Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 15, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
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 $0.0001 per share | |
Trading Symbol | POLA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,561,612 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 212 | $ 549 |
Accounts receivable | 1,282 | 1,676 |
Inventories | 16,221 | 16,522 |
Prepaid expenses | 444 | 455 |
Employee retention credit receivable | 2,000 | 2,000 |
Income taxes receivable | 787 | 787 |
Total current assets | 20,946 | 21,989 |
Other assets: | ||
Operating lease right-of-use assets | 2,530 | 2,818 |
Property and equipment, net | 278 | 344 |
Deposits | 108 | 108 |
Total assets | 23,862 | 25,259 |
Current liabilities | ||
Accounts payable | 1,194 | 1,762 |
Customer deposits | 2,545 | 1,618 |
Accrued liabilities and other current liabilities | 1,131 | 1,151 |
Line of credit | 4,914 | 4,238 |
Current portion of operating lease liabilities | 1,197 | 1,124 |
Total current liabilities | 11,278 | 10,214 |
Operating lease liabilities, net of current portion | 1,537 | 1,856 |
Total liabilities | 12,815 | 12,070 |
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, 17,579,089 shares issued and 17,561,612 shares outstanding on March 31, 2024, and December 31, 2023 | 2 | 2 |
Additional paid-in capital | 38,886 | 38,886 |
Accumulated deficit | (27,801) | (25,659) |
Treasury Stock, at cost (17,477 shares) | (40) | (40) |
Total stockholders’ equity | 11,047 | 13,189 |
Total liabilities and stockholders’ equity | 23,862 | 25,259 |
Related Party [Member] | ||
Current liabilities | ||
Notes payable | 257 | 257 |
Nonrelated Party [Member] | ||
Current liabilities | ||
Notes payable | $ 40 | $ 64 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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 | 17,579,089 | 17,579,089 |
Common stock, shares outstanding | 17,561,612 | 17,561,612 |
Treasury stock, shares | 17,477 | 17,477 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Net Sales | $ 1,775 | $ 4,190 |
Cost of Sales | 2,177 | 3,435 |
Gross profit (loss) | (402) | 755 |
Operating Expenses | ||
Sales and marketing | 231 | 333 |
Research and development | 220 | 346 |
General and administrative | 1,126 | 1,111 |
Total operating expenses | 1,577 | 1,790 |
Loss from operations | (1,979) | (1,035) |
Other income (expenses) | ||
Interest expense and finance costs | (163) | (78) |
Total other income (expenses), net | (163) | (78) |
Net loss | $ (2,142) | $ (1,113) |
Net loss per share, basic | $ (0.12) | $ (0.09) |
Net loss per share, diluted | $ (0.12) | $ (0.09) |
Weighted average shares outstanding, basic | 17,561,612 | 12,949,550 |
Weighted average shares outstanding, diluted | 17,561,612 | 12,949,550 |
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 |
Balance at Dec. 31, 2022 | $ 1 | $ 37,331 | $ (19,111) | $ (40) | $ 18,181 |
Balance, shares at Dec. 31, 2022 | 12,967,027 | ||||
Net loss | (1,113) | (1,113) | |||
Balance at Mar. 31, 2023 | $ 1 | 37,331 | (20,224) | (40) | 17,068 |
Balance, shares at Mar. 31, 2023 | 12,967,027 | ||||
Balance at Dec. 31, 2023 | $ 2 | 38,886 | (25,659) | (40) | 13,189 |
Balance, shares at Dec. 31, 2023 | 17,579,089 | ||||
Net loss | (2,142) | (2,142) | |||
Balance at Mar. 31, 2024 | $ 2 | $ 38,886 | $ (27,801) | $ (40) | $ 11,047 |
Balance, shares at Mar. 31, 2024 | 17,579,089 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (2,142) | $ (1,113) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 66 | 116 |
Changes in operating assets and liabilities | ||
Accounts receivable | 394 | (986) |
Inventories | 301 | (1,415) |
Prepaid expenses | 11 | 777 |
Operating lease right-of-use asset | 288 | 196 |
Accounts payable | (568) | 794 |
Customer deposits | 927 | 643 |
Accrued expenses and other current liabilities | (20) | 25 |
Operating lease liabilities | (246) | (193) |
Net cash used in operating activities | (989) | (1,156) |
Cash flows from financing activities: | ||
Proceeds from advances from credit facility | 676 | 1,127 |
Repayment of notes payable | (24) | (63) |
Net cash provided by financing activities | 652 | 1,064 |
Decrease in cash and cash equivalents | (337) | (92) |
Cash and cash equivalents, beginning of period | 549 | 211 |
Cash and cash equivalents, end of period | 212 | 119 |
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Initial recognition of operating lease right-of-use assets and operating lease liabilities | $ 2,392 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
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. Going concern The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. For the three months ended March 31, 2024, the Company recorded a net loss of $ 2,142 989 As of March 31, 2024, the Company had a cash balance of $ 212 216 11,047 9,668 Impact of inflation Basis of Presentation of Unaudited Financial Information The unaudited condensed financial statements of the Company for the three months ended March 31, 2024 and 2023 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, 2023 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended December 31, 2023 and 2022 contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on April 1, 2024. 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 estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, impairment testing of recorded long-term assets, the realizability of deferred tax assets and the related valuation allowance, accruals for warranty reserves, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and assumptions used in the determination of the Company’s liquidity. 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. 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. 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-month periods ended March 31, 2024 and 2023. The Company’s rental contracts are fixed price contracts for fixed durations of time and include freight and delivery charges and are recognized on a straight-line basis over the rental period. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: SCHEDULE OF DISAGGREGATED NET SALES 2024 2023 Three months ended 2024 2023 (Unaudited) (Unaudited) DC power systems $ 1,567 $ 4,081 Engineering & Tech Support Services 86 24 Accessories 122 85 Total net sales $ 1,775 $ 4,190 The following table shows the Company’s disaggregated net sales by customer type: 2024 2023 Three months ended 2024 2023 (Unaudited) (Unaudited) Telecom $ 1,258 $ 3,988 Government/Military 460 193 Marine 38 — Other (backup DC power to various industries) 19 9 Total net sales $ 1,775 $ 4,190 The following tables shows the Company’s net sales by the respective geographical regions of our customers (in thousands): SCHEDULE OF NET SALES BY GEOGRAPHICAL REGIONS 2024 2023 Three months ended March 31, 2024 2023 (Unaudited) (Unaudited) United States $ 1,675 $ 3,065 South Pacific Islands 79 1,120 Japan 20 — Other Asia Pacific 1 5 Total net sales $ 1,775 $ 4,190 For the three months ended March 31, 2024, and 2023, international sales totaled $ 99 1,125 Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. The Company records adjustments to its inventory based on an estimated forecast of the inventory demand, taking into consideration, among others, inventory turnover, inventory quantities on hand, unfilled customer order quantities, forecasted demand, current prices, competitive pricing, and trends and performance of similar products. If the estimated net realizable value is determined to be less than the recorded cost of the inventory, the difference is recognized as a loss in the period in which it occurs. Once inventory has been written down, it creates a new cost basis for inventory that may not be subsequently written up. For the three months ended March 31, 2024, and the year ended December 31, 2023, there were no As of March 31, 2024 and December 31, 2023, inventories consisted of the following: SCHEDULE OF INVENTORIES NET March 31, 2024 December 31, 2023 (unaudited) Raw materials $ 14,205 $ 14,313 Finished goods 2,016 2,209 Total Inventories $ 16,221 $ 16,522 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 March 31, 2024 and December 31, 2023, 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 March 31, 2024 December 31, 2023 (unaudited) Balance at beginning of the period $ 600 $ 600 Payments (71 ) (469 ) Provision for warranties 71 469 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. Segments Under ASC 280, Segment Reporting Concentrations Revenues. 49 25 49 27 71 95 6 27 Accounts receivable 70 10 At December 31, 2023, 69 16 Accounts payable 37 9 5 30 10 5 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 March 31, 2024 March 31, 2023 (Unaudited) (Unaudited) Options 140,000 140,000 Warrants — 24,122 Total 140,000 164,122 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. As a smaller reporting company, ASU 2016-13 was effective for the Company on January 1, 2023. The adoption of ASU 2016-03 did not have a material impact on the Company’s results of operations, financial position, or cash flows. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure Segment Reporting In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-99 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company does not expect that the guidance will have a material impact on our financial statements or notes to our financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 December 31, 2023 (Unaudited) Shop equipment and machinery $ 3,565 $ 3,565 Production tooling, jigs, fixtures 71 71 Vehicles 177 177 Leasehold improvements 390 390 Office equipment 185 185 Software 106 106 Total property and equipment, cost 4,494 4,494 Less: accumulated depreciation and amortization (4,216 ) (4,150 ) Property and equipment, net $ 278 $ 344 Depreciation and amortization expense on property and equipment for the three months ended March 31, 2024 and 2023 was $ 66 116 63 113 |
NOTES PAYABLE, RELATED PARTY
NOTES PAYABLE, RELATED PARTY | 3 Months Ended |
Mar. 31, 2024 | |
Related Party [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
NOTES PAYABLE, RELATED PARTY | NOTE 3 – NOTES PAYABLE, RELATED PARTY During 2023, the Company’s Chief Executive Officer extended three loans to the Company for aggregate principal amount of $ 257 1 5 7 257 180 25 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2024 | |
Nonrelated Party [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
NOTES PAYABLE | NOTE 4 – NOTES PAYABLE Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE March 31, 2024 December 31, 2023 (Unaudited) Total Equipment Notes Payable $ 40 $ 64 Less Current Portion 40 64 Notes Payable, Noncurrent portion $ — $ — The Company has entered into several financing agreements for the purchase of equipment in prior years. The terms of these financing arrangements are for a term of 2 5 1.9 6.9 mature between September 2023 and July 2024 8 |
LINE OF CREDIT
LINE OF CREDIT | 3 Months Ended |
Mar. 31, 2024 | |
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 (the “Loan Agreement”) with Pinnacle Bank (“Pinnacle”). The Loan Agreement, as amended, provides for a revolving credit facility under which Pinnacle may make advances to the Company up to $ 7,500 (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) 40% of the aggregate eligible inventory value of eligible inventory or (ii) $4.0 million, plus (c) up to $146 collateralized by certain equipment The Loan Agreement expires on September 30, 2024 At December 31, 2023, the outstanding balance under the line of credit was $ 4,238 676 4,914 216 Borrowings based on receivables bears an interest on the daily balance at a rate of 1.25 3.75 9.75 9.75 2.25 4.75 10.75 10.75 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 March 31, 2024. The Loan Agreement obligates the Company to pay Pinnacle a yearly facility fee in an amount equal to 1.125 |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Operating Leases | |
OPERATING LEASES | NOTE 6 – OPERATING LEASES The Company has two operating lease agreements for its warehouse and office facilities. The first lease expired February 28, 2023 August 31, 2023 89 111 125 3,896 3,578 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 Three Months Ended Three Months Ended Lease Cost Operating lease cost $ 282 $ 212 Operating lease cost (of which $ 37 245 28 181 $ 282 $ 212 Other Information Weighted average remaining lease term – operating leases (in years) 2.2 1.7 Average discount rate – operating leases 6.13 % 6.13 % The supplemental balance sheet information related to leases for the period is as follows: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION At At Operating leases (in thousands) Long-term right-of-use assets, net of accumulated amortization of $ 1,046 760 $ 2,530 $ 2,818 Current portion of operating lease liabilities $ 1,197 $ 1,124 Noncurrent portion of operating lease liabilities 1,537 1,856 Total operating lease liabilities $ 2,734 $ 2,980 Maturities of the Company’s lease liabilities are as follows (in thousands): SCHEDULE OF MATURITIES OF LEASE LIABILITIES Year Ending Operating Leases 2024 (remaining 9 months) 968 2025 1,446 2026 496 Total lease payments 2910 Less: Imputed interest/present value discount (176 ) Present value of lease liabilities $ 2,734 Rent expense for the three months ended March 31, 2024 and 2023 was $ 399 287 |
STOCK OPTIONS
STOCK OPTIONS | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 7 – STOCK OPTIONS The following table summarizes stock option activity: SCHEDULE OF STOCK OPTION ACTIVITY Number of Weighted Average Options Exercise Price Outstanding, December 31, 2023 140,000 $ 5.22 Granted — — Exercised — — Outstanding, March 31, 2024 (unaudited) 140,000 $ 5.22 Exercisable, March 31, 2024 (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 December 31, 2023, the Company had total outstanding options of 140,000 4.84 5.60 30,000 110,000 The outstanding options had no |
STOCK WARRANTS
STOCK WARRANTS | 3 Months Ended |
Mar. 31, 2024 | |
Stock Warrants | |
STOCK WARRANTS | NOTE 8 – STOCK WARRANTS At March 31, 2023, the Company had warrants purchase an aggregate of 24,122 12,062 no |
EMPLOYEE RETENTION CREDITS
EMPLOYEE RETENTION CREDITS | 3 Months Ended |
Mar. 31, 2024 | |
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 2,000 700 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
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. |
Going concern | Going concern The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. For the three months ended March 31, 2024, the Company recorded a net loss of $ 2,142 989 As of March 31, 2024, the Company had a cash balance of $ 212 216 11,047 9,668 |
Impact of inflation | Impact of 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 months ended March 31, 2024 and 2023 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, 2023 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended December 31, 2023 and 2022 contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on April 1, 2024. 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 estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, impairment testing of recorded long-term assets, the realizability of deferred tax assets and the related valuation allowance, accruals for warranty reserves, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and assumptions used in the determination of the Company’s liquidity. |
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. 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. 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-month periods ended March 31, 2024 and 2023. The Company’s rental contracts are fixed price contracts for fixed durations of time and include freight and delivery charges and are recognized on a straight-line basis over the rental period. Disaggregation of Net Sales The following table shows the Company’s disaggregated net sales by product type: SCHEDULE OF DISAGGREGATED NET SALES 2024 2023 Three months ended 2024 2023 (Unaudited) (Unaudited) DC power systems $ 1,567 $ 4,081 Engineering & Tech Support Services 86 24 Accessories 122 85 Total net sales $ 1,775 $ 4,190 The following table shows the Company’s disaggregated net sales by customer type: 2024 2023 Three months ended 2024 2023 (Unaudited) (Unaudited) Telecom $ 1,258 $ 3,988 Government/Military 460 193 Marine 38 — Other (backup DC power to various industries) 19 9 Total net sales $ 1,775 $ 4,190 The following tables shows the Company’s net sales by the respective geographical regions of our customers (in thousands): SCHEDULE OF NET SALES BY GEOGRAPHICAL REGIONS 2024 2023 Three months ended March 31, 2024 2023 (Unaudited) (Unaudited) United States $ 1,675 $ 3,065 South Pacific Islands 79 1,120 Japan 20 — Other Asia Pacific 1 5 Total net sales $ 1,775 $ 4,190 For the three months ended March 31, 2024, and 2023, international sales totaled $ 99 1,125 |
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. The Company records adjustments to its inventory based on an estimated forecast of the inventory demand, taking into consideration, among others, inventory turnover, inventory quantities on hand, unfilled customer order quantities, forecasted demand, current prices, competitive pricing, and trends and performance of similar products. If the estimated net realizable value is determined to be less than the recorded cost of the inventory, the difference is recognized as a loss in the period in which it occurs. Once inventory has been written down, it creates a new cost basis for inventory that may not be subsequently written up. For the three months ended March 31, 2024, and the year ended December 31, 2023, there were no As of March 31, 2024 and December 31, 2023, inventories consisted of the following: SCHEDULE OF INVENTORIES NET March 31, 2024 December 31, 2023 (unaudited) Raw materials $ 14,205 $ 14,313 Finished goods 2,016 2,209 Total Inventories $ 16,221 $ 16,522 |
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 March 31, 2024 and December 31, 2023, 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 March 31, 2024 December 31, 2023 (unaudited) Balance at beginning of the period $ 600 $ 600 Payments (71 ) (469 ) Provision for warranties 71 469 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. |
Segments | Segments Under ASC 280, Segment Reporting |
Concentrations | Concentrations Revenues. 49 25 49 27 71 95 6 27 Accounts receivable 70 10 At December 31, 2023, 69 16 Accounts payable 37 9 5 30 10 5 |
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 March 31, 2024 March 31, 2023 (Unaudited) (Unaudited) Options 140,000 140,000 Warrants — 24,122 Total 140,000 164,122 |
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. As a smaller reporting company, ASU 2016-13 was effective for the Company on January 1, 2023. The adoption of ASU 2016-03 did not have a material impact on the Company’s results of operations, financial position, or cash flows. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure Segment Reporting In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-99 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company does not expect that the guidance will have a material impact on our financial statements or notes to our financial statements. |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 2024 2023 Three months ended 2024 2023 (Unaudited) (Unaudited) DC power systems $ 1,567 $ 4,081 Engineering & Tech Support Services 86 24 Accessories 122 85 Total net sales $ 1,775 $ 4,190 The following table shows the Company’s disaggregated net sales by customer type: 2024 2023 Three months ended 2024 2023 (Unaudited) (Unaudited) Telecom $ 1,258 $ 3,988 Government/Military 460 193 Marine 38 — Other (backup DC power to various industries) 19 9 Total net sales $ 1,775 $ 4,190 |
SCHEDULE OF NET SALES BY GEOGRAPHICAL REGIONS | The following tables shows the Company’s net sales by the respective geographical regions of our customers (in thousands): SCHEDULE OF NET SALES BY GEOGRAPHICAL REGIONS 2024 2023 Three months ended March 31, 2024 2023 (Unaudited) (Unaudited) United States $ 1,675 $ 3,065 South Pacific Islands 79 1,120 Japan 20 — Other Asia Pacific 1 5 Total net sales $ 1,775 $ 4,190 |
SCHEDULE OF INVENTORIES NET | As of March 31, 2024 and December 31, 2023, inventories consisted of the following: SCHEDULE OF INVENTORIES NET March 31, 2024 December 31, 2023 (unaudited) Raw materials $ 14,205 $ 14,313 Finished goods 2,016 2,209 Total Inventories $ 16,221 $ 16,522 |
SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY | SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY Changes in estimates for warranties March 31, 2024 December 31, 2023 (unaudited) Balance at beginning of the period $ 600 $ 600 Payments (71 ) (469 ) Provision for warranties 71 469 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 March 31, 2024 March 31, 2023 (Unaudited) (Unaudited) Options 140,000 140,000 Warrants — 24,122 Total 140,000 164,122 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT March 31, 2024 December 31, 2023 (Unaudited) Shop equipment and machinery $ 3,565 $ 3,565 Production tooling, jigs, fixtures 71 71 Vehicles 177 177 Leasehold improvements 390 390 Office equipment 185 185 Software 106 106 Total property and equipment, cost 4,494 4,494 Less: accumulated depreciation and amortization (4,216 ) (4,150 ) Property and equipment, net $ 278 $ 344 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Nonrelated Party [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
SCHEDULE OF NOTES PAYABLE | Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE March 31, 2024 December 31, 2023 (Unaudited) Total Equipment Notes Payable $ 40 $ 64 Less Current Portion 40 64 Notes Payable, Noncurrent portion $ — $ — |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Operating Leases | |
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION | SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION Three Months Ended Three Months Ended Lease Cost Operating lease cost $ 282 $ 212 Operating lease cost (of which $ 37 245 28 181 $ 282 $ 212 Other Information Weighted average remaining lease term – operating leases (in years) 2.2 1.7 Average discount rate – operating leases 6.13 % 6.13 % |
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 (in thousands) Long-term right-of-use assets, net of accumulated amortization of $ 1,046 760 $ 2,530 $ 2,818 Current portion of operating lease liabilities $ 1,197 $ 1,124 Noncurrent portion of operating lease liabilities 1,537 1,856 Total operating lease liabilities $ 2,734 $ 2,980 |
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 2024 (remaining 9 months) 968 2025 1,446 2026 496 Total lease payments 2910 Less: Imputed interest/present value discount (176 ) Present value of lease liabilities $ 2,734 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table summarizes stock option activity: SCHEDULE OF STOCK OPTION ACTIVITY Number of Weighted Average Options Exercise Price Outstanding, December 31, 2023 140,000 $ 5.22 Granted — — Exercised — — Outstanding, March 31, 2024 (unaudited) 140,000 $ 5.22 Exercisable, March 31, 2024 (unaudited) 140,000 $ 5.22 |
SCHEDULE OF DISAGGREGATED NET S
SCHEDULE OF DISAGGREGATED NET SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | $ 1,775 | $ 4,190 |
Telecommunications [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 1,258 | 3,988 |
Government/Military [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 460 | 193 |
Marine [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 38 | |
Other [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 19 | 9 |
DC Power Systems [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 1,567 | 4,081 |
Engineering & Tech Support Services [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 86 | 24 |
Accessories [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | $ 122 | $ 85 |
SCHEDULE OF NET SALES BY GEOGRA
SCHEDULE OF NET SALES BY GEOGRAPHICAL REGIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total net sales | $ 1,775 | $ 4,190 |
UNITED STATES | ||
Total net sales | 1,675 | 3,065 |
South Pacific Islands [Member] | ||
Total net sales | 79 | 1,120 |
JAPAN | ||
Total net sales | 20 | |
Other Asia Pacific [Member] | ||
Total net sales | $ 1 | $ 5 |
SCHEDULE OF INVENTORIES NET (De
SCHEDULE OF INVENTORIES NET (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 14,205 | $ 14,313 |
Finished goods | 2,016 | 2,209 |
Total Inventories | $ 16,221 | $ 16,522 |
SCHEDULE OF RECONCILIATION OF T
SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Balance at beginning of the period | $ 600 | $ 600 |
Payments | (71) | (469) |
Provision for warranties | 71 | 469 |
Balance at end of the period | $ 600 | $ 600 |
SCHEDULE OF DILUTED EARNINGS PE
SCHEDULE OF DILUTED EARNINGS PER SHARE (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 140,000 | 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 |
ORGANIZATION AND SUMMARY OF S_4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||||
Net loss | $ 2,142,000 | $ 1,113,000 | ||
Net cash used in operations | 989,000 | 1,156,000 | ||
Cash | 212,000 | $ 549,000 | ||
Borrowing capacity | ||||
Stockholders equity | 11,047,000 | 17,068,000 | 13,189,000 | $ 18,181,000 |
Working capital | 9,668,000 | |||
Net sales | 1,775,000 | $ 4,190,000 | ||
Inventory write down | 0 | 0 | ||
Warranty reserve accrual | $ 600,000 | $ 600,000 | $ 600,000 | |
Sales to Telecommunications Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 71% | 95% | ||
Sales To International Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 6% | 27% | ||
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 | 49% | 49% | ||
Largest Customer Two [Member] | Accounts Payable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 9% | 10% | ||
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 | 25% | 27% | ||
Largest Receivable Accounts One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 70% | 69% | ||
Largest Receivable Accounts Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 10% | 16% | ||
Largest Vendors One [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 37% | 30% | ||
Largest Customer Three [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 5% | 5% | ||
International Sales [Member] | ||||
Product Information [Line Items] | ||||
Net sales | $ 99,000 | $ 1,125,000 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 4,494 | $ 4,494 |
Less: accumulated depreciation and amortization | (4,216) | (4,150) |
Property and equipment, net | 278 | 344 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 3,565 | 3,565 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | 71 | 71 |
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 | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 66 | $ 116 |
Depreciation expenses | $ 63 | $ 113 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - Nonrelated Party [Member] - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total Equipment Notes Payable | $ 40 | $ 64 |
Less Current Portion | 40 | 64 |
Notes Payable, Noncurrent portion |
NOTES PAYABLE, RELATED PARTY (D
NOTES PAYABLE, RELATED PARTY (Details Narrative) - Related Party [Member] - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Oct. 31, 2024 | May 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Notes payable | $ 257 | $ 257 | ||
Interest rate | 1% | |||
Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 25 | $ 180 | ||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt term | 5 years | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt term | 7 years |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - Equipment [Member] - Several Financing Agreements [Member] - Nonrelated Party [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Debt Instrument [Line Items] | |
Debt maturity | mature between September 2023 and July 2024 |
Monthly payments of principal and interest | $ 8 |
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) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Proceeds from lines of credit | $ 676,000 | $ 1,127,000 | ||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit | $ 7,500 | |||
Line of credit facility description | (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) 40% of the aggregate eligible inventory value of eligible inventory or (ii) $4.0 million, plus (c) up to $146 collateralized by certain equipment | |||
Line of credit facility, expiration date | Sep. 30, 2024 | |||
Line of credit | 4,914,000 | $ 4,238,000 | ||
Proceeds from lines of credit | 676,000 | |||
Line of credit facility, remaining borrowing capacity | $ 216,000 | |||
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 percentage | 9.75% | 9.75% | ||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | Standard Interest Rate [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate percentage | 3.75% | |||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | Inventory Interest Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate percentage | 10.75% | 10.75% | ||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | Inventory Interest Rate [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate percentage | 4.75% | |||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | Prime Rate [Member] | Standard Interest Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate percentage | 1.25% | |||
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | Prime Rate [Member] | Inventory Interest Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, interest rate percentage | 2.25% |
SCHEDULE OF RENT EXPENSE AND SU
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating Leases | ||
Operating lease cost | $ 282 | $ 212 |
Weighted average remaining lease term - operating leases (in years) | 2 years 2 months 12 days | 1 year 8 months 12 days |
Average discount rate - operating leases | 6.13% | 6.13% |
SCHEDULE OF RENT EXPENSE AND _2
SCHEDULE OF RENT EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating lease cost | $ 282 | $ 212 |
General and Administrative Expense [Member] | ||
Operating lease cost | 37 | 28 |
Cost of Sales [Member] | ||
Operating lease cost | $ 245 | $ 181 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Operating Leases | ||
Long-term right-of-use assets, net of accumulated amortization of $1,046 and $760, respectively | $ 2,530 | $ 2,818 |
Current portion of operating lease liabilities | 1,197 | 1,124 |
Noncurrent portion of operating lease liabilities | 1,537 | 1,856 |
Total operating lease liabilities | $ 2,734 | $ 2,980 |
SCHEDULE OF SUPPLEMENTAL BALA_2
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Operating Leases | ||
Accumulated amortization of right-of-use assets | $ 1,046 | $ 760 |
SCHEDULE OF MATURITIES OF LEASE
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Operating Leases | ||
2024 (remaining 9 months) | $ 968 | |
2025 | 1,446 | |
2026 | 496 | |
Total lease payments | 2,910 | |
Less: Imputed interest/present value discount | (176) | |
Present value of lease liabilities | $ 2,734 | $ 2,980 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 31, 2023 | Feb. 28, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Lessee, Lease, Description [Line Items] | ||||
Rent expense | $ 399 | $ 287 | ||
Lease One [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, expiration date | August 31, 2023 | February 28, 2023 | ||
Lease Two [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
lease payments, year one | 89 | |||
lease payments, year two | 111 | |||
lease payments, year three | 125 | |||
lease payments | 3,896 | |||
Operating lease, assets and liabilities | 3,578 | |||
Lease Three [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
lease payments | $ 25 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) | 3 Months Ended |
Mar. 31, 2024 $ / 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 ($) | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Jul. 08, 2016 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding options | 140,000 | 140,000 | |
Intrinsic value outstanding | $ 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] | |||
Exercise price | $ 4.84 | ||
Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Exercise price | $ 5.60 | ||
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 |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - shares | Mar. 31, 2024 | Dec. 31, 2023 | Nov. 09, 2023 | Jul. 07, 2020 |
Stock Warrants | ||||
Warrants outstanding | 0 | 0 | 24,122 | |
Exchange of warrants | 12,062 |
EMPLOYEE RETENTION CREDITS (Det
EMPLOYEE RETENTION CREDITS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Apr. 01, 2024 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | |||
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 Event [Member] | |||
Subsequent Event [Line Items] | |||
Employee retention credit receivable | $ 700 |