Polar Power(POLA) - 2025 Q3 - Quarterly Report

Financial Performance - Net sales for the three months ended September 30, 2025, were $1,273,000, a decrease from $4,914,000 in the same period of 2024, representing a decline of approximately 74%[15] - Gross profit for the three months ended September 30, 2025, was a loss of $2,260,000 compared to a profit of $1,424,000 in the same period of 2024[15] - The net loss for the three months ended September 30, 2025, was $4,085,000, compared to a net income of $13,000 in the same period of 2024[15] - For the nine months ended September 30, 2025, the company recorded a net loss of $5,621,000 compared to a net loss of $1,628,000 for the same period in 2024[25] - Revenue for the nine months ended September 30, 2025, was $5,704 million, a decrease from $11,348 million in 2024, representing a decline of approximately 50.3%[89] - The net loss for the nine months ended September 30, 2025, was $5,621 million, compared to a net loss of $1,628 million in 2024, indicating a significant increase in losses[89] Assets and Liabilities - Total current assets decreased to $11,822,000 as of September 30, 2025, down from $15,597,000 as of December 31, 2024, reflecting a decline of about 24%[13] - Total liabilities increased to $9,447,000 as of September 30, 2025, compared to $9,034,000 as of December 31, 2024, indicating a rise of approximately 5%[13] - Cash and cash equivalents were reported at $4,000 as of September 30, 2025, a significant decrease from $498,000 as of December 31, 2024[13] - The accumulated deficit as of September 30, 2025, was $35,957,000, up from $30,336,000 as of December 31, 2024[13] Operating Expenses - Operating expenses for the three months ended September 30, 2025, totaled $1,617,000, an increase from $1,384,000 in the same period of 2024[15] - Interest paid for the nine months ended September 30, 2025, was $606,000, compared to $598,000 for the same period in 2024[25] - Total interest expense, fees, and financing costs for the nine months ended September 30, 2025, were $497, down from $588 for the same period in 2024[75] Inventory and Impairments - The company reported an inventory write-down of $1,967,000 and an impairment of right-of-use assets and lease deposits totaling $455,000[25] - The Company recorded total impairment charges of $455 for the three and nine months ended September 30, 2025, including $347 related to right-of-use assets[79] - As of September 30, 2025, total inventories were $10,892 million, down from $12,893 million as of December 31, 2024[46] Customer and Sales Information - The largest customer accounted for 68% of total revenues for the nine months ended September 30, 2025, compared to 44% for the two largest customers in the same period of 2024[59] - For the three months ended September 30, 2025, sales to telecommunications customers accounted for 92% of total revenues[58] - International sales for the three months ended September 30, 2025, totaled $6 million, a significant drop from $470 million in 2024[42] - DC power systems sales for the three months ended September 30, 2025, were $898 million, a decline of 79% from $4,340 million in 2024[40] Future Outlook and Plans - The company anticipates an increase in tariffs on imported products, which may impact profitability and global sales[33] - The company is currently negotiating a payment plan for delinquent rent with its landlords, with a proposed settlement to pay the overdue rent by February 28, 2026[28] - The Company expects to receive $325 in purchase orders by December 15, 2025, which is critical for meeting its financial obligations[69] - The company has a backlog of $5,283 million, with 53% from telecommunications customers, 13% from military customers, 1% from marine customers, and 33% from EV mobile charger customers[93] - The company expects the majority of its backlog orders to ship within the next twelve months[93] Shareholder and Financing Activities - The company entered into an ATM sales agreement on October 6, 2025, allowing for the sale of shares up to an aggregate offering price of $2,382 million[90] - As of November 19, 2025, the company sold 147,144 shares at an average price of approximately $5.00, resulting in net proceeds of approximately $714 million after commissions[91] - The company received a purchase order for $1,700 million for fifty Mobile EV Chargers, scheduled for delivery in 2026 over a 12-month period[92] - In October 2025, the company received a $674 million contract from a military customer for compact, lightweight DC generators[91] Delinquencies and Financial Obligations - The Company is currently delinquent in $398 of past due rents as of September 30, 2025[80] - The Company has a delinquent balance of $29 related to unsecured property taxes as of September 30, 2025[69]