What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-31 · 155 added, 100 removed, 749 unchanged (25% of the section changed)

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Related to Our Business and Industry

Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern.

year ended December 31, 2023, the Company recorded a net loss of $6,548 and used cash in operations of $3,430.

These factors raise substantial

doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are

In addition, the Company’s independent registered public accounting firm, in their report on the Company’s December

31, 2023, audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern.

ability to continue as a going concern is dependent upon our ability to obtain additional financing, drive further operating efficiencies,

reduce expenditures, and ultimately, create profitable operations Our ability to obtain additional financing in the debt and equity capital

markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect

to us and our industry.

The Company has taken action to improve its margins, and is continuing to build a strong back log, and expects

to continue investing in product development and sales and marketing activities.

In the event that the Company does not generate sufficient

cash flows from operations and is unable to obtain funding, the Company will be forced to delay, reduce, or eliminate some or all of

its discretionary spending, which could adversely affect the Company’s business prospects, ability to meet long-term liquidity

needs or ability to continue operations.

COVID-19 pandemic has had, and will likely continue to have, a significant negative impact on our business, sales, results of operations

and financial condition.

COVID-19 pandemic has had a widespread and detrimental effect on the global economy, particularly in the U.S., and actions over the past

three years by public health and governmental authorities, businesses, other organizations and individuals to address the outbreak, including

travel bans and restrictions, quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns

have materially negatively impacted, and could further materially adversely affect, our business, financial condition, results of operations

and cash flows.

The ultimate impact of the COVID-19 pandemic on our business and results of operations remains unknown and will depend

on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and potential resurgence

of the COVID-19 pandemic, repeat or cyclical outbreaks and any additional preventative and protective actions that governments, or we

or our customers, may direct, which may result in an extended period of continued business disruption and reduced operations.

Any resulting

financial impact cannot be reasonably estimated at this time, but we expect it will continue to have a material impact on our business,

financial condition and results of operations.

repercussions of the COVID-19 global pandemic has had and is likely to continue to have, a material and substantial adverse impact on

our results of operations, including a decrease in our sales and delays in sourcing raw materials from suppliers.

Our business is directly

dependent upon, and correlates closely with, the marketing levels and ongoing business activities of our existing customers and suppliers.

In the event of a continued economic downturn caused by the COVID-19 pandemic, we will likely experience a reduction in current projects,

longer sales and collection cycles, deferral or delay of purchase commitments for our DC power systems, a reduction in our manufacturing

productivity, higher than normal inventory levels, delay in receipt of raw materials, a reduction in the availability of qualified labor

and increased price competition, all of which could substantially adversely affect our results of operations including our earnings and

response to uncertainties associated with the COVID-19 pandemic, we have made certain modifications to our business, including modifications

to employee work locations, cancellation of certain marketing events and the implementation of a cost reduction program to reduce overhead.

During 2022, we kept following limited remote work policies for many employees, and the resources available to such employees may not

enable them to maintain the same level of productivity and efficiency.

Our increased reliance on remote access to our information systems

also increases our exposures to potential cybersecurity breaches.

We cannot provide any assurance that these actions, or any other mitigating

actions we may take, will help mitigate the impact of the COVID-19 pandemic on us.

we cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to the unprecedented

nature of the disruption to our operations and the unpredictability of the COVID-19 global pandemic.

As a consequence, our estimates

of the duration of the pandemic and the severity of the impact on our future earnings and cash flows could change and have a material

impact on our results of operations and financial condition.

In the event of a sustained market deterioration and continued declines

in net sales, we may need additional liquidity.

We cannot provide any assurance that we will be able to obtain additional sources of

financing or liquidity on acceptable terms, or at all.

ultimate duration and impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows is dependent

on future developments, the duration of the COVID-19 pandemic, including repeat or cyclical outbreaks, additional “waves”

or the spread of “variant” viruses and the related length of its impact on the global economy, which are uncertain and cannot

be predicted at this time.

Furthermore, the extent to which our mitigation efforts are successful, if at all, is not presently ascertainable.

However, we expect that our results of operations, including revenues, in future periods will continue to be adversely impacted by the

COVID-19 pandemic and its negative effects on global economic conditions and that, as a result of such effects, we may continue to be

adversely affected even after the COVID-19 pandemic has materially subsided.

COVID-19 pandemic has had a widespread and detrimental effect on the global economy, particularly in the U.S.

since 2020, but to a lesser

extent in 2023.

The repercussions of COVID-19 is likely to continue to have, a material and substantial adverse impact on our results

of operations, including a decrease in our sales and delays in sourcing raw materials from suppliers.

addition, COVID-19 adversely affected the economies and financial markets of many countries, which may affect our level of indebtedness,

our need to generate sufficient cash flows to service our indebtedness and our ability to comply with the covenants contained in the

agreements that govern our indebtedness.

In the event of a sustained market deterioration and continued declines in net sales, and other

repercussions of COVID-19, we may need additional liquidity.

The need for additional liquidity may also be affected by the federal government’s

potential failure to raise the debt ceiling or correct a prolonged banking or financial crisis.

Such disruptions may impact the broader

capital markets, and in turn, may impact our ability to access those markets.

We cannot provide any assurance that we will be able to

obtain additional sources of financing or liquidity on acceptable terms, or at all.

ultimate impact of the COVID-19 pandemic on our business and results of operations remains unknown and will depend on future developments,

which are highly uncertain and cannot be predicted with confidence, including the duration and potential resurgence of COVID-19, repeat

or cyclical outbreaks and any additional preventative and protective actions that governments, or we, or our customers, or our suppliers

may direct, which may result in an extended period of continued business disruption and reduced operations.

Any resulting financial impact

cannot be reasonably estimated at this time, but we expect it will continue to have a material impact on our business, financial condition

and results of operations.

inflation in the economies in which we operate may adversely affect our operating margins and our results of operation.

general, we believe that our results of operations are not dependent on moderate changes in the inflation rate.

Historically, we have

been able to manage the impacts of more significant changes in inflation rates through our customer relationships, customer agreements

that may provide for price increases and continued focus on improvements of operational productivity.

However, the current inflationary

environment has, we believe, has impacted the Company’s business in 2022 and 2023 and may continue to impact its business in 2024,

including as a result of increased energy costs, as well as increasing wages in the labor markets in which we compete.

Inflation could

continue to pressure our margins in future periods.

In addition, in response to the concerns over inflation risk in the broader U.S.

economy, the U.S.

Federal Reserve has been steadily increasing its benchmark interest rate since March 2022 and has signaled that additional

rate increases will continue in 2024.

It is possible that increases in interest rates may ultimately result in an economic recession,

which could have a material adverse impact on our business.

Adverse economic conditions resulting from inflationary pressures, U.S.

Reserve actions, geopolitical issues or otherwise are difficult to predict and may have a material adverse impact on our business, results

of operations and financial condition.

attacks and threats of war may impact all aspects of our operations, revenues, costs and stock price in unpredictable ways.

special military actions of the Russian Federation and its invasion of Ukraine and the resulting geopolitical uncertainty are likely

to continue to have a significant impact on the European Union, the United Kingdom and other countries, including the U.S.

that these military operations may expand beyond Ukraine may have a negative impact as well.

Significant increases in the price of oil

and natural gas have occurred and are likely to continue putting additional inflationary pressures on central banks, including Federal

Reserve System (the “FRB”).

It is expected that interest rate hikes already announced by the FRB will occur in 2023, but

the amount, timing, and frequency of such increases are not fully known at this time.

The Russian Federation has also threatened increased

cyberattacks as part of its actions which could affect us and our customers.

Additionally, the United States and European nations have

imposed very significant financial sanctions on the Russian Republic, including targeted sanctions on Russian banks and wealthy individuals

as well as halting certification of the Nord Stream 2 gas pipeline.

They have denied Russian banks access the Society for Worldwide Interbank

Financial Telecommunications or SWIFT which has slowed international trade and made such transactions costlier to accomplish which could

also negatively affect us and our customers.

In response to the Russian military actions, many businesses headquartered in the Eurozone

and the United States stopped doing business with Russia, which may negatively affect the profitability of those companies.

The international

turmoil has already had and may continue to have a negative impact on the stock market generally and, in turn, on our stock price.

full impact of the actions by the Russian Federation regarding Ukraine are not known at this time, but they could have a material adverse

impact on our business, financial condition, results of operations, and stock price.

impacts of war and other geopolitical events, including but not limited to Russia’s invasion of Ukraine and the

Hamas-Israel conflict and the resulting war, are difficult to predict.

The resulting geopolitical uncertainty are likely to

have a significant impact on the European Union, the United Kingdom and other countries, including the U.S.

The threat that these

military operations may expand beyond Ukraine, Israel, and the Gaza Strip may have a negative impact as well.

Significant increases

in the price of oil and natural gas have occurred and are likely to continue putting additional inflationary pressures on central

banks, including Federal Reserve System (the “FRB”).

It is possible that interest rate hikes by the

FRB will continue to occur in 2024, but the amount, timing, and frequency of such increases are not fully known at this time.

result of these conflicts, the threat of cyberattacks has increased which could affect banks in the U.S.

and their customers.

Additionally, the United States and European nations have imposed very significant financial sanctions on the Russian Federation,

including targeted sanctions on Russian banks and wealthy individuals as well as halting certification of the Nord Stream 2 gas

They have denied Russian banks access the Society for Worldwide Interbank Financial Telecommunications or SWIFT which is

expected to slow international trade and make such transactions costlier to accomplish which could also negatively affect banks in

and their customers.

In response to the Russian military actions, many businesses headquartered in the Eurozone and the

United States have stopped doing business with Russia, which may negatively affect the profitability of those companies.

international turmoil has already had and may continue to have a negative impact on the stock market generally and, in turn, on our

continuation or escalation of events like the war in Russia-Ukraine war or the Hamas-Israel conflict may also disrupt

business operations of our suppliers and/or customers, causing supply chain constraints or delayed spending by our customers.

impact of the such events are not known at this time, but they could have a material adverse impact on our business, financial condition,

results of operations, and stock price.

have incurred significant losses in the past and we may incur losses in the future, which may hamper our operations and impede us from

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have incurred significant losses in the past.

For the years ended December 31, 2022 and 2021, we incurred net losses of

approximately $5.6 million and $1.4 million, respectively.

For the year ended December 31, 2022, we incurred a gross profit of approximately

$2.3 million, and for the year ended December 31, 2021, we incurred a gross profit of approximately $3.4 million.

We may incur net and

gross losses in the future.

We expect to rely on cash on hand, cash, if any, generated from our operations, borrowing availability under

our line of credit and proceeds from our future financing activities, if any, to fund all of the cash requirements of our business.

For the years ended December 31, 2023 and 2022, we incurred net losses of approximately

$6.5 million and $5.6 million, respectively.

For the year ended December 31, 2023, we incurred a gross profit of approximately $0.7 million,

and for the year ended December 31, 2022, we incurred a gross profit of approximately $2.1 million.

We may incur net and gross losses

in the future.

We expect to rely on cash on hand, cash, if any, generated from our operations, borrowing availability under our line

of credit and proceeds from our future financing activities, if any, to fund all of the cash requirements of our business.

losses may hamper our operations and impede us from expanding our business.

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product development time before a customer agrees to purchase our DC power systems can be considerable.

Our process for developing an

integrated solution may require use of significant engineering resources, including design, prototyping, modeling, testing and application

The length of this cycle is influenced by many factors, including the difficulty of the technical specification and complexity

of the design and the customer’s procurement processes.

A significant period may elapse between our investment of time and resources

in designing and developing a product for a customer and receipt of revenue from sales of that product.

The length of this process, combined

with unanticipated delays in the development cycles and the effects of COVID-19 on our ability to demonstrate our products to current

and potential customers could materially affect our results of operations and financial conditions.

Our process for developing

an integrated solution may require use of significant engineering resources, including design, prototyping, modeling, testing and

application engineering.

The length of this cycle is influenced by many factors, including the difficulty of the technical

specification and complexity of the design and the customer’s procurement processes.

A significant period may elapse between

our investment of time and resources in designing and developing a product for a customer and receipt of revenue from sales of that

The length of this process, combined with unanticipated delays in the development cycles or delays in our ability to

demonstrate our products to current and potential customers could materially affect our results of operations and financial

do not have long-term commitments for significant revenues with most of our customers and may be unable to retain existing customers,

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or other reasons may significantly increase the timing of receipt of such materials and/or increase the material costs of our products.

For example, as a result of the COVID-19 pandemic, we are currently experiencing both delays in sourcing, and price increases of, certain

For example, as a result of the COVID-19 pandemic, we are experienced both delays in sourcing, and price increases of, certain

key components.

As a result of these delays, our standard eight-week delivery time has increased to fourteen weeks.

As a result of these delays, our standard eight-week delivery time increased to fourteen weeks.

In addition, if production

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number of factors, including:

impact of the COVID-19 pandemic on the global markets;

impact of a global crisis such as the COVID-19 pandemic on the global markets;

changing requirements and preferences of the potential customers in our markets;

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which may affect their willingness and ability to purchase our products, services and technologies.

Additionally, we are subject to laws,

regulations and other governmental actions instituted in response to the COVID-19 pandemic.

modification of existing laws and regulations or interpretations thereof or the adoption of future laws and regulations could adversely

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of the risks and challenges of conducting business internationally include:

impact of COVID-19 on the global markets and the power generation market within the international telecommunications markets;

impact of a global crisis such as a pandemic;/ on the global markets and the power generation market within the international telecommunications markets;

or preferences for domestic products or solutions, which could reduce demand for our products;

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to stockholders.

failure to satisfy certain listing requirements may result in our common stock being delisted from the Nasdaq Capital Market, which may

make it more difficult for our shareholders to sell shares of our common stock.

common stock is listed on Nasdaq.

Nasdaq has several quantitative and qualitative requirements companies must comply with to maintain

this listing, including a $1.00 minimum bid price per share (the “Bid Price Rule”).

On November 24, 2023, we received a deficiency

letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that our common stock

is subject to potential delisting from the Nasdaq because for a period of 30 consecutive business days, the bid price of our common stock

has closed below the minimum $1.00 per share requirement for continued inclusion under Nasdaq Marketplace Rule 5550(a)(2) (the “Bid

Price Rule”).

The Nasdaq deficiency letter has no immediate effect on the listing of our common stock, and our common stock continues

to trade on The Nasdaq Capital Market under the symbol “POLA” at this time.

Nasdaq notice indicated that, in accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we will be provided 180 calendar days, or until

May 22, 2024, to regain compliance.

If, at any time before May 22, 2024, the bid price of our common stock closes at $1.00 per share

or more for a minimum of 10 consecutive business days, Nasdaq staff will provide written notification that we have achieved compliance

with the Bid Price Rule.

we fail to regain compliance with the Bid Price Rule before May 22, 2024 but meet all of the other applicable standards for initial listing

on The Nasdaq Capital Market with the exception of the minimum bid price, then we may be eligible to have an additional 180 calendar

days, or until November 18, 2024, to regain compliance with the Bid Price Rule.

If we do not regain compliance with the Bid Price Rule

by the end of the compliance period (or the second compliance period, if applicable), our common stock will become subject to delisting.

In the event that we receive notice that our common stock is being delisted, the Nasdaq listing rules permit us to appeal a delisting

determination by Nasdaq to a hearings panel.

intend to monitor the closing bid price of our common stock and may, if appropriate, consider available options to regain compliance

with the Bid Price Rule, such as reverse stock split.

However, there can be no assurance that we will be able to regain compliance with

the Bid Price Rule or will otherwise be in compliance with other Nasdaq listing rules.

December 18, 2023, Peter Gross, a member of the Board of Directors of the Company, resigned as a member of the Board of Directors of

Gross, an independent director, served as a member of the audit committee, chair of the compensation committee and chair

of the nominating and corporate governance committee of the Board at the time of his resignation.

On January 5, 2024, the Company received

a notification letter from Nasdaq that due to Mr.

Gross’ resignation, the Company is no longer in compliance with Nasdaq Listing

Pursuant to Nasdaq Listing Rule 5605(c)(4), the Company is entitled to a cure period to regain compliance (i) until the earlier

of the Company’s next annual shareholders’ meeting or December 18, 2024;

or (ii) if the next annual shareholders’ meeting

is held before June 17, 2024, then the Company must evidence compliance no later than June 17, 2024.

Company intends to appoint an additional independent director to the Board and the committees prior to the end of the cure periods.

there can be no assurance that we will be able to regain compliance with Nasdaq Listing Rule 5605 or will otherwise be in compliance

with other Nasdaq listing rules.

the stock is delisted, we may trade on the over-the-counter market, or even in the pink sheets, which would significantly decrease the

liquidity of an investment in our common stock.

securities or industry analysts do not publish research or reports or publish inaccurate or unfavorable research or reports about our

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would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our

ability to incur additional debt and other operating restrictions that could adversely impact our

ability to conduct our business.

A failure to obtain adequate funds may cause us to curtail certain operational activities, including

sales and marketing, in order to reduce costs and sustain the business, and would have a material adverse effect on our business and

financial condition.

ability to incur additional debt and other operating restrictions that could adversely impact our ability to conduct our business.

failure to obtain adequate funds may cause us to curtail certain operational activities, including sales and marketing, in order to reduce

costs and sustain the business, and would have a material adverse effect on our business and financial condition.

our 2016 Omnibus Stock Incentive Plan, as amended, or 2016 Plan, we may grant equity awards covering up to 1,754,385 shares of our common

As of December 31, 2022, we had granted options to purchase an aggregate of 140,000 shares

of common stock and issued 161,347 shares of common stock as stock-based compensation to officers, employees and consultants under the

Sales of shares issued upon exercise of options or granted under our 2016 Plan may result in material dilution to our existing

stockholders, which could cause our share price to fall.

As of December 31, 2023, we had granted options to purchase an aggregate of 140,000 shares of common stock and issued 161,347

shares of common stock as stock-based compensation to officers, employees and consultants under the 2016 Plan.

Sales of shares issued

upon exercise of options or granted under our 2016 Plan may result in material dilution to our existing stockholders, which could cause

our share price to fall.

issuance of shares of preferred stock could adversely affect the market value of our common stock, dilute the voting power of common

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are offered a premium for their shares.

Staff Comments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors