POLA Polar Power, Inc. - 8-K

EX-99.1
2
ex99-1.htm
EX-99.1

Exhibit
99.1

Polar
Power Highlights Sharply Improved First Quarter 2026 Performance and Recent Operational Progress

GARDENA,
California - June 2, 2026 - Polar Power, Inc. (“Polar Power” or the “Company”) (NASDAQ: POLA),
a global provider of prime, backup and solar hybrid DC power solutions, today highlighted its financial results for its first quarter
ended March 31, 2026, which the Company disclosed by its quarterly report on Form 10-Q with the Securities and Exchange Commission on
May 20, 2026, and its recent operational progress. The quarter reflected substantial year-over-year gains in gross margin, operating
results, and balance sheet strength, supported by a $3.7 million sales order backlog as of March 31, 2026.

●

Gross
margin expanded to 65.7% from 18.6% in Q1 2025, approximately 41% including the benefit of
a one-time warranty reserve adjustment, and gross profit grew to $1.1 million compared to
$319,000 in Q1 2025;

●

Operating
expenses declined 22% from $1.4 million in Q1 2025 to $1.1 million in Q1 2026;

●

Net
loss narrowed 86% year-over-year to $176,000 in Q1 2026, compared to $1.2 million in Q1 2025;

●

Stockholders’
equity increased to $2.3 million and working capital turned positive at $2.1 million;

●

Reached
a settlement to continue operating at its Gardena headquarters at greatly reduced rent;

●

Close
to reaching stockholders’ equity compliance; intends to regain compliance within the
available cure period;

●

Continues
to reduce the outstanding balance on the Pinnacle Bank credit facility. As of May 30, 2026,
the balance was $3.2 million, supported by $1.2 million in receivables and $13.7 million
in inventory available as collateral, if needed; and

●

Sales
Backlog was $3.8 million as of May 30, 2026, which the Company anticipates fulfilling in
the coming months to further reduce debt.

FIRST
QUARTER 2026 FINANCIAL HIGHLIGHTS

(in thousands, except per share data)

Q1 2026

Q1 2025

Y/Y +/(-) Change

Net sales

$

1,728

$

1,723

-

Gross profit

$

1,135

$

320

255

%

Gross margin

65.7

%

18.6

%

47.1 pts

Total operating expenses

$

1,111

$

1,421

22

%

Income (loss) from operations

$

24

$

(1,101

)

102

%

Net loss

$

(178

)

$

(1,265

)

86

%

Net loss per share

$

(0.05

)

$

(0.50

)

90

%

n/m
= not meaningful. Q1 2026 gross margin and operating income included an approximately $0.45 million ($450 thousand) favorable warranty
reserve adjustment recorded after a reserve study; excluding this one-time item, gross margin was approximately 39.7%.

MANAGEMENT
COMMENTARY

“The
first quarter marked clear operating progress for Polar Power. We expanded gross margin to 65.7%, which includes one-time adjustment
in warranty reserve, an increase of approximately 41% when compared to the same period last year. We reduced operating expenses by 22%
and narrowed our net loss by 86% when compared to the same period last year.

Since
quarter-end, we have taken important steps to strengthen our operating and financial position. We entered into a new settlement agreement
with the landlord of our Gardena headquarters at 249 E. Gardena Blvd, enabling us to maintain operations at this facility for the next
twelve months while reducing our rent from $109,000 to $55,000 monthly rate. Our goal is to combine our three separate facilities into
one so we can increase our operating efficiency.

We
also remain focused on regaining compliance with Nasdaq Listing Rule 5550(b)(1) relating to stockholders’ equity within the applicable
cure period. As of March 31, 2026, stockholders’ equity increased to $2.3 million, compared with $144,000 as of December 31, 2025.
In parallel, we continue to expand our sales backlog, adding approximately $916,000 in new orders, approximately 73% of which were from
customers in the international telecom market.

On
May 21, 2026, we entered into a Restructuring, Implementation and Management Services Agreement with Mammoth Crest Capital, LLC (‘MCC’),
effective May 19, 2026. Under the Services Agreement, MCC is obligated to lead and oversee the execution of various operational, organizational,
governance, financial, and capital structure initiatives. We look forward to partnering with MCC and anticipate meaningful improvements
in operational efficiency as a result of this engagement.

While
meaningful challenges remain, we have been in business for 47 years and during this time we have had our ups and downs; we are executing
a focused plan to convert improving operating performance into a sustainable financial position,” said Arthur Sams, Founder, President
and Chief Executive Officer of Polar Power.

ABOUT
POLAR POWER

Gardena,
California-based Polar Power, Inc. (NASDAQ: POLA), is a technology company that designs, manufactures and sells direct current, or DC,
power systems, lithium battery powered hybrid solar systems for applications in the telecommunications market and, in other markets,
including military, EV charging, cogeneration, distributed power and uninterruptable power supply. Within the telecommunications market,
Polar Power’s systems provide reliable and low-cost energy for applications for off-grid and bad-grid applications with critical
power needs that cannot be without power in the event of utility grid failure.

For
more information, please visit www.polarpower.com. or follow Polar Power on www.linkedin.com/company/polar-power-inc/.

FORWARD-LOOKING
STATEMENTS

This
press release contains “forward-looking statements” within the meaning of the federal securities laws, including statements
regarding the Company’s operating trajectory, liquidity and financing plans, ability to continue as a going concern, ability to
satisfy its lease payment arrangement and maintain its facilities, ability to regain and maintain Nasdaq listing compliance, and strategic
priorities. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially,
including the Company’s substantial doubt about its ability to continue as a going concern, its limited cash and liquidity, the
risk of delisting from Nasdaq, customer and supplier concentration, the potential enforcement of remedies by its lender or landlords,
and the other risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2026. Forward-looking statements speak only as of the date hereof, and the Company
undertakes no obligation to update them except as required by law.

CONTACTS

Investor
Relations - Polar Power, Inc.

[email protected]
| (310) 830-9153

#
# #

POLAR
POWER, INC.

CONDENSED
BALANCE SHEETS

(in
thousands, except share and per share data)

March 31, 2026

December 31, 2025

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

27

$

200

Accounts receivable

1,511

330

Inventories

9,547

9,425

Prepaid expenses

78

76

Total current assets

11,163

10,031

Other assets:

Operating lease right-of-use assets

172

278

Property and equipment, net

112

128

Total assets

$

11,447

$

10,437

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable (includes $1,070 and $778 of rents payable)

$

2,617

$

2,506

Customer deposits

756

764

Accrued liabilities and other current liabilities

807

1,462

Line of credit

3,704

4,036

Notes payable-related party

611

612

Notes payable, current

365

438

Current portion of operating lease liabilities

197

475

Total current liabilities

9,057

10,293

Total liabilities

9,057

10,293

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, 3,642,656 shares issued and 3,640,159 shares outstanding on March 31, 2026, and 2,680,156 shares issued and 2,677,659 shares outstanding on December 31, 2025

-

-

Additional paid-in capital

42,077

39,653

Accumulated deficit

(39,647

)

(39,469

)

Treasury Stock, at cost (2,497 shares)

(40

)

(40

)

Total stockholders’ equity

2,390

144

Total liabilities and stockholders’ equity

$

11,447

$

10,437

POLAR
POWER, INC.

UNAUDITED
CONDENSED STATEMENTS OF OPERATIONS

(in
thousands, except share and per share data)

Three Months Ended March 31,

2026

2025

Net Sales

$

1,728

$

1,723

Cost of Sales

593

1,403

Gross profit

1,135

320

Operating Expenses

Sales and marketing

159

260

Research and development

169

160

General and administrative

783

1,001

Total operating expenses

1,111

1,421

Income (loss) from operations

24

(1,101

)

Other income (expenses)

Interest expense and finance costs

(202

)

(164

)

Total other income (expenses), net

(202

)

(164

)

Net loss

$

(178

)

$

(1,265

)

Net loss per share - basic and diluted

$

(0.05

)

$

(0.50

)

Weighted average shares outstanding, basic and diluted

3,477,937

2,510,669

POLAR
POWER, INC.

UNAUDITED
CONDENSED STATEMENTS OF CASH FLOW

(in
thousands)

Three Months Ended March 31,

2026

2025

Cash flows from operating activities:

Net loss

$

(178

)

$

(1,265

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

16

17

Changes in warranty liability reserve

(427

)

-

Changes in operating assets and liabilities

Accounts receivable

(1,181

)

466

Inventories

(122

)

(241

)

Prepaid expenses

(2

)

(21

)

Operating lease right-of-use asset

106

302

Accounts payable

111

309

Customer deposits

(8

)

151

Accrued expenses and other current liabilities

(228

)

17

Operating lease liabilities

(278

)

(319

)

Net cash used in operating activities

(2,191

)

(584

)

Cash flows from financing activities:

Net proceeds from issuance of common stock under ATM facility

2,424

-

Proceeds from notes payable-related party

-

163

Repayment of notes payable-related party

(1

)

-

Repayment of notes payable

(73

)

-

Repayment of advances from credit facility

(332

)

(9

)

Net cash provided by financing activities

2,018

154

Decrease in cash and cash equivalents

(173

)

(430

)

Cash and cash equivalents, beginning of period

200

498

Cash and cash equivalents, end of period

$

27

$

68

Supplemental Cash Flow Information:

Interest paid

$

169

$

188

Supplemental non-cash investing and financing activities:

Issuance of common stock to director for accrued fees

$

-

$

8