Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 15, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
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 $0.0001 per share | |
Trading Symbol | POLA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,949,550 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 119 | $ 211 |
Accounts receivable | 3,216 | 2,230 |
Inventories, net | 16,875 | 15,460 |
Prepaid expenses | 1,852 | 2,629 |
Employee retention credit receivable | 2,000 | 2,000 |
Income taxes receivable | 787 | 787 |
Total current assets | 24,849 | 23,317 |
Other assets: | ||
Operating lease right-of-use assets, net | 2,436 | 240 |
Property and equipment, net | 421 | 538 |
Deposits | 93 | 93 |
Total assets | 27,799 | 24,188 |
Current liabilities | ||
Accounts payable | 1,024 | 230 |
Customer deposits | 2,769 | 2,126 |
Accrued liabilities and other current liabilities | 1,256 | 1,231 |
Current portion of operating lease liabilities | 738 | 268 |
Current portion of notes payable | 172 | 211 |
Line of credit | 3,010 | 1,884 |
Total current liabilities | 8,969 | 5,950 |
Notes payable, net of current portion | 33 | 57 |
Operating lease liabilities, net of current portion | 1,729 | |
Total liabilities | 10,731 | 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 March 31, 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 | (20,224) | (19,111) |
Treasury Stock, at cost (17,477 shares) | (40) | (40) |
Total stockholders’ equity | 17,068 | 18,181 |
Total liabilities and stockholders’ equity | $ 27,799 | $ 24,188 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net Sales | $ 4,190 | $ 3,709 |
Cost of Sales | 3,435 | 2,804 |
Gross profit | 755 | 905 |
Operating Expenses | ||
Sales and marketing | 333 | 405 |
Research and development | 346 | 476 |
General and administrative | 1,111 | 1,131 |
Total operating expenses | 1,790 | 2,012 |
Loss from operations | (1,035) | (1,107) |
Other income (expenses) | ||
Interest expense and finance costs | (78) | (13) |
Other income (expense), net | ||
Total other income (expenses), net | (78) | (13) |
Net loss | $ (1,113) | $ (1,120) |
Net loss per share – basic and diluted | $ (0.09) | $ (0.10) |
Weighted average shares outstanding, basic and diluted | 12,949,550 | 12,788,203 |
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, 2021 | $ 1 | $ 36,816 | $ (13,527) | $ (40) | $ 23,250 |
Balance, shares at Dec. 31, 2021 | 12,805,680 | ||||
Net loss | (1,120) | (1,120) | |||
Balance at Mar. 31, 2022 | $ 1 | 36,816 | (14,647) | (40) | 22,130 |
Balance, shares at Mar. 31, 2022 | 12,805,680 | ||||
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 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (1,113) | $ (1,120) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 116 | 135 |
Changes in operating assets and liabilities | ||
Accounts receivable | (986) | 626 |
Inventories | (1,415) | (1,468) |
Prepaid expenses | 777 | 742 |
Operating lease right-of-use asset | 196 | 166 |
Accounts payable | 794 | 216 |
Customer deposits | 643 | 26 |
Accrued expenses and other current liabilities | 25 | 5 |
Operating lease liabilities | (193) | (175) |
Net cash used in operating activities | (1,156) | (847) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (8) | |
Net cash used in investing activities | (8) | |
Cash flows from financing activities: | ||
Proceeds from advances from credit facility | 1,127 | |
Repayment of notes payable | (63) | (60) |
Net cash provided by (used in) financing activities | 1,064 | (60) |
Decrease in cash and cash equivalents | (92) | (915) |
Cash and cash equivalents, beginning of period | 211 | 5,101 |
Cash and cash equivalents, end of period | 119 | 4,186 |
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, 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 three months ended March 31, 2023, the Company recorded a net loss of $ 1,113 1,156 Notwithstanding the net loss for the three months ended March 31, 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 March 31, 2023 financial statements are issued. As of March 31, 2023, the Company had a cash balance of $ 119 664 17,068 15,880 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 months ended March 31, 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. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Material estimates relate to the assumptions made in determining reserves for uncollectible receivables, inventory reserves and returns, impairment analysis of long-term assets, valuation allowance on deferred tax assets, income tax accruals, accruals for potential liabilities and warrant reserves and assumptions made in valuing equity instruments issued for services. Actual results may differ from those estimates. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). Substantially all of the Company’s revenue is derived from product sales. 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, 2023 and 2022. 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 Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) DC power systems $ 4,081 $ 3,617 Engineering & Tech Support Services 24 44 Accessories 85 48 Total net sales $ 4,190 $ 3,709 The following table shows the Company’s disaggregated net sales by customer type: Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) Telecom $ 3,988 $ 3,670 Government/Military 193 17 Marine — 14 Other (backup DC power to various industries ) 9 8 Total net sales $ 4,190 $ 3,709 The following tables shows the Company’s net sales by the respective geographical regions of our customers (in thousands): Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) United States $ 3,065 $ 3,670 Canada — 14 South Pacific Islands 1,120 — Japan — 1 Other Asia Pacific 5 24 Total net sales $ 4,190 $ 3,709 For the three months ended March 31, 2023, and 2022, international sales totaled $ 1,125 39 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, 2023, and the year ended December 31, 2022, there were no write-downs of inventory. As of March 31, 2023 and December 31, 2022, inventories consisted of the following: SCHEDULE OF INVENTORIES NET March 31, 2023 December 31, 2022 (unaudited) Raw materials $ 13,870 $ 12,277 Finished goods 3,005 3,183 Total Inventories $ 16,875 $ 15,460 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, 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 March 31, 2023 December 31, 2022 (unaudited) Balance at beginning of the period $ 600 $ 600 Payments (102 ) (508 ) Provision for warranties 102 508 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. Segments The Company operates in one segment for the manufacture and distribution of its products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements. Concentrations Cash Cash denominated in Australian Dollars with a U.S. Dollar equivalent of $ 11 8 20 23 Revenues. 49.5 26.7 90.2 95 99 22 1 Accounts receivable 77 11 At December 31, 2022, 90 Accounts payable 44% 6% 5% 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 March 31, 2023 March 31, 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. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Effective January 1, 2021, the Company early adopted ASU 2020-06 and that adoption did not have an impact on its financial statements and the related disclosures. 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 | 3 Months Ended |
Mar. 31, 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 March 31, 2023 December 31, 2022 (Unaudited) Production tooling, jigs, fixtures $ 71 $ 71 Shop equipment and machinery 3,371 3,371 Vehicles 177 177 Leasehold improvements 390 390 Office equipment 185 185 Software 106 106 Total property and equipment, cost 4,300 4,300 Less: accumulated depreciation and amortization (3,879 ) (3,762 ) Property and equipment, net $ 421 $ 538 Depreciation and amortization expense on property and equipment for the three months ended March 31, 2023 and 2022 was $ 116 135 113 130 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 3 – NOTES PAYABLE Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE March 31, 2023 December 31, 2022 (Unaudited) Total Equipment Notes Payable $ 205 $ 268 Less Current Portion 172 211 Notes Payable, long term $ 33 $ 57 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 years 5 years 1.9 6.9 22 |
LINE OF CREDIT
LINE OF CREDIT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 4 – LINE OF CREDIT Credit Facility Effective September 30, 2020, the Company entered into a Loan and Security Agreement ( as amended from time to time, the “Loan Agreement”) with Pinnacle Bank (“Pinnacle”). At March 31, 2023, the outstanding balance under the line of credit was $ 3,010 664 The Loan Agreement initially expired on September 30, 2022, and on November 3, 2022, the Loan Agreement was amended to expire on 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 4,000 Interest accrues on the daily balance at a rate of 1.25 3.75 2.25 4.75 Pinnacle may terminate the Loan Agreement, at any time upon sixty 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, 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 | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 5 – STOCK OPTIONS The following table summarizes stock option activity: SCHEDULE OF STOCK OPTION ACTIVITY Number of Weighted Average Options Exercise Price Outstanding, December 31, 2022 140,000 $ 5.22 Granted — — Exercised — — Outstanding, March 31, 2023 (unaudited) 140,000 $ 5.22 Exercisable, March 31, 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 December 31, 2022, 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, 2023 | |
Stock Warrants | |
STOCK WARRANTS | NOTE 6 – STOCK WARRANTS At March 31, 2023, warrant shares outstanding were as follows: SCHEDULE OF WARRANTS OUTSTANDING Number of Weighted Outstanding December 31, 2022 24,122 $ 3.13 Issued — — Exercised — — Outstanding, March 31, 2023 (unaudited) 24,122 $ 3.13 Exercisable, March 31, 2023 (unaudited) 24,122 $ 3.13 At December 31, 2022, the Company had outstanding warrants exercisable into 24,122 3.13 expire in July 2025. There was no |
DISTRIBUTION AGREEMENT WITH A R
DISTRIBUTION AGREEMENT WITH A RELATED ENTITY | 3 Months Ended |
Mar. 31, 2023 | |
Distribution Agreement With Related Entity | |
DISTRIBUTION AGREEMENT WITH A RELATED ENTITY | NOTE 7 – DISTRIBUTION AGREEMENT WITH A RELATED ENTITY On March 1, 2014, the Company entered into a subcontractor installer agreement with Smartgen Solutions, Inc. (“Smartgen”), a related entity. On January 2, 2022, we provided written notice to Smartgen to terminate all agreements between the two companies. The termination was effective January 31, 2022, accordingly during the three months ended March 31, 2023 and 2022, Smartgen did not perform any services for the Company. |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Operating Leases | |
OPERATING LEASES | NOTE 8 – OPERATING LEASES The Company has two operating lease agreements for its warehouse and office facilities. An amendment, dated January 31, 2023, to one of its operating leases that expired on February 28, 2023, extends that lease term for three years commencing March 1, 2023 through February 28, 2026. Lease payments total $ 2,596 58 74 84 2,392 The Company’s second operating lease expires in August 2023. Subsequent to March 31, 2023, in May 2023, the Company signed an amendment to the second lease extending the term to August 2026. Lease payments will total $ 1,304 31 37 41 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 March 31, 2023 Three Months March 31, 2022 Lease Cost Operating lease cost $ 212 $ 175 Operating lease cost (of which $ 28 184 25 150 $ 212 $ 175 Other Information Weighted average remaining lease term – operating leases (in years) 1.7 2.2 Average discount rate – operating leases 6.13 % 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 right-of-use assets, net of accumulated amortization of $ 2,340 2,577 $ 2,436 $ 240 Current portion of operating lease liabilities $ 738 $ 268 Noncurrent portion of operating lease liabilities 1,729 — Total operating lease liabilities $ 2,467 $ 268 Maturities of the Company’s lease liabilities are as follows (in thousands): SCHEDULE OF MATURITIES OF LEASE LIABILITIES Year Ending Operating Leases 2023 (remaining 9 months) 651 2024 858 2025 990 2026 168 Total lease payments 2,667 Less: Imputed interest/present value discount (200 ) Present value of lease liabilities $ 2,467 Rent expense for the three months ended March 31, 2023 and 2022 was $ 287 226 |
EMPLOYEE RETENTION CREDITS
EMPLOYEE RETENTION CREDITS | 3 Months Ended |
Mar. 31, 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 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 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 three months ended March 31, 2023, the Company recorded a net loss of $ 1,113 1,156 Notwithstanding the net loss for the three months ended March 31, 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 March 31, 2023 financial statements are issued. As of March 31, 2023, the Company had a cash balance of $ 119 664 17,068 15,880 |
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 months ended March 31, 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. |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Material estimates relate to the assumptions made in determining reserves for uncollectible receivables, inventory reserves and returns, impairment analysis of long-term assets, valuation allowance on deferred tax assets, income tax accruals, accruals for potential liabilities and warrant reserves and assumptions made in valuing equity instruments issued for services. Actual results may differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). Substantially all of the Company’s revenue is derived from product sales. 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, 2023 and 2022. 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 Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) DC power systems $ 4,081 $ 3,617 Engineering & Tech Support Services 24 44 Accessories 85 48 Total net sales $ 4,190 $ 3,709 The following table shows the Company’s disaggregated net sales by customer type: Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) Telecom $ 3,988 $ 3,670 Government/Military 193 17 Marine — 14 Other (backup DC power to various industries ) 9 8 Total net sales $ 4,190 $ 3,709 The following tables shows the Company’s net sales by the respective geographical regions of our customers (in thousands): Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) United States $ 3,065 $ 3,670 Canada — 14 South Pacific Islands 1,120 — Japan — 1 Other Asia Pacific 5 24 Total net sales $ 4,190 $ 3,709 For the three months ended March 31, 2023, and 2022, international sales totaled $ 1,125 39 |
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, 2023, and the year ended December 31, 2022, there were no write-downs of inventory. As of March 31, 2023 and December 31, 2022, inventories consisted of the following: SCHEDULE OF INVENTORIES NET March 31, 2023 December 31, 2022 (unaudited) Raw materials $ 13,870 $ 12,277 Finished goods 3,005 3,183 Total Inventories $ 16,875 $ 15,460 |
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, 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 March 31, 2023 December 31, 2022 (unaudited) Balance at beginning of the period $ 600 $ 600 Payments (102 ) (508 ) Provision for warranties 102 508 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. |
Segments | Segments The Company operates in one segment for the manufacture and distribution of its products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements. |
Concentrations | Concentrations Cash Cash denominated in Australian Dollars with a U.S. Dollar equivalent of $ 11 8 20 23 Revenues. 49.5 26.7 90.2 95 99 22 1 Accounts receivable 77 11 At December 31, 2022, 90 Accounts payable 44% 6% 5% 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 March 31, 2023 March 31, 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. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Effective January 1, 2021, the Company early adopted ASU 2020-06 and that adoption did not have an impact on its financial statements and the related disclosures. 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) | 3 Months Ended |
Mar. 31, 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 Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) DC power systems $ 4,081 $ 3,617 Engineering & Tech Support Services 24 44 Accessories 85 48 Total net sales $ 4,190 $ 3,709 The following table shows the Company’s disaggregated net sales by customer type: Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) Telecom $ 3,988 $ 3,670 Government/Military 193 17 Marine — 14 Other (backup DC power to various industries ) 9 8 Total net sales $ 4,190 $ 3,709 The following tables shows the Company’s net sales by the respective geographical regions of our customers (in thousands): Three months ended March 31, 2023 2022 (Unaudited) (Unaudited) United States $ 3,065 $ 3,670 Canada — 14 South Pacific Islands 1,120 — Japan — 1 Other Asia Pacific 5 24 Total net sales $ 4,190 $ 3,709 |
SCHEDULE OF INVENTORIES NET | As of March 31, 2023 and December 31, 2022, inventories consisted of the following: SCHEDULE OF INVENTORIES NET March 31, 2023 December 31, 2022 (unaudited) Raw materials $ 13,870 $ 12,277 Finished goods 3,005 3,183 Total Inventories $ 16,875 $ 15,460 |
SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY | SCHEDULE OF RECONCILIATION OF THE PRODUCT WARRANT LIABILITY Changes in estimates for warranties March 31, 2023 December 31, 2022 (unaudited) Balance at beginning of the period $ 600 $ 600 Payments (102 ) (508 ) Provision for warranties 102 508 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 March 31, 2023 March 31, 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) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT March 31, 2023 December 31, 2022 (Unaudited) Production tooling, jigs, fixtures $ 71 $ 71 Shop equipment and machinery 3,371 3,371 Vehicles 177 177 Leasehold improvements 390 390 Office equipment 185 185 Software 106 106 Total property and equipment, cost 4,300 4,300 Less: accumulated depreciation and amortization (3,879 ) (3,762 ) Property and equipment, net $ 421 $ 538 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF NOTES PAYABLE | Notes payable consist of the following: SCHEDULE OF NOTES PAYABLE March 31, 2023 December 31, 2022 (Unaudited) Total Equipment Notes Payable $ 205 $ 268 Less Current Portion 172 211 Notes Payable, long term $ 33 $ 57 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2022 140,000 $ 5.22 Granted — — Exercised — — Outstanding, March 31, 2023 (unaudited) 140,000 $ 5.22 Exercisable, March 31, 2023 (unaudited) 140,000 $ 5.22 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stock Warrants | |
SCHEDULE OF WARRANTS OUTSTANDING | At March 31, 2023, warrant shares outstanding were as follows: SCHEDULE OF WARRANTS OUTSTANDING Number of Weighted Outstanding December 31, 2022 24,122 $ 3.13 Issued — — Exercised — — Outstanding, March 31, 2023 (unaudited) 24,122 $ 3.13 Exercisable, March 31, 2023 (unaudited) 24,122 $ 3.13 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 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 Three Months March 31, 2023 Three Months March 31, 2022 Lease Cost Operating lease cost $ 212 $ 175 Operating lease cost (of which $ 28 184 25 150 $ 212 $ 175 Other Information Weighted average remaining lease term – operating leases (in years) 1.7 2.2 Average discount rate – operating leases 6.13 % 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 right-of-use assets, net of accumulated amortization of $ 2,340 2,577 $ 2,436 $ 240 Current portion of operating lease liabilities $ 738 $ 268 Noncurrent portion of operating lease liabilities 1,729 — Total operating lease liabilities $ 2,467 $ 268 |
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 9 months) 651 2024 858 2025 990 2026 168 Total lease payments 2,667 Less: Imputed interest/present value discount (200 ) Present value of lease liabilities $ 2,467 |
SCHEDULE OF DISAGGREGATED NET S
SCHEDULE OF DISAGGREGATED NET SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | $ 4,190 | $ 3,709 |
UNITED STATES | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 3,065 | 3,670 |
CANADA | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 14 | |
South Pacific Islands [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 1,120 | |
JAPAN | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 1 | |
Other Asia Pacific [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 5 | 24 |
Telecom [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 3,988 | 3,670 |
Government/Military [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 193 | 17 |
Marine [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 14 | |
Other [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 9 | 8 |
DC Power Systems [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 4,081 | 3,617 |
Engineering & Tech Support Services [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | 24 | 44 |
Accessories [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total net sales | $ 85 | $ 48 |
SCHEDULE OF INVENTORIES NET (De
SCHEDULE OF INVENTORIES NET (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 13,870 | $ 12,277 |
Finished goods | 3,005 | 3,183 |
Total Inventories | $ 16,875 | $ 15,460 |
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, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Balance at beginning of the period | $ 600 | $ 600 |
Payments | (102) | (508) |
Provision for warranties | 102 | 508 |
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, 2023 | Mar. 31, 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 | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||||
Net loss | $ 1,113 | $ 1,120 | ||
Net cash used in operations | 1,156 | 847 | ||
Cash and cash equivalents | 119 | $ 211 | ||
Line of credit | 664 | |||
Stockholders equity | 17,068 | 22,130 | 18,181 | $ 23,250 |
Working capital | 15,880 | |||
Net sales | 4,190 | $ 3,709 | ||
Warranty reserve accrual | $ 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 | 95% | 99% | ||
Largest Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 77% | 90% | ||
Largest Customer Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 11% | |||
Largest Vendor One [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 44% | 51% | ||
Largest Vendor Two [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 6% | 3% | ||
Largest Vendor Three [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk | 5% | 3% | ||
Romania, New Lei | ||||
Product Information [Line Items] | ||||
Cash | $ 20 | $ 23 | ||
International Sales [Member] | ||||
Product Information [Line Items] | ||||
Net sales | 1,125 | $ 39 | ||
AUSTRALIA | ||||
Product Information [Line Items] | ||||
Cash | 11 | $ 8 | ||
UNITED STATES | ||||
Product Information [Line Items] | ||||
Net sales | $ 3,065 | $ 3,670 | ||
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 | 49.50% | 90.20% | ||
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 | 22% | 1% | ||
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 | 26.70% |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, cost | $ 4,300 | $ 4,300 |
Less: accumulated depreciation and amortization | (3,879) | (3,762) |
Property and equipment, net | 421 | 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 | 3,371 | 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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 116 | $ 135 |
Depreciation expenses | $ 113 | $ 130 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Total Equipment Notes Payable | $ 205 | $ 268 |
Less Current Portion | 172 | 211 |
Notes Payable, long term | $ 33 | $ 57 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - Equipment [Member] - Several Financing Agreements [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |
Monthly payments | $ 22 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt term | 2 years |
Interest rate | 1.90% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt term | 5 years |
Interest rate | 6.90% |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Lines of credit outstanding | $ 3,010 | $ 1,884 |
Pinnacle Bank [Member] | Loan and Security Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Lines of credit outstanding | 3,010 | |
Line of credit remaining borrowing capacity | $ 664 | |
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 maximum | $ 4,000 | |
Line of credit facility, interest rate description | Interest accrues on the daily balance at a rate of 1.25% above the prime rate, but in no event less than 3.75% per annum | |
Line of credit facility, 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] | ||
Debt Instrument [Line Items] | ||
Line of credit facility, interest rate during period | 2.25% | |
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) | 3 Months Ended |
Mar. 31, 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 ($) | 3 Months Ended | ||
Mar. 31, 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) | 3 Months Ended |
Mar. 31, 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 ($) | 3 Months Ended | |
Mar. 31, 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 | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Leases | ||
Operating lease cost | $ 212 | $ 175 |
Weighted average remaining lease term - operating leases (in years) | 1 year 8 months 12 days | 2 years 2 months 12 days |
Average discount rate - operating leases | 6.13% | 3.75% |
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, 2023 | Mar. 31, 2022 | |
Operating lease cost | $ 212 | $ 175 |
General and Administrative Expense [Member] | ||
Operating lease cost | 28 | 25 |
Cost of Sales [Member] | ||
Operating lease cost | $ 184 | $ 150 |
SCHEDULE OF SUPPLEMENTAL BALANC
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Long-term right-of-use assets, net of accumulated amortization of $2,340 and $2,577, respectively | $ 2,436 | $ 240 |
Current portion of operating lease liabilities | 738 | 268 |
Noncurrent portion of operating lease liabilities | 1,729 | |
Total operating lease liabilities | $ 2,467 | $ 268 |
SCHEDULE OF SUPPLEMENTAL BALA_2
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Accumulated amortization of right-of-use assets | $ 2,340 | $ 2,577 |
SCHEDULE OF MATURITIES OF LEASE
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2023 (remaining 9 months) | $ 651 | |
2024 | 858 | |
2025 | 990 | |
2026 | 168 | |
Total lease payments | 2,667 | |
Less: Imputed interest/present value discount | (200) | |
Present value of lease liabilities | $ 2,467 | $ 268 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2023 | Apr. 15, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Subsequent Event [Line Items] | ||||
Lease payments | $ 2,596 | |||
Operating lease payments, remainder of fiscal year | 58 | |||
Operating lease payments, year one | 74 | |||
Operating lease payments, year two | 84 | |||
Operating lease payments, year three | 84 | |||
Initial recognition of operating lease right-of-use assets and operating lease liabilities | $ 2,392 | 2,392 | ||
Rent expense | $ 287 | $ 226 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Lease payments | $ 1,304 | |||
Operating lease payments, remainder of fiscal year | 31 | |||
Operating lease payments, year one | 37 | |||
Operating lease payments, year two | 41 | |||
Operating lease payments, year three | $ 41 |
EMPLOYEE RETENTION CREDITS (Det
EMPLOYEE RETENTION CREDITS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 31, 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 |