | 98 | ||
JAPAN | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 10 | |||
Africa [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 26 | |||
Telecommunications [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 1,827 | 1,538 | 11,222 | 9,435 |
Government And Military [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 2 | 2 | 330 | 31 |
Marine [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 60 | 140 | 88 | 157 |
Other [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 22 | 27 | 48 | 67 |
D C Power Systems [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 1,611 | 1,659 | 11,131 | 9,474 |
Engineering And Tech Support Services [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | 200 | 28 | 254 | 105 |
Accessories [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Total net sales | $ 100 | $ 20 | $ 303 | $ 111 |
SCHEDULE OF INVENTORIES NET (De
SCHEDULE OF INVENTORIES NET (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 15,580 | $ 12,277 |
Finished goods | 3,575 | 3,183 |
Total Inventories | $ 19,155 | $ 15,460 |
SCHEDULE OF RECONCILIATION OF T
SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Balance at beginning of the period | $ 600 | $ 600 |
Payments | (384) | (508) |
Provision for warranties | 384 | 508 |
Balance at end of the period | $ 600 | $ 600 |
SCHEDULE OF DILUTED EARNINGS PE
SCHEDULE OF DILUTED EARNINGS PER SHARE (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 164,122 | 164,122 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 140,000 | 140,000 |
Warrant [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 | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||||||||
Net loss | $ 1,844 | $ 2,381 | $ 3,393 | $ 4,240 | ||||
Net cash used in operations | 3,084 | 4,532 | ||||||
Cash and cash equivalents | 296 | 296 | $ 211 | |||||
Line of credit | 119 | 119 | ||||||
Stockholders equity | 14,788 | 19,525 | 14,788 | 19,525 | 18,181 | $ 16,632 | $ 21,391 | $ 23,250 |
Working capital | 13,316 | 13,316 | ||||||
Net sales | 1,911 | $ 1,707 | 11,688 | $ 9,690 | ||||
Warranty reserve 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 | 96% | 90% | 96% | 97% | ||||
Largest Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 79% | 74% | ||||||
Largest Customer Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 10% | 15% | ||||||
Largest Vendor One [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 34% | 51% | ||||||
Largest Vendor Two [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 13% | 3% | ||||||
Largest Vendor Three [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 6% | 3% | ||||||
Australia, Dollars | ||||||||
Product Information [Line Items] | ||||||||
Cash | $ 14 | $ 14 | $ 8 | |||||
Romania, New Lei | ||||||||
Product Information [Line Items] | ||||||||
Cash | 1 | 1 | $ 23 | |||||
International Sales [Member] | ||||||||
Product Information [Line Items] | ||||||||
Net sales | 28 | $ 117 | 2,794 | $ 230 | ||||
UNITED STATES | ||||||||
Product Information [Line Items] | ||||||||
Net sales | $ 1,883 | $ 1,590 | $ 8,894 | $ 9,460 | ||||
UNITED STATES | 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 | 65% | 52% | 88% | |||||
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 | 1% | 7% | 24% | 2% | ||||
Non-US [Member] | Largest Customer Two [Member] | Sales to Telecommunications Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk | 87% | 22% |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 4,494 | $ 4,300 |
Less: accumulated depreciation and amortization | (4,071) | (3,762) |
Property and equipment, net | 423 | 538 |
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 | 3,565 | 3,371 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 177 | 177 |
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 | 185 | 185 |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 82 | $ 124 | $ 309 | $ 387 |
Depreciation expenses | $ 79 | $ 119 | $ 298 | $ 374 |
NOTES PAYABLE, RELATED PARTY (D
NOTES PAYABLE, RELATED PARTY (Details Narrative) - Chief Executive Officer [Member] - USD ($) $ in Thousands | 1 Months Ended | |
Aug. 31, 2023 | May 31, 2023 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Notes payable | $ 73 | $ 160 |
Maturity date | Jul. 17, 2024 | Apr. 25, 2024 |
Notes payable percentage | 1% | 1% |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - Equipment [Member] - Several Financing Agreements [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Debt Instrument [Line Items] | |
Monthly payments | $ 8 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt term | 2 years |
Interest rate | 3.40% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt term | 5 years |
Interest rate | 5% |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 9 Months Ended | |||||
Sep. 05, 2023 | May 25, 2023 | Apr. 13, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||
Lines of credit outstanding | $ 5,194,000 | $ 1,884,000 | ||||
Line of credit facility | 3,310,000 | |||||
Line of credit | 119,000 | |||||
Third Modification Loan [Member] | Inventory Interest Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Lines of credit outstanding | 5,194 | |||||
Line of credit facility | $ 146 | |||||
Line of credit | 122 | |||||
Fourth Modification Loan [Member] | Inventory Interest Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility description | (a) agreed to amend the amount of available advances under the Loan Agreement such that the aggregate amount of the outstanding advances under the revolving credit facility may not be greater than $6 million, and (b) raised the concentration percentage applicable to certain Tier-1 telecommunication customers from 50% to 75% in the definition of eligible accounts. | |||||
Line of credit facility | $ 6,000,000 | |||||
Fifth Modification Loan [Member] | Inventory Interest Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility description | (a) extend the 90-day period on AT&T accounts receivable to 120 days; (b) increase the lesser of (i) 35% of the lower of cost or wholesale market value of certain inventory of the Company or (ii) $2.5 million to the lessor of (i) 40% of the aggregate eligible inventory value of eligible inventory or (ii) $4.0 million; (c) increase the aggregate advance limit under the credit facility from $6.0 million to $7.5 million; and (e) among other items, charge a fee of $23, 1.5% of the $1.5 million increase in the inventory advance limit, plus a $1 document fee, to Pinnacle, as conditions precedent to the Fifth Modification. | |||||
Pinnacle Bank [Member] | Inventory Interest Rate [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit | $ 7,500,000 | |||||
Pinnacle Bank [Member] | Inventory Interest Rate [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit | $ 6,000,000 | |||||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Lines of credit outstanding | 5,194,000 | |||||
Line of credit remaining borrowing capacity | $ 119,000 | |||||
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, interest rate description | Borrowings based on receivables bears an interest on the daily balance at a rate of 1.25% above the prime rate, but in no event less than 3.75% per annum (9.75% at September 30, 2023 and 8.75% at December 31, 2022). Interest on the portion of the daily balance consisting of advances against inventory accrues interest at a rate of 2.25% above the prime rate, but in no event less than 4.75% per annum (10.75% at September 30, 2023 and 9.75% at December 31, 2022). | |||||
Line of credit facility, fee percentage | 1.125% | |||||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | Standard Interest Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, interest rate during period | 1.25% | |||||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | Standard Interest Rate [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, interest rate during period | 3.75% | |||||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | 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) | 9 Months Ended |
Sep. 30, 2023 $ / 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 | shares | |
Weighted average exercise price, exercised | $ / 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) - USD ($) | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Jul. 08, 2016 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding options | 140,000 | 140,000 | |
Outstanding options intrinsic value | $ 0 | ||
December 2027 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Option share to be expire | 30,000 | ||
April 2028 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Option share to be expire | 110,000 | ||
Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options exercise price | $ 4.84 | ||
Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options exercise price | $ 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) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Stock Warrants | |
Number of warrants, outstanding, beginning balance | shares | 24,122 |
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 ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stock Warrants | ||
Number of outstanding warrants exercisable | 24,122 | 24,122 |
Warrants exercise price | $ 3.13 | |
Description of warrant expiration date | expire in July 2025 | |
Outstanding and exercisable warrants intrinsic value | $ 0 |
SCHEDULE OF RENT EXPENSE AND SU
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Leases | ||
Operating lease cost | $ 1,013 | $ 726 |
Weighted average remaining lease term - operating leases (in years) | 2 years 8 months 12 days | 8 months 12 days |
Average discount rate - operating leases | 5.13% | 3.75% |
SCHEDULE OF RENT EXPENSE AND _2
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating lease cost | $ 1,013 | $ 726 |
General and Administrative Expense [Member] | ||
Operating lease cost | 327 | 275 |
Cost of Sales [Member] | ||
Operating lease cost | $ 686 | $ 451 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Operating Leases | |||
Long-term operating right-of-use assets, net of accumulated amortization of $409 and $2,406, respectively | $ 3,103 | $ 240 | $ 411 |
Short-term operating lease liabilities | 1,045 | 268 | 453 |
Long-term operating lease liabilities | 2,162 | ||
Total operating lease liabilities | $ 3,207 | $ 453 |
SCHEDULE OF SUPPLEMENTAL BALA_2
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Operating Leases | ||
Accumulated amortization of right-of-use assets | $ 409 | $ 2,406 |
SCHEDULE OF MATURITIES OF LEASE
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Operating Leases | ||
2023 (remaining 3 months) | $ 267 | |
2024 | 1,250 | |
2025 | 1,446 | |
2026 | 496 | |
Total lease payments | 3,459 | |
Less: Imputed interest/present value discount | (252) | |
Present value of lease liabilities | $ 3,207 | $ 453 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2023 | May 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||
Lease payments | $ 1,300 | $ 2,596 | ||
Operating lease payments, remainder of fiscal year | 31 | 58 | ||
Operating lease payments, year one | 37 | 74 | ||
Operating lease payments, year three | 41 | 84 | ||
Initial recognition of operating lease right-of-use assets and operating lease liabilities | $ 2,392 | $ 1,184 | ||
Rent expense | 1,023 | $ 726 | ||
Third Lease [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Rent expense | $ 25 |
EMPLOYEE RETENTION CREDITS (Det
EMPLOYEE RETENTION CREDITS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2023 | Dec. 31, 2022 | |
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 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Nov. 03, 2023 | Nov. 01, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | May 31, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Chief Executive Officer [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Notes payable | $ 73 | $ 160 | ||||
Subsequent Event [Member] | Chief Executive Officer [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Notes payable | $ 28 | |||||
Bearing interest rate | 1% | |||||
Warrant Exchange Agreement [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Class of warrant outstanding | 24,122 | |||||
Warrant Exchange Agreement [Member] | Subsequent Event [Member] | Warrant [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, par value | $ 0.0001 | |||||
Stock issued | 12,062 |