What changed in this filing

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Item 1. Business

2022-03-31 compared with 2021-03-31 · 734 added, 766 removed, 118 unchanged (93% of the section changed)

design, manufacture and sell direct current, or DC, power generators, renewable energy and cooling systems for applications primarily

in the telecommunications market and, to a lesser extent, in other markets, including military, electric vehicle charging and

residential and commercial power.

the telecommunications market, our DC power systems provide reliable and low-cost DC power to service applications that do not

have access to the utility grid (i.e., prime power applications) or have critical power needs and cannot be without power in the

event of utility grid failure (i.e., back-up power applications).

Within this market, we offer the following three configurations

of our DC power systems, with output power ranging from 5 kW to 30 kW:

base power systems .

Our basic system which is centered around a DC generator.

Applications include both prime power and

backup power.

hybrid power systems .

Our basic DC power system with added energy storage via lithium-ion or other battery chemistries.

design, manufacture, and sell DC power generators, renewable energy and cooling systems for applications primarily in the telecommunications

market and, to a lesser extent, in other markets, including military, electric vehicle, marine and industrial.

We are continuously diversifying

our customer base and are selling our products into non-telecommunication markets and applications at an increasing rate.

in customer diversity are reported in the financial section.

the various markets we service, our DC power systems provide reliable and low-cost DC power to service applications that do not

have access to the utility grid (i.e., prime power and mobile applications) or have critical power needs and cannot be without

power in the event of utility grid failure (i.e., back-up power applications).

It’s more efficient to build

power systems around the DC generator because it’s simpler to integrate with battery storage and solar photovoltaics which also operate

Many applications in communications, water pumping, lighting, vehicle and vessel propulsion, security systems operate on DC power

Many micro-grids and energy storage are DC based and use inverters to convert the DC to AC.

these various markets, we offer the following configurations of our DC power systems, with output power ranging from 5 kW to 50

power systems .

These stationary

systems integrate a DC generator and automated controls with remote monitoring, which are typically contained within an environmentally

regulated enclosure.

power systems .

These systems

incorporate lithium-ion batteries (or other advanced battery chemistries) with our proprietary battery management system into our

standard DC power systems.

solar hybrid power systems .

Our DC hybrid power system with added renewable energy (i.e., solar panels).

These stationary systems incorporate photovoltaic and other sources of renewable energy

into our DC hybrid power systems.

Mobile power systems.

These are very light

weight and compact power systems used for EV charging, robotics, communications, security.

DC power systems are available in diesel, natural gas, LPG / propane and renewable fuel formats, with diesel, natural gas and propane

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reincorporated in the State of Delaware.

Our internet website

address is https://polarpower.com/.

Our internet website address

is https://polarpower.com/.

Business Events

During 2020, as a result

of Covid-19, the telecommunications industry experienced a slowdown in construction activities due to disruptions in the global

supply chain of telecommunications related components, operational shutdowns and stay-at-home orders.

These disruptions

negatively affected our U.S.

Tier-1 telecommunications customers which, in turn, resulted in a significant reduction in our new

equipment orders and slow-down in shipments of existing orders.

As a result of these factors, we experienced a 64% decline

in net revenues in 2020 as compared to 2019.

During 2020, in response

to the decline in revenues from our Tier-1 telecommunications customers, we diversified our sales efforts to develop power

systems configured inside containers designed for installation in remote off-grid applications (i.e., in applications not involving

a connection to an electrical power grid).

During the fourth quarter of 2020, we began shipment of off-grid systems to

Tier-1 telecommunications providers.

We believe these systems can provide significant fuel efficiency for both backup and

prime power applications in remote areas in the U.S.

and globally.

Although our initial orders for these systems were from

U.S.-based Tier-1 telecommunications customers, we believe the market opportunity for these remote systems may be significant

in emerging markets such as Africa and Asia where over 60% of the telecommunications towers are connected to a bad-grid

or are completely off-grid.

The slowdown in sales

from our Tier-1 telecommunications customers during the first half of 2020 also led us to further diversify our sales efforts

to increase sales to the U.S.

military, international telecommunications customers and Tier-2 telecommunications customers in

During the second half of 2020, we experienced measurable success in our diversification strategy.

We anticipate

in 2021 our sales to new customers, combined with increased sales of new products introduced during 2020, will return

to pre-2020 historical sales levels.

The Covid-19 pandemic

has had a significant negative impact on our overall operations including revenues, productivity, gross margins and liquidity.

Management’s early focus on training, processes and procedures kept our infection rates to below 1% with no company-wide

COVID-19 spread.

Due to the slowdown in sales to our Tier-1 telecommunications customers, our sales mix changed to smaller

quantity custom orders.

Small custom orders with frequent line changeovers caused less process automation which,

in turn, led to higher labor costs and higher setup times.

Since 2016, we experienced high double-digit sales growth which

resulted in us making strategic investments to increase our production capacity to $50 million annual revenue through an increase

in plant space and the addition of automation equipment.

The unanticipated drop in sales during 2020 caused a disproportionate

distribution of fixed and semi-fixed overhead costs across much lower revenues.

During this period of lower sales, we invested

in cross training our direct labor force across diverse processes and equipment which will make our workforce more agile and

productive in the future.

In addition, during 2020, our sales force directed their efforts into additional markets

and regions to reduce customer and regional concentration.

During 2019, we developed

a lower emission solar hybrid power system which integrates solar energy storage with natural gas/LPG

(liquified-petroleum gas) powered generators that targets off-grid (i.e., areas where wireless towers are not connected to

an electrical grid) and bad-grid (i.e., areas where wireless towers are connected to an electrical grid that loses power more

than eight hours per day) DC power generation applications.

Our new product is equipped with a 90,000-hour lifecycle engine

which provides longer life, lower emissions and operating costs.

Certification of this product occurred in December

2019, when we received our certificate of conformity from the U.S.

Environmental Protection Agency, or the EPA, for our small

spark-ignition Toyota engines.

In the second half of 2020, we began shipments of our natural gas-powered DC power systems.

new product, equipped with our proprietary control systems, is designed for 24/7 prime power application providing

DC power outputs between 5 kW to 22 kW.

We expect that the bad-grid, off-grid markets, which include telecommunications

towers, commercial and residential backup, electric vehicle charging, “Mini-Grid”

and various others, will expand

the market for our natural gas/LPG product lines in both the U.S.

and in international markets.

We plan to develop new

configurations of DC power system, battery storage and solar to optimize the match between our solutions and various application

primarily operate within the telecommunications market and, to a lesser extent, in other markets, including military, electric

vehicle charging and residential and commercial power.

COVID-19 pandemic has negatively impacted business and industries all over the world since March 2020.

a key supplier to critical infrastructure projects, we have worked to maintain ongoing operations.

W e operate our business in

compliance with applicable state and local laws and are observing recommended public health and governmental authority guidelines to

minimize the risk of spreading the COVID-19 virus including implementing, where possible, safe-distancing, work-from-home procedures,

and additional sanitization efforts where facilities remain open to provide necessary services.

This allows us to continue to serve our

pandemic has resulted in temporary stay-at-home mandates, labor shortages, disruptions in the chain of supply, higher material costs,

travel restrictions, and postponement or cancellation of tradeshows and other marketing events.

These disruptions negatively affected

Tier-1 telecommunications customers which, in turn, resulted in a significant reduction in our new equipment orders and slow-down

in shipments in 2020.

2021, public health and governmental authorities have taken progressive action to help control the spread of COVID-19.

Currently, approximately

64% of the U.S.

population is considered fully vaccinated with the COVID-19 vaccine which was initially released to the general public

in December 2020.

In addition, several COVID-related shutdowns and restrictions have been lifted.

We believe these actions

have improved our customers’ ability to deploy new systems which resulted in an increase in our net sales during 2021.

We experienced

an 89% increase in net revenues in 2021 as compared to 2020.

2021, the implementation of 5G networks by Tier-1 telecommunication customers in the U.S.

has also resulted in a significant increase

in shipments of our DC power systems.

Our net sales to telecommunications customers in the U.S.

increased by 93% to $13.8 million in

2021 as compared to $7.1 million in 2020.

the pandemic, we focused on diversifying our sales efforts to increase sales to the U.S.

military, advanced mobility customers in the

U.S, and international telecommunications customers.

During the second half of 2020 and throughout 2021, we experienced measurable success

in our diversification strategy.

During this period, we received a $3.0 million purchase order from a new advanced mobility customer,

which we expect to start shipping in mid-year 2022.

During 2021, our shipments to military customers also increased to $798 as compared to $120 in 2020.

the three-year period prior to the pandemic, we experienced high double-digit sales growth which resulted in us making strategic investments

to increase our production capacity to $50 million annual revenue through an increase in plant space and the addition of automation equipment.

The unanticipated drop in sales during 2020 caused a disproportionate distribution of fixed and semi-fixed overhead costs across much

lower revenues.

During 2021, the increase in product shipments resulted in a decrease in our cost of sales as a percentage of total net

This was primarily because of improved labor efficiencies and increased absorption of manufacturing overhead resulting from higher

volume in net sales.

We believe our investments in state-of the-art equipment, additions to manufacturing plant space, and employee training

will continue to yield improvements in our gross margins as sales volumes continue to increase and as the economy normalizes from the

impact of the pandemic and other known and unknown factors affecting the global economy.

primarily operate within the telecommunications market and, to a lesser extent, in other markets, including military, electric vehicle

charging, marine and industrial.

We are continuously diversifying our customer base and are selling our products into non-telecommunication

markets and applications at an increasing rate.

Telecommunications

provide power generation equipment for the telecommunications markets.

Our equipment provides backup power to grid connected mobile

tower sites during power outages resulting from severe weather like hurricanes, wildfires and floods.

Most telecommunications

towers are equipped with battery backup for short term power outages.

Our DC power generators are installed to address longer-term

disruptions in power.

We also deliver products that provide prime power for off-grid telecommunications tower sites installed

in remote and rural areas where reliability of the power grid is suspect.

Since 2012, the telecommunications market is our largest

market segment and has contributed over 95% of our annual revenues.

Since 2012, we developed

products and configurations that target telecommunications applications with key features like high fuel efficiency, light weight

and compact design when compared to our competitors’

These features allow our telecommunications customers to

install equipment requiring a smaller footprint on building roof tops and compact commercial sites while also requiring

less fuel storage due to the fuel efficiency of our products.

In the past five years, we have gained approval and certifications

from four top Tier-1 telecommunications operators in the U.S.

With over 90% of the world’s telecommunication towers

located in non-U.S.

territories, we decided to establish international sales offices in Poland, Romania, Australia, Namibia, U.A.E.,

Australia and South Africa to provide long term growth.

In 2017, we began investments into international markets and have

recorded a steady increase in sales every year since.

In 2020, we delivered over hundred natural gas-powered DC power systems

to a leading Japanese telecommunications tower operator while delivering production quantities to a Tier-1 telecommunications

tower operator in Papua New Guinea.

95% of the telecommunications towers are connected to a power grid, thereby only requiring backup power generation in equipment

in case of an emergency loss of power, while in the emerging markets of Africa and Asia, a significant percentage of telecommunications

towers are not connected to the grid thereby requiring fuel-efficient prime power equipment to provide power by charging

the batteries.

Most prime power sites also require integration with solar and storage batteries to utilize renewable energy

during the day while generators and batteries provide power during nights and/or on cloudy days.

In the U.S., telecommunications

companies have focused their efforts on adding generators to provide backup power at existing sites, while in the international

market telecommunications companies are in expansion phase of adding new sites to the infrastructure to provide coverage in rural

and remote areas.

Our equipment provides backup power to grid connected mobile tower

sites during power outages resulting from severe weather like hurricanes, wildfires, and floods.

Most telecommunications towers are equipped

with battery backup for short term power outages.

Our DC power generators are installed to address longer-term disruptions in power.

We also deliver products that provide prime power for off-grid telecommunications tower sites installed in remote and rural areas where

reliability of the power grid is suspect.

Since 2012, the telecommunications market is our largest market segment and has contributed

over 87% of our annual revenues.

2012, we developed products and configurations that target telecommunications applications with key features like high fuel efficiency,

light weight and compact design when compared to our competitors’ products.

These features allow our telecommunications customers

to install equipment requiring a smaller footprint on building roof tops and compact commercial sites while also requiring less fuel

storage due to the fuel efficiency of our products.

In the past five years, we have gained approval and certifications from four top

Tier-1 telecommunications operators in the U.S.

With over 90% of the world’s telecommunication towers located in non-U.S.

territories, we decided to establish international sales offices in Poland, Romania, Australia, U.A.E., Dominican Republic and

South Africa to provide long term growth.

In 2017, we began investments into international markets and have recorded a steady increase

in sales every year since.

market, over 95% of the telecommunications towers are connected to a power grid, thereby only requiring backup power generation

in equipment in case of an emergency loss of power, while in the emerging markets of Africa and Asia, a significant percentage of telecommunications

towers are not connected to the grid thereby requiring fuel-efficient prime power equipment to provide power by charging the batteries.

Most prime power sites also require integration with solar and storage batteries to utilize renewable energy during the day while generators

and batteries provide power during nights and/or on cloudy days.

In the U.S., telecommunications companies have focused their efforts

on adding generators to provide backup power at existing sites, while in the international market telecommunications companies are in

expansion phase of adding new sites to the infrastructure to provide coverage in rural and remote areas.

2019, the telecommunications infrastructure in the U.S.

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the needs of average smart phone users.

However, the advent of 5G technology has resulted in a digital revolution within both

the commercial and consumer sectors leading to an exponential increase in data usage.

We believe that the need for backup power

equipment in the telecommunications services industry which consists of digital infrastructure (e.g., fiber, telecommunications

towers, active networks and data centers), operators (e.g., mobile and fixed broadband, data centers and cloud computing) and

applications (e.g., broadband connections, telephones, video streaming and e-commerce), holds promising growth opportunities as

5G use expands in the near and long term.

The next generation of

wireless network capabilities offer potential revolutionary applications far beyond smart phones and mobile devices.

The 5G mobile

network is intended to converge connectivity, intelligent edge and Internet of Things (IoT) technologies which is expected to

result in an increase in telecommunications tower sites in both the U.S.

In the near term, 5G will deliver

broadband-like services such as high-definition streaming video to a cell phone.

Businesses will benefit from using 5G for data

monitoring and cloud-native 5G networks to compute and store data locally.

All of these applications dramatically scale up data

usage which requires an increase in infrastructure and an increase in power and backup generators.

pervasiveness of 5G, including reliance by users on, among other things, local weather, traffic conditions, self-driving vehicles,

wearable health monitoring devices that automatically informs doctors, stores automatically ordering items sold on virtual carts,

farmers automated irrigation system with tracking sensors, will require robust backup equipment at telecommunications sites.

believe higher data usage will require higher reliability backup systems that are fuel efficient and are located in proximity

to the point of use.

In urban environments, roof-top space, weight of the equipment and the amount of fuel storage are critical

factors in the selection of backup equipment.

As one of the leading providers of DC power generation equipment, we have

demonstrated these benefits to telecommunications providers for decades and we are therefore encouraged with the prospect of infrastructure

expansion in this space that requires fuel efficient and lower emission power generation equipment.

However, the advent of 5G technology has resulted in a digital revolution within both the commercial

and consumer sectors leading to an exponential increase in data usage.

We believe that the need for backup power equipment in the telecommunications

services industry which consists of digital infrastructure (e.g., fiber, telecommunications towers, active networks and data centers),

operators (e.g., mobile and fixed broadband, data centers and cloud computing) and applications (e.g., broadband connections, telephones,

video streaming and e-commerce), holds promising growth opportunities as 5G use expands in the near and long term.

next generation of wireless network capabilities offer potential revolutionary applications far beyond smart phones and mobile devices.

The 5G mobile network is intended to converge connectivity, intelligent edge and Internet of Things (IoT) technologies which is expected

to result in an increase in telecommunications tower sites in both the U.S.

In the near term, 5G will deliver broadband-like

services such as high-definition streaming video to a cell phone.

Businesses will benefit from using 5G for data monitoring and cloud-native

5G networks to compute and store data locally.

All of these applications dramatically scale up data usage which requires an increase

in infrastructure and an increase in power and backup generators.

pervasiveness of 5G, including reliance by users on, among other things, local weather, traffic conditions, self-driving vehicles, wearable

health monitoring devices that automatically informs doctors, stores automatically ordering items sold on virtual carts, farmers automated

irrigation system with tracking sensors, will require robust backup equipment at telecommunications sites.

We believe higher data usage

will require higher reliability backup systems that are fuel efficient and are located in proximity to the point of use.

In urban environments,

roof-top space, weight of the equipment and the amount of fuel storage are critical factors in the selection of backup equipment.

one of the leading providers of DC power generation equipment, we have demonstrated these benefits to telecommunications providers for

decades and we are therefore encouraged with the prospect of infrastructure expansion in this space that requires fuel efficient and

lower emission power generation equipment.

1979, we have been developing and marketing products to the U.S.

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and international

The need for low voltage DC power generation systems are vital for military operations and commonly used to charge storage

batteries, provide backup emergency power, or provide startup power for aircrafts or weapon systems.

During the past decade, digitization

of the military accelerated exponentially to support modern information, communication, and weapon systems.

The need to process

information rapidly has led to digitization of command, control, communications, computers and intelligence across both combat

support and service support.

This expansion in data transfer and storage has led to an increase in energy needs, which requires

efficient power generation equipment that can charge batteries or directly power these systems.

digitized battlefield includes sensors, information processing, data distribution, electronic countermeasures, all requiring with

few exceptions, 28 volts DC or 48 volts energy at point of use.

The need for low voltage DC power generation systems are vital for military operations and commonly used to charge storage batteries,

provide backup emergency power, or provide startup power for aircrafts or weapon systems.

During the past decade, digitization of the

military accelerated exponentially to support modern information, communication, and weapon systems.

The need to process information

rapidly has led to digitization of command, control, communications, computers and intelligence across both combat support and service

This expansion in data transfer and storage has led to an increase in energy needs, which requires efficient power generation

equipment that can charge batteries or directly power these systems.

digitized battlefield includes sensors, information processing, data distribution, electronic countermeasures, all requiring with few

exceptions, 28 volts DC or 48 volts energy at point of use.

Our DC generators designed for military applications provide:

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2016, the military began the Advanced Medium Mobile Power Sources, or AMMPS, a U.S.

Department of Defense program to develop and

deliver 5 kW-60 kW output ranging generators in either a skid, trailer mounted, or microgrid configurations to replace legacy

standalone AC generators.

The new generation of mobile power generators combined with solar and wind power can function as sustainable

sources of DC and AC power in remote areas.

The new generation of AMMPS power systems are required to provide 21% higher fuel

efficiency, lower noise, weight, 90% reliability and be capable of performing in extreme environments.

During 2020, we directly

and jointly partnered with defense contractors, provided DC hybrid power systems, with integrated controls providing higher fuel

efficiency than legacy AC generators currently in use.

in sensors, navigation and communication technologies have led to increased integration of situational awareness systems that

allow all combat assets to communicate and coordinate both defensive and offensive efforts during combat.

In earlier combat vehicle

designs, these surveillance systems were powered by the main auxiliary vehicle battery, which required the vehicle’s main

engine to continue operating to power auxiliary battery systems.

A decade ago, we began delivering compact 3 kW –

DC auxiliary batteries to power these communication and reconnaissance systems thereby improving fuel efficiency of the combat

and vehicles when deployed.

During the decade we have delivered several configurations of these auxiliary power units to the military,

which vary in function from battery charging to supplying power to weapon systems.

During 2020, we were contacted

by a defense contractor to develop and deliver 50 kW high voltage power systems for auxiliary power use in military vehicles.

Department of Defense program to develop and deliver

5 kW-50 kW output ranging generators in either a skid, trailer mounted, or microgrid configurations to replace legacy standalone AC generators.

The new generation of mobile power generators combined with solar and wind power can function as sustainable sources of DC and AC power

in remote areas.

The new generation of AMMPS power systems are required to provide 21% higher fuel efficiency, lower noise, weight, 90%

reliability and be capable of performing in extreme environments.

During 2020, we directly and jointly partnered with defense contractors,

provided DC hybrid power systems, with integrated controls providing higher fuel efficiency than legacy AC generators currently in use.

in sensors, navigation and communication technologies have led to increased integration of situational awareness systems that allow all

combat assets to communicate and coordinate both defensive and offensive efforts during combat.

In earlier combat vehicle designs, these

surveillance systems were powered by the main auxiliary vehicle battery, which required the vehicle’s main engine to continue operating

to power auxiliary battery systems.

A decade ago, we began delivering compact 3 kW – 15 kW DC auxiliary batteries to power these

communication and reconnaissance systems thereby improving fuel efficiency of the combat and vehicles when deployed.

During the decade

we have delivered several configurations of these auxiliary power units to the military, which vary in function from battery charging

to supplying power to weapon systems.

We are currently in the process of development of next-generation higher output power DC power system.

After conclusion of the

testing of this higher power DC power system, we plan to introduce a configuration of this product to the residential and commercial

After conclusion of

the testing of this higher power DC power system, we plan to introduce a configuration of this product to the residential and commercial

microgrid market in emerging markets.

We believe 50 kW standalone DC power system, powered by natural gas or LPG would be

ideal for rural communities in emerging markets such as Africa and Asia.

The capacity of 50 kW is sufficiently large enough to

power a small rural hospital, dairy farm and a cluster of houses in a small village.

The ease of connecting our DC power system

with solar, battery packs or any other source of energy like wind can introduce a sustainable cost-effective solution in emerging

We believe 50 kW standalone DC power system, powered by natural gas or LPG would be ideal for rural

communities in emerging markets such as Africa and Asia.

The capacity of 50 kW is sufficiently large enough to power a small rural hospital,

dairy farm and a cluster of houses in a small village.

The ease of connecting our DC power system with solar, battery packs or any other

source of energy like wind can introduce a sustainable cost-effective solution in emerging markets.

50 kW generator will provide roadside emergency charging services for electric vehicles.

Vehicle Charging

to Frost & Sullivan, a leading market consulting firm, the electric vehicle market in the U.S.

will flourish over the next

The firm anticipates that due to upcoming incentives for electric vehicles the number of electric vehicles in the

will grow from 1.4 million in 2020 to 7.0 million in 2025.

This increase will require approximately 5.0 million additional

charging stations nationwide to support the cumulative growth of electric vehicles.

A 2018 article by McKinsey

& Company entitled “

The potential impact of electric vehicles on global energy systems ”

stated that although

a modest increase in electric vehicle sales of 5% will not lead to a shortage in electricity since most new capacity can be delivered

by renewables like solar, wind, and gas powered generation.

This modest increase in sales may have a significant impact on peak

loads, especially in concentration points of electric vehicle charging and during the evening peak times when most electric

vehicle users connect their vehicles for charging.

The report claims unmanaged peak load increases due to electric vehicle

charging will require increases in costly sub-station upgrades.

We believe that the more cost effective option

will be investing into battery storage at the utility level to manage the peak loads or flexible electricity costs for electric

vehicle charging in an effort to discourage peak load charging.

Regardless of how

the peak charging issue is resolved, most homes have not been designed to allow for fast charging of electric vehicles.

to Presedence Research, a market research company, the electric vehicle market is expected to register a compound annual growth rate

(CAGR) of 40.7% during the forecast period 2022 to 2027.

The firm estimates the global electric vehicle market at $7 billion USD in 2021

and is expected to reach $802.81 billion USD by 2027.

The primary growth factors driven by significant number of government incentives

such as tax rebates, subsidies, and grants.

This increase will require approximately 29 million additional charging stations globally

to support the cumulative growth of electric vehicles.

2018 article by McKinsey & Company entitled “ The potential impact of electric vehicles on global energy systems ”

stated that although a modest increase in electric vehicle sales of 5% will not lead to a shortage in electricity since most new capacity

can be delivered by renewables like solar, wind, and gas-powered generation.

This modest increase in sales may have a significant impact

on peak loads, especially in concentration points of electric vehicle charging and during the evening peak times when most electric vehicle

users connect their vehicles for charging.

The report claims unmanaged peak load increases due to electric vehicle charging will require

increases in costly sub-station upgrades.

We believe that the more cost-effective option will be investing into battery storage at the

utility level to manage the peak loads or flexible electricity costs for electric vehicle charging in an effort to discourage peak load

of how the peak charging issue is resolved, most homes have not been designed to allow for fast charging of electric vehicles.

to address this issue, in 2020 we completed the design of our natural gas-powered electric vehicle charger and backup generator.

Our electric vehicle chargers, being independent of the grid, are designed to automatically fast charge connected electric vehicles

at home on a daily basis while providing backup power during power outages.

In addition, the heat generated while charging

is captured and delivered to heat the home, heat water for laundry, or heat the pool.

electric vehicle chargers, being independent of the grid, are designed to automatically fast charge connected electric vehicles at home

on a daily basis while providing backup power during power outages.

In addition, the heat generated while charging is captured and delivered

to heat the home, heat water for laundry, or heat the pool.

Our electric vehicle charger

was initially designed in 2009 as a diesel-powered charger for roadside assistance and emergency services for most major automotive

manufacturers.

Our chargers were initially used by “AAA”

for roadside assistance to rapid charge stranded out

of charge vehicles.

In 2020, we improved this product by replacing the diesel engine with a heavy duty 90,000-hour lifetime

Toyota natural gas engine.

This product targets residential customers that own or are expected to own electric vehicles during

the next five years.

With the anticipated stress

on utility grids due to an increase in the number of electric vehicles that require charging, combined with the fact that

most homes are unable to provide fast charging, we believe that an independent natural gas-powered electric vehicle charger would

be ideal and cost effective.

was initially designed in 2009 as a diesel-fueled mobile charger for EV manufacturers to aid in testing their vehicles in the

We have supplied these mobile chargers to five of the leading automakers in the USA.

We are presently improving this

product by replacing the diesel engine with a heavy duty 60,000-hour plus lifetime Toyota natural gas or propane engine.

This product targets residential customers that own or are expected to own electric vehicles during the next five years.

the anticipated stress on utility grids due to an increase in the number of electric vehicles that require charging, combined with the

fact that most homes are unable to provide fast charging, we believe that an independent natural gas-powered electric vehicle charger

would be ideal and cost effective.

Currently, many electric vehicle owners exceed the base power usage at home resulting in peak hour

usage penalties which diminishes anticipated cost savings of using electric vehicles.

Our residential natural gas-powered EV

charger eliminates these costs while also providing backup power in case of emergencies.

benefits of fast charging with a natural gas generator, as opposed to using the electric grid, includes avoids peak rate charges,

a reduced carbon footprint and the opportunity to provide heating and air conditioning, through combined heat and power or CHP

systems that utilize waste heat from the generator/charger which we believe is a compelling market opportunity for our new product.

and Commercial Power –

Increased use of electricity

worldwide is directly related to humanity’s improvement in the quality of life.

Increased global urbanization has resulted

in many governments investing in power plants and providing infrastructure to satisfy the growing demand for electricity.

Similar needs of the rural populations have been largely ignored worldwide due to the isolation, low density and population spread

over vast areas resulting in an increased cost of infrastructure.

Even in rural areas where the infrastructure was built to deliver

electricity, frequent blackout and infrastructure failures are commonplace and often not repaired for long periods.

According to recent World

Bank data, 13% of the world’s population, approximately 950 million, still lack electricity compared to 25% in 1994.

47% of the world’s population still lives in rural areas, about 25% of those living in rural areas lack electricity.

954 million people live without electricity of which 547 million are located in Sub-Saharan Africa, 254 million

are located in South Asia, 71 million are located in East Asia, and 82 million in other areas.

the past decade, developments in renewable energy and battery storage have provided an alternate method to resolve this energy

inequity between rural and urban populations worldwide.

However, due to weather and costs of such systems and technologies are

still at an early stage of mass adoption.

We envision a hybrid system with natural gas or LPG integrated with a solar and battery

system to generate power during peaks and valleys of demand that we believe would be more cost effective and reliable than the

current systems in place.

These “Mini-Grid”

hybrid systems would generate between 5kW –

25kW of power on 24/7

basis and provide electricity for a small housing unit, commercial facility or a school building.

Our residential natural gas-powered EV charger

eliminates these costs while also providing backup power in case of emergencies.

benefits of fast charging with a natural gas generator, as opposed to using the electric grid, includes avoids peak rate charges, a reduced

carbon footprint and the opportunity to provide heating and air conditioning, through combined heat and power or CHP systems that utilize

waste heat from the generator/charger which we believe is a compelling market opportunity for our new product.

and Commercial Power – Mini-Grid

use of electricity worldwide is directly related to humanity’s improvement in the quality of life.

Increased global urbanization

has resulted in many governments investing in power plants and providing infrastructure to satisfy the growing demand for electricity.

Similar needs of the rural populations have been largely ignored worldwide due to the isolation, low density and population spread over

vast areas resulting in an increased cost of infrastructure.

Even in rural areas where the infrastructure was built to deliver electricity,

frequent blackout and infrastructure failures are commonplace and often not repaired for long periods.

to recent World Bank data, 13% of the world’s population, approximately 950 million, still lack electricity compared to 25% in

While 47% of the world’s population still lives in rural areas, about 25% of those living in rural areas lack electricity.

Globally, 954 million people live without electricity of which 547 million are located in Sub-Saharan Africa, 254 million are located

in South Asia, 71 million are located in East Asia, and 82 million in other areas.

the past decade, developments in renewable energy and battery storage have provided an alternate method to resolve this energy inequity

between rural and urban populations worldwide.

However, due to weather and costs of such systems and technologies are still at an early

stage of mass adoption.

We envision a hybrid system with natural gas or LPG integrated with a solar and battery system to generate power

during peaks and valleys of demand that we believe would be more cost effective and reliable than the current systems in place.

“Mini-Grid” hybrid systems would generate between 5kW – 25kW of power on 24/7 basis and provide electricity for a small

housing unit, commercial facility or a school building.

Mini-Grid system uses natural gas or LPG as primary fuel source, the same fuel as cooking fuel in rural and remote regions worldwide.

For decades, many governments have been allocating resources to eliminate solid fuels like wood, solid waste as cooking fuels

from rural and remote communities.

Significant progress has been made by providing economic subsidies for use of natural gas or

LPG as cooking fuel to reduce pollution.

In 2017, we established sales offices near the emerging growth countries of Namibia,

Australia and U.A.E.

setup to develop strategic alliances with distributors to promote our residential solutions to communities

living in bad-grid and off-grid areas.

For decades, many governments have been allocating resources to eliminate solid fuels like wood, solid waste as cooking fuels from rural

and remote communities.

Significant progress has been made by providing economic subsidies for use of natural gas or LPG as cooking fuel

to reduce pollution.

In 2017, we established sales offices near the emerging growth countries of Australia and U.A.E.

setup to develop

strategic alliances with distributors to promote our residential solutions to communities living in bad-grid and off-grid areas.

Competitive Strengths

have over a 30-year history and have developed a reputation as a proven supplier of reliable and advanced proprietary technology

products to customers within the telecommunications, military, commercial, industrial and marine markets.

We have invested significant

capital and engineering expertise to develop power generation systems that are environmentally friendly and fuel-efficient.

further believe our success will be based on the following key competitive strengths:

have over a 40-year history and have developed a reputation as a proven supplier of reliable and advanced proprietary technology products

to customers within the telecommunications, military, commercial, industrial and marine markets.

We have invested significant capital

and engineering expertise to develop power generation systems that are environmentally friendly and fuel-efficient.

We further believe

our success will be based on the following key competitive strengths:

Technologies.

Our decades of research and development has led to the development of DC power systems with output ranging

from 5 kW –

from 5 kW – 50 kW.

Our DC power systems integrates our proprietary DC alternator with electronic controls to monitor

and control the power being outputted to the equipment, which is then coupled to an engine assembly and cooling systems.

DC power system output voltage can be configured between 12 V –

600 VDC to match the precise application needs (e.g.,

telecom equipment, electric vehicle charger, etc.).

Over the past decades we have developed proprietary charge algorithms

for most commercially available batteries and match charge algorithms to battery model or chemistry prior to initiating a

charge cycle.

Unlike AC power systems, our DC power systems are directly connected to the battery source and therefore optimized

for safely charging a particular battery chemistry.

AC power systems are indirectly connected to a commercially available

unknown battery charger that converts the AC output to DC voltage.

The presence of inefficient or low-quality charger can

significantly lower charge efficiency of AC systems and may reduce battery life in some cases.

Over the past three decades we have strategically constructed a product portfolio that focuses on improving

energy efficiency by developing DC power output-based equipment where all major components and technologies are developed

in-house, and proprietary manufacturing processes created in-house to ensure product reliability and long life.

competitors approached the need for DC equipment in the telecom, military, and industrial markets by modifying legacy AC generators

with conversion equipment resulting in significantly lower efficiency when compared to DC power systems.

Being one of the

first companies to develop DC power systems, we developed proprietary components ranging from alternators, control systems

and charging algorithms for various battery chemistries.

We have focused on providing the lowest cost of ownership with demonstrated

long life of our equipment during the past thirty years.

Lowest cost of ownership is complemented with the best fuel economy,

best in class weather resistance provided by aluminum enclosures and customized algorithms matching battery chemistries and

operational profiles.

Manufacturing

Competitiveness.

We believe that our vertical integration approach to manufacturing lowers our production costs and

improves our overall operational efficiency.

In addition, vertically integrated manufacturing of our proprietary technologies

such as DC alternators, charge controls and battery management systems, provides us with a greater control and protection

over our intellectual property.

We believe our modular approach to manufacturing provides us with the lowest manufacturing

costs for our proprietary technologies while giving us the ability to deliver customized solutions to our Tier-1 wireless

telecommunications customers.

system output voltage can be configured between 12 V – 800 VDC to match the precise application needs (e.g., telecom

equipment, robotic propulsion drives, electric drives for marine vessels, electric vehicle chargers, etc.).

past decades we have developed proprietary charge algorithms for most commercially available batteries and match charge algorithms

to battery model or chemistry prior to initiating a charge cycle.

Unlike AC power systems, our DC power systems are directly connected

to the battery source and therefore optimized for efficiently and safely charging a particular battery chemistry.

systems are indirectly connected to commercially available battery chargers that convert the AC output to DC voltage making

it less efficient, higher in cost, and require considerably more space.

Over the past four decades we have strategically constructed a product portfolio that focuses on improving energy

efficiency by developing DC power output-based equipment where all major components and technologies are developed in-house, and

proprietary manufacturing processes created in-house to ensure product reliability and long life.

Our leading competitors approached

the need for DC equipment in the telecom, military, and industrial markets by modifying legacy AC generators with conversion equipment

resulting in significantly lower efficiency when compared to DC power systems.

Being one of the first companies to develop DC generators

for telecommunications, we developed proprietary components ranging from alternators, control systems and charging algorithms

for various battery chemistries.

We have focused on providing the lowest cost of ownership with demonstrated long life of our equipment

during the past thirty years.

Lowest cost of ownership is complemented with the best fuel economy, best in class weather resistance

provided by aluminum enclosures and customized algorithms matching battery chemistries and operational profiles.

Manufacturing Competitiveness.

We believe that our vertical integration approach to manufacturing lowers our production costs and improves our overall operational

In addition, vertically integrated manufacturing of our proprietary technologies such as DC alternators, charge controls

and battery management systems, provides us with a greater control and protection over our intellectual property.

We believe our

modular approach to manufacturing provides us with the lowest manufacturing costs for our proprietary technologies while giving us

the ability to deliver customized solutions to our Tier-1 wireless telecommunications customers.

Customer Base.

Our customer base consists of large telecommunications companies,

military sub-contractors and industrial companies.

Tier-1 telecommunications customers

have represented over 90% of our aggregated sales for the past five years.

demand of our products by telecommunications customers was primarily based on the need

to provide backup power during electricity outages.

While our competitors provided and

continue to provide legacy AC generators with DC conversion devices, we elected to invest

significant time and capital in the research and development of products with a lowest

Our customer base consists of large telecommunications companies, military sub-contractors and industrial

Tier-1 telecommunications customers have represented 62% to 91% of our aggregated sales for the past five years.

demand of our products by telecommunications customers was primarily based on the need to provide backup power during electricity

outages and for off grid remote locations.

While our competitors provided and continue to provide legacy AC generators with

DC conversion devices, we elected to invest significant time and capital in the research and development of products with a lowest

cost of ownership.

Certification of our products by Tier-1 telecommunications customers

is time intensive and takes upwards of three years of field trials to receive final product

This thorough approach to vendor selection reduces the number of vendors

selected by our telecommunications customers and has dramatically reduced the

number of competitors in the U.S.

Currently, a significant percentage of our

Certification of our products by Tier-1 telecommunications customers was time intensive and takes upwards

of three years of field trials to receive final product acceptance.

This thorough approach to vendor selection reduces the number

of vendors selected by our telecommunications customers and has dramatically reduced the number of competitors in the U.S.

Currently, a significant percentage of our U.S.

sales are to national Tier-1 telecommunications providers with multiple facilities.

In 2020, we diversified our sales efforts to include Tier-2 telecommunications customers,

off-grid remote area products and residential charging.

In the international markets,

our customers are regional Tier-1 telecommunications providers.

We have established sales

offices in emerging markets like Namibia, U.A.E., Australia, Poland and the Dominican

Our sales team directly markets to Tier-1 telecommunications companies in their

Since 2020, we increased our efforts to diversify our sales efforts to include Tier-2 telecommunications customers, off-grid remote

area products and residential charging.

In the international markets, our customers are regional Tier-1 telecommunications providers.

We have established sales offices in emerging markets like U.A.E., Australia, Poland and the Dominican Republic.

Our sales team directly

markets to Tier-1 telecommunications companies in their regions.

Management Team.

Our Chief Executive Officer and key engineers combined have over 100 years of engineering

and production experience in the design and manufacturing of power systems.

Our engineers have equipment design experience,

as well as hands-on skills to build prototypes.

A key factor demonstrating our management’s abilities and our engineering

aptitude can be found in our successful track record over the last 25 years of executing fixed-cost research, design and engineering

contracts, with an average of eight projects per year.

Our Chief Executive Officer and key engineers combined have over 100 years of engineering and production

experience in the design and manufacturing of power systems.

Our engineers have equipment design experience, as well as hands-on

skills to build prototypes.

A key factor demonstrating our management’s abilities and our engineering aptitude can be found

in our successful track record over the last 25 years of executing research, design and engineering contracts, with an average of

four projects per year.

the past three decades we have been promoting the use of DC power systems where DC power is the primary power in use.

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tower application is the largest user of DC power, in both grid and off-grid connected sites.

Furthermore, we believe that the

growth in wireless telecommunications infrastructure in the U.S.

and international markets has led to a rapid rise in the need

for DC backup power systems.

over 30 years of experience and reputation within the DC power systems market, we are working to increase awareness, availability

and affordability of more efficient DC-based products as a backup power and charging sources within the telecommunications industry.

Because of the increased power outages during emergencies and natural disasters, existing and new wireless installations need

to be upgraded to provide reliable operations during times of emergency.

Furthermore, we believe that the growth

in wireless telecommunications infrastructure in the U.S.

and international markets has led to a rapid rise in the need for DC backup

power systems.

over 40 years of experience and reputation within the DC power systems market, we are working to increase awareness, availability and

affordability of more efficient DC-based products as a backup power and charging sources within the telecommunications industry.

of the increased power outages during emergencies and natural disasters, existing and new wireless installations need to be upgraded

to provide reliable operations during times of emergency.

The primary elements of our business strategy include:

mobile telecommunications market.

We continue to invest capital into our sales and marketing efforts

to demonstrate our DC power systems to the top Tier-1 wireless telecommunications providers and more than 500 small wireless

and cable operators in the U.S.

We continue to invest capital into our sales and marketing efforts to demonstrate

our DC power systems to the top Tier-1 wireless telecommunications providers and more than 500 small wireless and cable operators

Our goal is to further diversify our customer base.

We believe the rapid transition towards

5G will result in an increase in demand for back-up power generators and that our new LPG / natural gas DC power systems will

allow us to better compete on an economic basis with our competitors that provide AC power systems.

We believe the rapid transition towards 5G will result in an increase

in demand for back-up power generators and that our new LPG / natural gas DC power systems will allow us to better compete on an

economic basis with our competitors that provide AC power systems.

global sales to bad-grid or off-grid markets.

The increase in telecommunications subscriber base in rural and

remote areas in emerging countries has increased the deployment of telecommunications sites in off-grid and bad-grid areas.

During 2020, approximately 83% of our DC power systems sales were to U.S.

telecommunications customers, which

we believe represents only 4.7% of the total global telecommunications market.

We believe that the lack of a stable electric

infrastructure in rural regions of many developing nations provides significant opportunity for our products in both off-grid

and bad-grid location.

During 2020, we demonstrated our products to several prospects in need of off-grid and/or bad-grid

solutions which resulted in several initial orders.

The increase in telecommunications subscriber base in rural and remote areas

in emerging countries has increased the deployment of telecommunications sites in off-grid and bad-grid areas.

During 2021, approximately

82% of our DC power systems sales were to U.S.

telecommunications customers, which we believe represents only 4.7% of the total global

telecommunications market.

We believe that the lack of a stable electric infrastructure in rural regions of many developing nations

provides significant opportunity for our products in both off-grid and bad-grid location.

During 2020, we demonstrated our products

to several prospects in need of off-grid and/or bad-grid solutions which resulted in several initial orders.

develop our new LPG and natural gas DC power systems.

With the increased growth in off-grid and bad-grid telecommunications

sites, emissions generated by telecommunications towers is beginning to be a major contributor of pollution and greenhouse

In 2019, we began the development of a lower emission LPG and natural gas DC power generator for use in rural off-grid

and bad-grid sites.

We initiated this development by partnering with world’s largest natural gas engine manufacturer,

Toyota Engines, located in Japan.

Subsequently, we integrated engine control systems utilizing control technology from Bosch,

located in Germany, and concluded by receiving certification from the EPA in December 2019 to sell our new product in all

50 states in the U.S.

Upon certification, we began marketing this low emission natural gas solution to telecommunications

customers worldwide and in the midst of the COVID-19 pandemic we secured several orders for natural gas configured backup

and prime power applications.

During 2020, we began shipments of our DC natural gas generators to several domestic and international

Tier-1 telecommunications customers.

In 2021, we plan to expand our sales and service network for our natural gas generators,

targeting residential and telecommunications customers in the U.S.

while also targeting Tier-1 telecommunications customers

in emerging nations with solar hybrid natural gas generators for off-grid markets.

sites, emissions generated by telecommunications towers is beginning to be a major contributor of pollution and greenhouse gases.

Since 2019, we have developed lower emission LPG and natural gas DC power generators for use in rural off-grid and bad-grid sites.

We initiated this development by partnering with world’s largest natural gas engine manufacturer, Toyota Engines, located in

Subsequently, we integrated engine control systems utilizing control technology from Bosch, located in Germany, and concluded

by receiving certification from the EPA in December 2019 to sell our new product in all 50 states in the U.S.

Upon certification,

we began marketing this low emission natural gas solution to telecommunications customers worldwide and in the midst of the COVID-19

pandemic we secured several orders for natural gas configured backup and prime power applications.

During 2020, we began shipments

of our DC natural gas generators to several domestic and international Tier-1 telecommunications customers.

In 2022, we plan to expand

our sales and service network for our natural gas generators, targeting residential and telecommunications customers in the U.S.

while also targeting Tier-1 telecommunications customers in emerging nations with solar hybrid natural gas generators for off-grid

renewable solar energy product offerings .

Developing regions like Africa, South East Asia and Latin America

lack an electric utility infrastructure to support the installation of grid connected telecommunications towers in remote areas.

Due to these challenges, telecommunications companies are installing hybrid power generation systems that consist of solar panels,

batteries and fossil fuel powered generators.

Installing fuel inefficient generators combined with solar and batteries without

any integration is proving to be cost prohibitive.

Several local government programs to subsidize the adoption of solar and battery

storage along with generators in off-grid telecommunications towers have failed due to lack of quality components and integration.

In 2020, we began demonstrating our hybrid systems using natural gas fuel powered generators integrated with solar and battery

We plan to conclude our testing in the first half of 2021, which we believe can then provide us the required credentials

to receive subsidies for our customers, thereby making us competitive in this marketplace.

1991, we began introducing DC power systems to provide backup and prime power for off-grid and bad-grid applications.

products were predominantly designed for military applications and used as auxiliary power for vehicles, tanks and radar sites.

In the late 1990s, we introduced our DC power systems for commercial applications like mobile telecommunications towers, solar

refrigerators and oil field applications.

1992, we developed our own proprietary DC alternator to improve system efficiency, reduce costs and lower weight.

Our design replaced

a conventional 4-pole, three-phase designs with a light weight, low cost 12-pole and 32-pole designs (i.e., designs containing

12 or 36 magnetic poles) incorporating either 6 or 3 phases (i.e., containing 6 or 3 power circuits).

Another unique aspect of

the design of our DC alternators is the elimination of bearings, internal wiring connections, and an exciter (i.e., a device which

supplies the magnetizing current to generate working flux) to provide a longer life cycle than conventional motor designs in the

2002, we introduced our 6200 PMHH alternator, which combines the attributes of homopolar alternator technology with a permanent

When mounted on an engine and operated at either a fixed or variable speed, the model 6200 PMHH generates a precise amount

of regulated voltage and current.

The DC output can then be used to power electronics or charge batteries.

2006, we introduced our next generation 8000 Series alternators designed for higher power and voltage applications, which features

our proprietary 32-pole permanent magnet alternator technology.

Developing regions like Africa, South East Asia and Latin America lack an electric

utility infrastructure to support the installation of grid connected telecommunications towers in remote areas.

Due to these challenges,

telecommunications companies are installing hybrid power generation systems that consist of solar panels, batteries and fossil fuel

powered generators.

Installing fuel inefficient generators combined with solar and batteries without any integration is proving to

be cost prohibitive.

Several local government programs to subsidize the adoption of solar and battery storage along with generators

in off-grid telecommunications towers have failed due to lack of quality components and integration.

We believe our hybrid systems

using natural gas fuel powered generators integrated with solar and battery storage offer an ideal solution for this market.

Starting in 1979, Polar began

manufacturing and exporting solar PV vaccine refrigerator/freezers as part of the WHO Cold Chain projects.

We developed solar refrigeration

and air conditioning systems that operated directly with DC batteries, along with solar photovoltaic charge controls.

Our DC power and

refrigeration technologies drew the attention of various military projects.

We manufactured packaged remote home power systems for Arizona

Public Service who in turn provided them to remote customers.

The use of remote home power systems drew our attention to the need for

DC generator sets.

In the early 1990’s,

we began introducing DC generators to provide backup and prime power for off-grid and bad-grid applications.

Our initial products

were predominantly designed for military applications and used as auxiliary power for vehicles, battlefield tanks and radar sites.

In the late 1990s, we introduced our DC power systems for commercial applications like mobile telecommunications towers, solar refrigerators

and oil field applications.

We introduced our 6200 PMHH

alternator, which combines the attributes of homopolar alternator technology with a permanent magnet.

When mounted on an engine and operated

at either a fixed or variable speed, the model 6200 PMHH generates a precise amount of regulated voltage and current.

The DC output can

then be used to power electronics or charge batteries.

We developed our own proprietary

DC alternator to improve system efficiency, reduce costs and lower weight.

Our design replaced a conventional 4-pole, three-phase designs

with a light weight, low cost 12-pole incorporating either 6 or 3 phases.

Another unique aspect of the design of our DC alternators is

the elimination of bearings, internal wiring connections, and an exciter (i.e., a device which supplies the magnetizing current to generate

working flux) to provide a longer life cycle than conventional motor designs in the marketplace.

2006, we introduced our next generation 8000 Series alternators designed for higher power and voltage applications, which features our

proprietary 32-pole permanent magnet alternator technology.

The 8000 Series offers high efficiency at a lower cost while integrating

our proprietary digital control system, Supra Controller™, that manages and optimizes alternator output.

Our Supra Controller™

our proprietary digital control system, Supra Controller™, that manages and optimizes alternator output.

Our Supra Controller™

networks all components via CAN bus communications and software and has the ability to control, analyze, monitor, record and communicate

all key system parameters to ensure efficiency, safety and reliability of the overall system.

The ability to remotely monitor

and calibrate each system parameter, receive system alarms and auto-reset the system when a fault is corrected are the key differentiating

factors of our DC power systems.

The ability to remotely monitor and calibrate

each system parameter, receive system alarms and auto-reset the system when a fault is corrected are the key differentiating factors

of our DC power systems.

telecommunications tower backup applications, backup generators are used to provide power during grid outages or to charge batteries

to provide longer run times during emergencies.

Due to battery costs and availability issues, many telecommunications providers

are known to use various types of chemistries or capacities as storage sources.

During the past decade, we have successfully integrated

various battery chemistry charge algorithms into our Supra Controller™

2011, we added charge algorithms for various lithium battery chemistries and integrated our proprietary battery management system,

or BMS, with our Supra Controller™

In 2013, we further expanded the integration of storage and renewable energy

such as solar and wind into our Supra Controller™

software resulting in the shipment of twenty off-grid telecommunications

tower power systems to Australia.

Due to battery costs and availability issues, many telecommunications providers are known

to use various types of chemistries or capacities as storage sources.

During the past decade, we have successfully integrated various

battery chemistry charge algorithms into our Supra Controller™ software.

2011, we added charge algorithms for various lithium battery chemistries and integrated our proprietary battery management system, or

BMS, with our Supra Controller™ software.

In 2013, we further expanded the integration of storage and renewable energy such as

solar and wind into our Supra Controller™ software resulting in the shipment of twenty off-grid telecommunications tower power

systems to Australia.

2017 and 2018, we demonstrated our DC hybrid power systems to telecommunications providers in South East Asia and Africa.

that the integration of renewable energy and storage batteries are ideal for off-grid remote locations in rural areas worldwide.

During 2021, we plan to continue our research and development efforts to further enhance these integrations for remote telecommunications

towers in South East Asia and Africa.

2018, we developed our next generation BMS that enhances our current technology to more accurately measure, monitor, control and

integrate battery performance data with our Supra Controller™.

In addition, we enhanced the user interface to allow us the

ability to update or develop new charging algorithms in the field which can be remotely programmed or uploaded.

We believe these

enhancements will increase our penetration into the storage market during 2021 and beyond.

2019, we developed a low-cost DC generator that runs on either natural gas or LPG.

In December 2019, we received our certificate

of conformity from the EPA on our small spark-ignition Toyota engines which are used in our new LPG / natural gas generators.

These new generators provide power outputs between 5 kW to 15 kW and incorporate a 30,000- to 90,000-hour life engine with our

proprietary control system.

We plan to market these stationary generators within the telecommunications, commercial and residential

markets primarily through third party distributors.

broadly classify our power systems into three categories:

base power systems .

Our basic system which is centered around a DC generator.

Applications include both prime power

and backup power.

hybrid power systems .

Our basic DC power system with added energy storage via lithium-ion or other battery chemistries.

Solar hybrid power systems .

Our DC hybrid power system with added renewable energy (i.e., solar panels).

DC power systems are available in diesel, natural gas, LPG, propane and renewable fuel formats, with diesel, natural gas and propane

gas being the predominant formats.

2022, we plan to continue our research and development efforts to further enhance these integrations for remote telecommunications towers

in South East Asia and Africa.

2018, we developed our next generation BMS that enhances our current technology to more accurately measure, monitor, control and integrate

battery performance data with our Supra Controller™.

In addition, we enhanced the user interface to allow us the ability to update

or develop new charging algorithms in the field which can be remotely programmed or uploaded.

2018, we introduced our Toyota natural gas / propane engine across our product line.

The Toyota product is a more advanced engine

used in heat pump applications.

We have negotiated a supply agreement with Toyota for the engine and with Bosch for the ignition control.

In December 2019, we received our certificate of conformity from the EPA.

These new generators provide power outputs between 5 kW

to 15 kW and incorporate a 60,000- to 90,000-hour life engine with our proprietary control system.

We are presently marketing

these stationary generators within the telecommunications, commercial and residential markets.

2021, we began development of a higher power natural gas-powered DC backup power system utilizing larger engines and improved emission

control systems.

The implementation of 5G networks by Tier-1 telecommunication customers currently have significantly higher power requirements

at cell sites than the previous 4G networks.

In addition, use of 5G technology in IoT, video streaming, and data analytics applications

requires cell sites to be operational 100% of the time which, in turn, increases the demand for reliable and fuel-efficient power generation

backup systems.

We believe increased power usage of 5G networks and higher fuel prices enhances market opportunities for our fuel-efficient

DC power systems as compared to lower efficiency AC power systems.

In March 2022, we received our EPA certification on

our 4Y Toyota engine, which is a larger engine model for used on our 20 to 30 kW DC power systems.

We believe being an approved supplier

for the three largest Tier-1 telecommunication providers in the U.S.

provides us with additional growth opportunities during the current

rapid 5G expansion in the largest urban centers in the U.S.

Base Power Systems

DC base power systems are designed for use in prime power and backup power applications.

All of our DC power systems are designed

to last 20 years or more in backup applications and meet all UL2200 standards.

To maximize operational life, we incorporate (over

and above our competition) the following:

All of our DC power systems are designed to

last 20 years or more in backup applications and meet all UL2200 standards.

To maximize operational life, we incorporate (over and above

our competition) the following:

aluminum, powder coated, enclosure with stainless hardware, which is lightweight and corrosion resistant;

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connectors in place of terminal strips and other non-sealed connectors;

proprietary Supra Controller™

modules that are environmentally sealed.

proprietary Supra Controller™ modules that are environmentally sealed.

believe that the number one reliability issue with a generator set is the failure to start.

To improve the reliability of our

generators, we remove the engine’s starting battery and replace it with a super capacitor.

The super capacitor has a 15-

to 20-year service life, greater cold cranking amps and withstands greater temperature extremes than conventional starting batteries.

reduce maintenance and help ensure that there is always adequate oil, we increase the engine’s oil capacity to provide for

a 3,000-hour (natural gas / propane) or 1,500-hour (diesel) maintenance interval.

Standard oil intervals for typical generators

range from 200 to 500 hours.

To improve the reliability of our generators,

we remove the engine’s starting battery and replace it with a super capacitor.

The super capacitor has a 15- to 20-year service

life, greater cold cranking amps and withstands greater temperature extremes than conventional starting batteries.

reduce maintenance and help ensure that there is always adequate oil, we increase the engine’s oil capacity to provide for a 4,300-hour

(natural gas / propane) or 1,500-hour (diesel) maintenance interval.

Standard oil intervals for typical generators range from 200

to 500 hours.

Hybrid Power Systems

most off-grid or bad-grid outdoor applications where DC loads are required, such as telecommunications towers in rural or remote

areas, fuel costs of operating a generator can account for more than 60% of the total operating costs.

most backup applications, such as telecommunications and uninterruptable power supply systems, lead acid batteries are used for

providing transitional power while the generator starts up.

In most of our prime power applications (including telecommunications)

the goal is to reduce maintenance and fuel costs.

Our Supra Controller™

automatically cycles the generator off when the

loads are small and cycles it on again when the load increases or the battery charge is depleted.

This cycling reduces engine

maintenance and saves significant quantities of fuel.

most off-grid or bad-grid outdoor applications where DC loads are required, such as telecommunications towers in rural or remote areas,

generator fuel cost can account for more than 60% of the total operating costs.

most backup applications, such as telecommunications and uninterruptable power supply systems, lead acid batteries are used for providing

transitional power prior to the backup generator start-up.

In most of our prime power applications (including telecommunications) the

goal is to reduce maintenance and fuel costs.

Our Supra Controller™ automatically cycles the generator off when the loads are small

and cycles it on again when the load increases or the battery charge is depleted.

This cycling reduces engine maintenance and saves significant

quantities of fuel.

fuel savings are realized by using lithium-ion batteries in place of lead acid batteries.

Lead acid batteries, when compared with

lithium-ion batteries, have high internal resistance, are inherently inefficient during charging or discharging in cyclic load

applications and therefore require longer to charge, resulting in higher fuel costs.

In 2011, we completed the design and testing

of a hybrid power system, where our DC power system was integrated with lithium-ion batteries to provide a longer life and higher

fuel efficiency to cyclic DC power applications such as telecommunications towers.

In 2019, we implemented our next generation

BMS for our lithium battery storage system.

This next generation BMS enhances battery charging accuracy, integrates with engine

controls and provides additional protection for the lithium batteries.

DC hybrid power systems can monitor the charge/discharge cycle of various battery chemistries, including lithium-ion and lead

acid batteries.

Our Supra Controller™

system incorporates a CAN bus communications capability that provides communication

and control between the battery and the DC hybrid power system.

Each cell in the battery pack is individually monitored for voltage

and temperature, ensuring the safety and longevity of the battery bank.

These power systems include enclosures, a lithium-ion

battery pack, our proprietary BMS and our proprietary Supra Controller™

system that controls engine output, battery charging

algorithms, cooling system and power control circuits that optimize DC load outputs.

Lead acid batteries, when compared with lithium-ion

batteries, have high internal resistance, are inherently inefficient during charging or discharging in cyclic load applications and therefore

require longer to charge, resulting in higher fuel costs.

In 2011, we completed the design and testing of a hybrid power system, where

our DC power system was integrated with lithium-ion batteries to provide a longer life and higher fuel efficiency for cyclic DC power

applications such as telecommunications towers.

In 2019, we implemented our next generation BMS for our lithium battery storage system.

This next generation BMS enhances battery charging accuracy, integrates with engine controls and provides additional protection for the

lithium batteries.

DC hybrid power systems can monitor the charge/discharge cycle of various battery chemistries, including lithium-ion and lead acid batteries.

Our Supra Controller™ system incorporates a CAN bus communications capability that provides communication and control between the

battery and the DC hybrid power system.

Each cell in the battery pack is individually monitored for voltage and temperature, ensuring

the safety and longevity of the battery bank.

These power systems include enclosures, a lithium-ion battery pack, our proprietary BMS

and our proprietary Supra Controller™ system that controls engine output, battery charging algorithms, cooling system and power

control circuits that optimize DC load outputs.

Solar Hybrid Power Systems

DC solar hybrid power system combines our DC hybrid power system with solar photovoltaic modules and a custom engineered multi

power point tracking charge controller.

In most off-grid or bad-grid outdoor applications, such as telecommunications towers in

rural or suburban areas, the fuel costs of operating a generator can account for more than half of the total operating costs.

We believe that incorporating renewable energy sources, such as solar, with our DC hybrid power systems is ideal solution for

numerous off-grid and bad-grid applications worldwide.

DC solar hybrid power system combines our DC hybrid power system with solar photovoltaic modules and a custom engineered multi power

point tracking charge controller.

In most off-grid or bad-grid outdoor applications, such as telecommunications towers in rural or suburban

areas, the fuel costs of operating a generator can account for more than half of the total operating costs.

We believe that incorporating

renewable energy sources, such as solar, with our DC hybrid power systems is ideal solution for numerous off-grid and bad-grid applications

Our DC solar hybrid power systems incorporate the following features:

power panel .

We produce distribution panel assemblies that make use of punched and plated buss bars to make the heavy

current connections between appliances.

The industry standard is using labor intensive hand crimped wires and lugs which are

accomplished in the field.

Our telecommunications customers request photovoltaic array structures to withstand winds of 150 mph and 200 mph

exceeding the industry standard of 120 mph.

We produce distribution panel assemblies that make use of punched and plated buss bars to make the heavy current

connections between appliances.

The industry standard is using labor intensive hand crimped wires and lugs which are accomplished

in the field.

Our telecommunications customers request photovoltaic array structures to withstand winds of 150 mph and 200 mph exceeding

the industry standard of 120 mph.

We provide an all-weather light-weight aluminum walk-in shelter that is easy to transport by truck or helicopter.

We provide the highest degree of lightning protection through the use of air-coil type inductors designed

We provide the highest degree of lightning protection through the use of air-coil type inductors designed by us.

Air-Conditioning .

We provide DC air-conditioning if required in very hot weather environments.

We also provide cooling systems using ambient

2019, we developed an environmentally friendly solar hybrid power system based on a combination of solar with LPG and propane

power sources which we believe lowers both capital expenditures and operating expenditures.

These new generators have been specifically

designed to run in residential applications and will provide power outputs between 5 kW to 22 kW and which incorporate a 30,000-

to 90,000-hour life engine with our proprietary control system.

Our natural gas generators when integrated with battery storage

and solar are ideal microgrids for off-grid and bad grid residential and commercial applications.

We also provide cooling systems using ambient air.

2019, we developed an environmentally friendly solar hybrid power system based on a combination of solar with LPG and propane power sources

which we believe lowers both capital expenditures and operating expenditures.

These new generators have been specifically designed to

run in residential applications and will provide power outputs between 5 kW to 22 kW and which incorporate a 30,000- to 90,000-hour life

engine with our proprietary control system.

Our natural gas generators when integrated with battery storage and solar are ideal microgrids

for off-grid and bad grid residential and commercial applications.

Network Management Tools

offer global network management services through our telematics tool, which consists of our Supra Controller™

integrated with monitoring software.

This hardware is integrated into each DC power system and collects critical data from the

equipment and transmits this data back to the customer and our service department.

This capability allows us and our customers

to monitor system performance remotely and to remotely update the equipment with new revision software in the field.

offer global network management services through our telematics tool, which consists of our Supra Controller™ technology integrated

with monitoring software.

This hardware is integrated into each DC power system and collects critical data from the equipment and transmits

this data back to the customer and our service department.

This capability allows us and our customers to monitor system performance

remotely and to remotely update the equipment with new revision software in the field.

telematics capabilities and services include:

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the functional status of the equipment and proactively schedule maintenance.

We believe these tools assist in reducing equipment

downtime, thereby reducing the overall cost of ownership.

In addition, we plan to use these tools to monitor and provide accurate

billing for our rental equipment deployed at customer facilities.

We believe these tools assist in reducing equipment downtime,

thereby reducing the overall cost of ownership.

In addition, we plan to use these tools to monitor and provide accurate billing for our

rental equipment deployed at customer facilities.

and Service Parts

offer extensive aftermarket and service parts programs.

We maintain an extensive inventory of aftermarket parts and sell parts

directly to customers or through our qualified network of service providers.

In addition, we require our regional service providers

to maintain sufficient quantities of aftermarket parts in their inventory to ensure minimum downtime upon product failure.

We maintain an extensive inventory of aftermarket parts and sell parts directly

to customers or through our qualified network of service providers.

In addition, we require our regional service providers to maintain

sufficient quantities of aftermarket parts in their inventory to ensure minimum downtime upon product failure.

maintain accurate records of bill of materials for each serial number shipped and service our products well beyond their recommended

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utilize a nationwide network of dealers and service providers to perform installation and warranty services for our customers.

Through our dealers we offer product commissioning as an added service to all our customers and require the purchase of such services

as a condition for acceptance of any warranty claims in the future.

We offer installation of the equipment, preliminary testing,

integration of equipment with other assets located at the site and introductory maintenance and safety training.

We offer various

levels of fee-based services to support our products in the field.

In addition, we have trained product and application engineers

that deliver high quality, responsive lifetime technical support to all our customers worldwide.

further support our customers by using qualified regional independent service providers to perform warranty and aftermarket service

and repair on our products.

Our regional service providers are factory trained and certified prior to being authorized to repair

or service our equipment.

our dealers we offer product commissioning as an added service to all our customers and require the purchase of such services as a condition

for acceptance of any warranty claims in the future.

We offer installation of the equipment, preliminary testing, integration of equipment

with other assets located at the site and introductory maintenance and safety training.

We offer various levels of fee-based services

to support our products in the field.

In addition, we have trained product and application engineers that deliver high quality, responsive

lifetime technical support to all our customers worldwide.

further support our customers by using qualified regional independent service providers to perform warranty and aftermarket service and

repair on our products.

Our regional service providers are factory trained and certified prior to being authorized to repair or service

our equipment.

We generally reimburse regional service providers for the warranty services they perform on our systems.

and Marketing

sales strategy focuses on using our direct sales force to market our DC backup power products to telecommunications providers

sales strategy focuses on using our direct sales force to market our DC backup power products to telecommunications providers in the

We use local regional sales managers in the U.S.

market to demonstrate our products to Tier-1 telecommunications providers.

Our products are purchased by regional centers operated by our telecommunications customers, thereby expanding our overall market

into regions we may not have covered previously.

products are purchased by regional centers operated by our telecommunications customers, thereby expanding our overall market into regions

we may not have covered previously.

have established a sales and service infrastructure in international markets.

We established regional sales offices in South Africa,

U.A.E., Poland and Dominican Republic and established sales and aftermarket service locations in Australia and Romania to locally

manage the South East Asia and EMEA regions, respectively.

Due to a general lack of a reliable power grid, many emerging markets

continue to expand their telecommunications infrastructures at a high rate.

We believe that this lack of a reliable power grid,

together with our knowledge of integrating renewables with generators, provides us with an opportunity to enter these emerging

markets with our hybrid storage and renewable energy solutions.

also market our products through our web site and by exhibiting our products at trade shows globally.

Our primary sales are generated

through product demonstrations and short-term rentals to demonstrate the capabilities of our products and value proposition to

large mobile network providers worldwide.

We believe this strategy of demonstrating our products and technologies to prospective

customers expedites the sales process for our DC power systems.

COVID-19 pandemic has taken a toll on the global economy and has disrupted business operations globally.

We market our products

to a large global customer base through actual product demonstrations.

In 2020, the spread of COVID-19 led to various government

travel restrictions which resulted in the inability of our sales team to meet with existing or new customers to demonstrate our

We established regional sales offices in Australia, U.A.E.,

Poland and Dominican Republic and established sales and aftermarket service locations in Australia and Romania to manage the South East

Asia and EMEA regions, respectively.

Due to a general lack of a reliable power grid, many emerging markets continue to expand their telecommunications

infrastructures at a high rate.

We believe that this lack of a reliable power grid, together with our knowledge of integrating renewables

with generators, provides us with an opportunity to enter these emerging markets with our hybrid storage and renewable energy solutions.

also market our products through our web site and by exhibiting our products at industry trade shows globally.

Our primary sales are

generated through product demonstrations and short-term rentals to demonstrate the capabilities of our products and value proposition

to large mobile network providers worldwide.

We believe this strategy of demonstrating our products and technologies to prospective customers

expedites the sales process for our DC power systems.

market our products to a large global customer base through actual product demonstrations.

In 2020, the spread of COVID-19 led to various

government travel restrictions which resulted in the inability of our sales team to meet with existing or new customers to demonstrate

our products.

In addition, our service staff and engineers have generally been unable to travel to customer locations to setup demonstrations

and assist in the integration and optimization of our products to specific customer application needs.

During the second half

of 2020 and early part of 2021,we have experienced a modest resumption of sales activity with our U.S.

Tier-1 telecommunications

customers as their construction activities resume.

Given the daily developments of the COVID-19 pandemic and the global responses

to curb its spread, we are not able to accurately estimate all of the long term effects of the COVID-19 pandemic on our business.

market our products through various distribution channels that promote our products and brand and provide effective aftermarket

support and service.

While most of our sales are achieved through our direct sales force, we also utilize independent service

providers and dealers to complement our global sales effort.

The promotion of our natural gas powered Mini-Grid product, targeting

off-grid and bad grid rural areas, will be undertaken by mainly certified independent dealers.

We believe expansion of our dealer

network will also provide additional opportunities for our DC power systems in the U.S.

and other countries.

During 2021, we have experienced

a modest resumption of sales activity with our U.S.

Tier-1 telecommunications customers as their construction activities resume.

the daily developments of the COVID-19 pandemic and the global responses to curb its spread, we are not able to accurately estimate all

of the long-term effects of the COVID-19 pandemic on our business.

service our products through various service partners that provide initial product installation and maintenance services.

The promotion

of our natural gas powered Mini-Grid product, targeting off-grid and bad grid rural areas, will be undertaken by certified independent

We believe expansion of our dealer network will also provide additional opportunities for our DC power systems in the U.S.

other countries.

utilize a combination of factory trained technicians and independent service providers to provide installation, maintenance, service

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the international markets, we utilize local service partners to perform installation and service on our equipment.

We have hired

trained personnel in Namibia, Australia and Romania to assist in regional training of technicians and also in product demonstrations.

the telecommunications power generation market, we compete with a few manufacturers of AC and DC generators that offer generators

with an output power of 6 kW to 30 kW.

market, our competitors are global manufacturers of AC generators designed

primarily for the residential and industrial off-grid power markets.

Internationally, our competitors include regional manufacturers

of both AC and DC generators.

market, our competitors are large volume manufacturers of AC generators with a primary focus on emergency power backup

generation for the residential marketplace.

These AC generators are constructed using steel enclosures and are therefore heavier

and can rust more easily in outdoor applications as compared to our products which generally have a smaller footprint and are

constructed using aluminum enclosures.

Due to the inherent design of AC motors, their units are approximately 40% larger in size

than our DC generators.

In order to monetize on our positives, we targeted telecommunications markets where generators are used

to provide backup power during power outages.

Due to the lighter weight and smaller size of our products as compared to AC products,

we specifically target customers with the telecommunications towers located on roof-tops in urban areas.

We believe that the smaller

size, lighter weight and higher fuel efficiency of our products are performance parameters that offset the lower price alternative

of AC generators.

In addition, we believe that our recently introduced long-life (90,000 hours), natural gas-powered DC generator

product line significantly increases our competitive advantage in densely populated urban markets.

We have hired trained

personnel in Australia, Romania, and South Africa to assist in regional training of technicians and also in product demonstrations.

the telecommunications power generation market, we compete with a few manufacturers of AC and DC generators that offer generators with

an output power of 5 kW to 50 kW.

market, our competitors are global manufacturers of AC generators designed primarily for

the residential and industrial off-grid power markets.

Internationally, our competitors include regional manufacturers of both AC and

DC generators.

market, our competitors are large volume manufacturers of AC generators with a primary focus on emergency power backup generation

for the residential marketplace.

These AC generators are constructed using steel enclosures and are therefore heavier and can rust more

easily in outdoor applications as compared to our products which generally have a smaller footprint and are constructed using aluminum

Due to the inherent design of AC motors, their units are approximately 40% larger in size than our DC generators.

to monetize on our positives, we targeted telecommunications markets where generators are used to provide backup power during power outages.

Due to the lighter weight and smaller size of our products as compared to AC products, we specifically target customers with the telecommunications

towers located on roof-tops in urban areas.

We believe that the smaller size, lighter weight and higher fuel efficiency of our products

are performance parameters that offset the lower price alternative of AC generators.

In addition, we believe that our recently introduced

long-life (90,000 hours), natural gas-powered DC generator product line significantly increases our competitive advantage in densely

populated urban markets.

digitization of our lives has resulted in the need for more power usage in both residential and commercial applications.

telecommunications tower market, the majority of the outdoor power needs are DC power since most components are DC powered.

Historically,

AC generator companies have utilized conversion technologies to convert AC output to DC output.

This conversion results in an

approximately 40% loss in energy.

Meanwhile, our DC generators supply DC power directly to the telecommunications tower systems

increasing the system’s overall efficiency.

These efficiencies are further enhanced in off-grid and bad-grid applications

where more power is being used from the generators due to the lack of grid power.

In the telecommunications

tower market, the majority of the outdoor power needs are DC power since most components are DC powered.

Historically, AC generator companies

have utilized conversion technologies to convert AC output to DC output.

This conversion results in an approximately 40% loss in energy.

Meanwhile, our DC generators supply DC power directly to the telecommunications tower systems increasing the system’s overall efficiency.

These efficiencies are further enhanced in off-grid and bad-grid applications where more power is being used from the generators due

to the lack of grid power.

are our primary competitors across these applications:

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Manufacturing

significant percentage of our business comes from multinational global corporations seeking configured product solutions ready

to be field deployed with a minimum installation time.

Our manufacturing process begins with our direct sales force and engineering

team defining customer application needs and concludes with the production of a custom configured product solution.

our ability to have total control over the sales and manufacturing process is a key competitive differentiator in the markets

implementing vertical integration throughout our manufacturing process, we believe that we reduce overall manufacturing costs,

thereby increasing profitability and market competitiveness.

Our production processes encompass all aspects of production of our

DC power systems, which includes alternators, aluminum enclosures, engine configurations, control electronics, cooling systems,

wiring harnesses, exhaust systems and final assembly.

Manufacturing of our proprietary technologies requires proprietary automated

equipment that ensures total control and agility in our production processes.

Over the past decade, we have made significant investments

in highly specialized manufacturing tooling, jigs and fixtures that allow us to manufacture products at lower cost while maintaining

the highest quality.

production assembly lines are designed to be flexible, and we utilize advanced manufacturing planning software to predict, monitor

and control demand levels and product mix to provide the shortest delivery time to our customers.

We utilize 3-D CAD software

to product design and document assembly instructions throughout our production process.

All our products are 100% tested to customer

specific application requirements prior to shipment.

our operations we utilize computerized ERP software that integrates all our processes from lead generation to product shipment

and aftermarket support.

Our focus on safety, quality and on-time delivery is supported by employee training and information systems

that monitor process and product quality and communicate trends and findings to senior management on a real-time basis.

significant percentage of our business comes from multinational global corporations seeking configured product solutions ready to be

field deployed with a minimum installation time.

Our manufacturing process begins with our direct sales force and engineering team defining

customer application needs and concludes with the production of a custom configured product solution.

We believe our ability to have

total control over the sales and manufacturing process is a key competitive differentiator in the markets we serve.

implementing vertical integration throughout our manufacturing process, we believe that we reduce overall manufacturing costs, thereby

increasing profitability and market competitiveness.

Our production processes encompass all aspects of production of our DC power systems,

which includes alternators, aluminum enclosures, engine configurations, control electronics, cooling systems, wiring harnesses, exhaust

systems and final assembly.

Manufacturing of our proprietary technologies requires proprietary automated equipment that ensures total

control and agility in our production processes.

Over the past decade, we have made significant investments in highly specialized manufacturing

tooling, jigs and fixtures that allow us to manufacture products at lower cost while maintaining the highest quality.

production assembly lines are designed to be flexible, and we utilize advanced manufacturing planning software to predict, monitor and

control demand levels and product mix to provide the shortest delivery time to our customers.

We utilize 3-D CAD software to product

design and document assembly instructions throughout our production process.

All our products are 100% tested to customer specific application

requirements prior to shipment.

our operations we utilize computerized ERP software that integrates all our processes from lead generation to product shipment and aftermarket

Our focus on safety, quality and on-time delivery is supported by employee training and information systems that monitor process

and product quality and communicate trends and findings to senior management on a real-time basis.

Engineering/Research and Development

research and development efforts are market driven and are focused on the development of new technologies and product improvements,

as well as reducing costs and improving product quality and reliability.

The primary focus of our research and development activities

is the development of lighter-weight, more compact and lower cost DC power generation systems for our Tier-1 wireless provider

customers in the U.S.

research and development efforts are market driven and are focused on the development of new technologies and product improvements, as

well as reducing costs and improving product quality and reliability.

The primary focus of our research and development activities is

the development of lighter-weight, more compact and lower cost DC power generation systems for our Tier-1 wireless provider customers

and international markets.

Over the years, we have expended significant resources in enhancing our system

controls like our Supra Controller™

significant part of our research and development effort has focused on the development of control software that integrates engine

controls, power management and battery algorithms to fully optimize fuel consumption in both prime power and backup power generation

applications.

We use a high level of integration with a single control and communication module, our Supra Controller™,

rather than competitive system designs with a number of independent control modules controlling a single function.

Our integrated

approach ensures software compatibility, reduces complexity in wiring, increases reliability and reduces cost.

We maintain an

in-house design, prototyping, testing and application engineering capabilities including expertise in 3-D solid modeling and finite

element analysis, computer-based modeling and testing, rapid prototyping, design verification testing and document publication,

which includes manufacturing assembly instructions, supplier drawings and product manuals.

In addition, we utilize third party

testing laboratories to certify our products’

compliance with current applicable UL standards.

research and development expenditures decreased by $553 to $1,723 during 2020, as compared to $2,276 in 2019.

This decrease in

research and development expenditures is primarily attributable to the negative impact of COVID-19 on resources such as labor

and materials.

We have implemented systems to monitor project status and utilize remote access and cloud-based systems to maintain

engineering efficiencies.

Our research and development efforts during 2020 primarily focused on launching our new LPG / natural

gas line of generators and hybrid power systems for off-grid and unreliable grid cell sites, and supporting existing sales activity

related to our DC back-up power systems.

During 2021, we expect research and development expenses to gradually increase as control

over COVID-19 improves and we continue investing into new products as part of our strategy to diversify our product lines.

it is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our ability

to continue our design engineering and research development projects during the remainder of 2021 and perhaps beyond.

possess a broad intellectual property portfolio comprised of electronics, software, engines, alternators, thermal systems and

production techniques.

Over the years, we have expended significant resources in enhancing our system controls like our

Supra Controller™ and BMS.

significant part of our research and development effort has focused on the development of control software that integrates engine controls,

power management and battery algorithms to fully optimize fuel consumption in both prime power and backup power generation applications.

We use a high level of integration with a single control and communication module, our Supra Controller™, rather than competitive

system designs with a number of independent control modules controlling a single function.

Our integrated approach ensures software compatibility,

reduces complexity in wiring, increases reliability and reduces cost.

We maintain an in-house design, prototyping, testing and application

engineering capabilities including expertise in 3-D solid modeling and finite element analysis, computer-based modeling and testing,

rapid prototyping, design verification testing and document publication, which includes manufacturing assembly instructions, supplier

drawings and product manuals.

In addition, we utilize third party testing laboratories to certify our products’ compliance with

current applicable UL standards.

research and development efforts are key to meeting customer demand and ever-changing power requirements.

In 2022, we plan to gradually

increase our team of engineers and continue investing into new product development as part of our strategy to diversify our product lines.

However, it is not possible for us to predict the duration or magnitude of the adverse results

of the outbreak and its effects on our ability to continue our design engineering and research development projects during the remainder

of 2022 and perhaps beyond.

possess a broad intellectual property portfolio comprised of electronics, software, engines, alternators, thermal systems and production

We rely on trademark, copyright and trade secret laws to protect our intellectual property.

we rely on common law rights to protect our “Polar Power, Inc.”

We protect our trade secrets and other

proprietary information by requiring confidentiality agreements from our employees, consultants and third parties that have access

to such information.

Despite these efforts, there can be no assurance that others will not gain access to our trade secrets, or

that we can meaningfully protect our technology.

In addition, effective trademark, copyright and trade secret protection may be

unavailable or limited in certain foreign countries.

consider our manufacturing process to be a trade secret and have non-disclosure agreements with our employees to protect the trade

secrets held by us.

However, such methods may not afford complete protection, and there can be no assurance that others will not

independently develop similar know-how or obtain access to our know-how and manufacturing concepts.

We may register patents and

trademarks in future to protect our intellectual property rights and enhance our competitive position.

attempt to mitigate the adverse effect of component shortages in our business through detail material planning and by qualifying

multiple vendor sources for key components and outside processes.

We conduct supplier audits of all major suppliers for initial

qualification and to ensure reliability, quality, and sustainability of critical components.

To meet our customer demands, we

forecast the supply of our long lead time items such as engines, castings and electronic components through use of sales forecasting

tools and ERP system.

Currently, we rely on common

law rights to protect our “Polar Power, Inc.” trade name.

We protect our trade secrets and other proprietary information

by requiring confidentiality agreements from our employees, consultants and third parties that have access to such information.

these efforts, there can be no assurance that others will not gain access to our trade secrets, or that we can meaningfully protect our

In addition, effective trademark, copyright and trade secret protection may be unavailable or limited in certain foreign

consider our manufacturing process to be a trade secret and have non-disclosure agreements with our employees to protect the trade secrets

However, such methods may not afford complete protection, and there can be no assurance that others will not independently

develop similar know-how or obtain access to our know-how and manufacturing concepts.

We may register patents and trademarks in future

to protect our intellectual property rights and enhance our competitive position.

attempt to mitigate the adverse effect of component shortages in our business through detail material planning and by qualifying multiple

vendor sources for key components and outside processes.

We conduct supplier audits of all major suppliers for initial qualification

and to ensure reliability, quality, and sustainability of critical components.

To meet our customer demands, we forecast the supply of

our long lead time items such as engines, castings and electronic components through use of sales forecasting tools and ERP system.

suppliers are extensively surveyed and audited;

and field or process generated non-conformities communicated with our Suppliers

to continuously improve quality.

To improve our costs and deliveries, our ERP system invites for all qualified suppliers to participate

in relevant bids to ensure best proposals are selected.

recent outbreak of COVID-19 has taken a toll on the global economy and has disrupted raw material supply chains all over the world.

During the first half of 2020, we experienced material shortages and delays while during the second half we experienced supplier

lead times returning to pre-COVID normal.

We are actively sourcing the domestic supply chain for key components to ensure no future

We anticipate modest price increases post pandemic, although we believe we can mitigate a portion of these anticipated

cost increases by passing through some cost increases to our customers while the other increases can be mitigated through increases

and field or process generated non-conformities communicated with our Suppliers to continuously

improve quality.

To improve our costs and deliveries, our ERP system invites for all qualified suppliers to participate in relevant bids

to ensure best proposals are selected.

outbreak of COVID-19 has taken a toll on the global economy and has disrupted raw material supply chains all over the world.

experienced material shortages and delays due to the pandemic;

What changed 10-K

Item 1. Business