What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2024-04-01 compared with 2023-03-31 · 202 added, 182 removed, 218 unchanged (64% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

of our common stock trade on The Nasdaq Capital Market under the symbol “POLA.”

of March 31, 2023, we had 12,949,550 shares of common stock outstanding held of record by approximately 21 stockholders.

of April 1, 2024, we had 17,561,612 shares of common stock outstanding held of record by approximately 21 stockholders.

These holders

1 unchanged sentence

Sales of Unregistered Securities

Management Discussion and Analysis of Financial Condition and Results of Operations.

Discussion and Analysis of Financial Condition and Results of Operations.

should read the following discussion and analysis of our financial condition and results of operations together with our financial statements

8 unchanged sentences

and results for any interim period are not necessarily indicative of the results to be expected for the full year.

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 charging, marine and industrial.

We are continuously

diversifying our customer base.

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

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 charging, marine and

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

applications at an increasing rate.

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

1 unchanged sentence

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

the years ended December 31, 2022 and 2021, 96% and 89%, respectively, of our total net sales were within the telecommunications market.

In 2022, our two largest customers represented 66% and 23% of our total net sales, respectively, one being a Tier-1 telecommunications

customer in the U.S.

and one being a telecommunications customer outside the U.S.

In 2021, we had 67% of our total net sales derived

from our largest customer, which is a Tier-1 telecommunications customer in the U.S There was no other revenue from customers in excess

of 10% of total net sales in either period.

During those periods, the majority of our sales were of our DC base powers systems.

2022 and 2021, sales to international customers accounted for 25% and 8% of total revenue, respectively.

Sales to military customers

during 2022 and 2021 accounted for 1% and 6% of total revenues, respectively.

During 2022 and 2021, sales to other markets accounted

for 3% and 5% of total revenue, respectively.

Mobility applications require power to charge batteries and appliances within a vehicle.

Our DC power systems are smaller in size, lighter

in weight, and operate with greater efficiency than AC power systems, making our product ideal for these applications.

have supplied our DC generators to many automotive manufactures in support of their remote field testing of electric vehicles.

presently in development of natural gas CHP home chargers as a solution to many homes that are not able to support fast charging using

the electric grid.

We believe we can compete with the electric utility rates for home and office charging by using natural gas and making

use of surplus heat from the generator in certain bad grid and remote area applications.

Our DC mobile EV charging systems can operate

with diesel or propane and are ideal for emergency road service to rapid charge EV’s stranded without a charge.

Our DC mobile EV

charging systems offer convenience, faster charging, and lower cost than towing an EV on a flatbed to a charging station.

We have shipped

DC mobile EV charging systems used to extend range for specialty vehicles used in applications requiring low emissions.

Our DC mobile

EV charging systems provide direct charging to an electric vehicle’s battery.

also developed DC power systems for medium to large solar PV applications to provide energy service for irrigation, refrigerated storage

of meat and produce, and micro grid.

By combining the energy of solar PV and propane or natural gas, our DC power systems can provide

constant energy 24 hours a day without using expensive energy storage.

Propane or natural gas fueled DC power systems are connected in

parallel with the solar array (also a DC energy source) greatly simplifying the means of combining multiple energy sources.

is more efficient and lowers both the CAPEX and OPEX of the Solar systems by eliminating battery storage and / or connection to the grid.

Currently, the most popular technologies used in these applications are either grid power, diesel only, or a combination of grid and

solar with a large battery bank.

Our proposed technology is more environmentally friendly and lowers the cost of food processing.

we have sold a limited number of our DC power systems that are undergoing field trials.

expect that opportunities in the bad-grid (i.e., areas where wireless towers are connected to an electrical grid that loses power for

more than eight hours), and off-grid (i.e., areas where wireless towers are not connected to an electrical grid) applications, which

include telecommunications towers, commercial and residential backup power, electric vehicle charging, “mini-grid” and various

other power applications, will help to expand the market for our natural gas/LPG (propane) product lines domestically and internationally.

We plan to develop new configurations of DC power system, battery storage and solar products to optimize the match between our solutions

and various application needs.

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

9 unchanged sentences

power systems .

These stationary systems incorporate photovoltaic and other sources

of renewable energy into our DC hybrid power system.

These stationary systems incorporate photovoltaic and other sources of renewable energy into our DC hybrid

power system.

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

being the predominate formats.

the years ended December 31, 2023 and 2022, 95% and 96%, respectively, of our total net sales were within the telecommunications market.

In 2023, our two largest customers represented 50% and 18% of our total net sales, respectively, one being a Tier-1 telecommunications

customer in the U.S.

and one being a telecommunications customer outside the U.S.

In 2022, our two largest customers represented 66%

and 23% of our total net sales, respectively, one being a Tier-1 telecommunications customer in the U.S.

and one being a telecommunications

customer outside the U.S.

There was no other revenue from customers in excess of 10% of total net sales in either period.

periods, the majority of our sales were of our DC base powers systems.

During 2023 and 2022, sales to international customers accounted

for 21% and 25% of total revenue, respectively.

Sales to military customers during 2023 and 2022 accounted for 3% and 1% of total revenues,

respectively.

During 2023 and 2022, sales to the marine and other markets accounted for 2% and 3% of total revenue, respectively.

launched our prime power DC generators incorporating the Toyota 1KS engines optimized for propane, natural gas, and extremely long operational

We believe that with the increasing installation restrictions on small diesel engines along with their limited availability due

to stringent EPA regulations will force a change to natural gas and propane (LPG) generators.

LPG and natural gas are lower in cost than

diesel fuel in many areas throughout the world.

Our new LPG and natural gas generators will provide strong opportunities for growth and

diversification in line with our long-term plan.

also started deliveries of our Summit Series, 27 kW diesel fuel DC generators to the U.S.

5G telecommunications market.

Our US Tier-1

telecommunications customers are in the process of upgrading 15 kW and 20 kW generators to the 27 kW to meet the increased power requirements

the international level, we have several telecommunications customers in the south pacific region purchasing our DC generators to develop

the telecommunications infrastructure in this region.

We believe the implementation and ongoing development of 5G networks along with

programs to develop the telecommunications infrastructure in rural and underdeveloped countries will continue to fuel our growth in the

telecommunications market over the next five to ten years.

May 2023, we announced plans to expand our mobile offerings by upgrading our mobile CHAdeMO EV chargers to the universal combined charging

system standard to reach the mobile EV charging market.

Mobile EV chargers are used for emergency roadside service providing a fast-charging

solution for EVs that have run out of charge before reaching a stationary charging facility.

We also continue to market our DC generators for the military, advanced mobility and marine markets as part of our

ongoing customer diversification strategy.

The military’s increasing use of robotics, drones, and computerization in the field is

driving the demand for battery charging with DC generators.

Military sales are advantageous because of their long-term contracts and they

tend to cover the cost of product development.

Marine sales interest have increased significantly both domestically and overseas due to

the increased performance in comfort and fuel economy.

Also, there are increasing restrictions on the use of diesel and gasoline engines

in many lakes and waterways making way for our natural gas and propane operated generators.

Using natural gas and propane for home and

office charging for electric vehicle and forklifts is still a market under development.

Same is true for diesel mobile chargers for emergency

roadside assistance.

expect that opportunities in the bad-grid (i.e., areas where wireless towers are connected to an electrical grid that loses power for

more than eight hours), and off-grid (i.e., areas where wireless towers are not connected to an electrical grid) applications, which

include telecommunications towers, commercial and residential backup power, electric vehicle charging, “mini-grid” and various

other power applications, will help to expand the market for our natural gas/LPG (propane) product lines domestically and internationally.

We plan to develop new configurations of DC power system, battery storage and solar products to optimize the match between our solutions

and various application needs.

Accounting Policies

63 unchanged sentences

impact of inflation and changing prices during 2023 has not been significant on the financial condition or results of operations of our

Rapid changes in the global economy may cause significant spikes in inflation which may

have an impact in our financial condition during 2023 and beyond.

Because some of our contracts are at a fixed price, we face the risk

that cost overruns or inflation may exceed, erode or eliminate our expected profit margin, or cause us to record a loss on certain projects.

We are taking actions to manage the potential impacts of these matters and we will continue to assess the actual and expected impacts

and the need for further action.

Rapid changes in the global economy may cause significant spikes in inflation which may have an impact in our financial condition

during 2024 and beyond.

Because some of our contracts are at a fixed price, we face the risk that cost overruns or inflation may exceed,

erode or eliminate our expected profit margin, or cause us to record a loss on certain projects.

We are taking actions to manage the

potential impacts of these matters and we will continue to assess the actual and expected impacts and the need for further action.

of Recent Accounting Pronouncements

8 unchanged sentences

infrastructure.

shortages caused by COVID-19 and supply chain constraints that affected timely delivery of raw materials required to complete our DC

power systems resulted in approximately $3,500 of expected shipments to be postponed from 2022 to the first half of 2023.

2022, our international sales increased 211% to $3,983, as compared to $1,279 during 2021.

The increase in international sales is primarily

due to a new telecommunications customer in the South Pacific Islands.

the second half of 2023, we experienced a decrease in revenue due to unanticipated rescheduling of approximately $2.0 million in deliveries

to our largest telecommunications customers.

These orders remain part of our backlog as of December 31, 2023, and are expected to be

delivered to customers within the following two quarters.

During 2022 and to a lesser extent in 2023, supply chain constraints affected timely delivery of raw materials required

to complete our DC power systems.

We believe that the aftermath of the pandemic, inflation, the impacts of war and other recent geopolitical

events will be an ongoing challenge for years to come and to adapt will require us to further globalize our vendors, engineering, and

2023, our international sales were $3,216, or 21% of total net sales, as compared to $3,983, or 25%, during 2022.

sales backlog as of December 31, 2023, was $3,862, with 56% of that amount being attributable to our largest U.S.

telecommunications

customer, 16% represented purchases from other telecommunications customers in the U.S., 32 % represented

purchases from telecommunications customers outside the U.S., 1 % represented purchase from customers in the marine industry, 1%

represented purchases from customers in the military markets, and 3% represented purchases from customer in other markets.

customer, 4% represented purchases from other telecommunications customers in the U.S., 31% represented purchases from telecommunications

customers outside the U.S., 6% represented purchases from customers in the military markets, and 3% represented purchases from customer

in the marine industry.

During the first quarter of 2024, the Company received $5,400 in new purchase orders from customers for

its DC power systems.

Combined with open orders as of April 1, 2024, the Company has a total sales backlog of $7,700, which 40% of the

orders are from its largest telecommunications customer in the U.S., 50% from other telecommunications customers, 8% from customers in

military markets, and 2% from Marine, EV and other markets.

Of the $7,700 in the sales backlog, 36% of the orders are from customers

in international markets.

The Company expects to complete shipment of these orders within the next six to twelve months.

plan to continue to expand our customer base in all market segments.

25 unchanged sentences

Year Ended December 31,

of Net Revenues

Dollar Variance

Percentage Variance

Results as a Percentage of Net Revenues for the Year Ended December 31,

(Unfavorable)

Cost of sales

Cost of sales (includes inventory write-downs of $450 and $nil, respectively)

Sales and marketing expenses

4 unchanged sentences

Interest and finance costs

Gain from PPP loan forgiveness

Other income (expense), net

2 unchanged sentences

December 31, 2022.

During 2022 we experienced labor shortages caused by COVID-19 and delays in receiving key components as a result of

supply chain constraints.

revenue from telecommunications customers, accounted for 96% of total net sales during 2022 and 89% of total net sales during 2021.

largest customers during 2022 represented 66% and 23% of our total net sales, respectively, one being a U.S.

Tier-1 telecommunications

customer and one being a telecommunications customer outside the U.S.

In 2021, our largest customer, a Tier-1 telecommunications customer

in the U.S., represented 67% of our total net sales.

There was no other revenue from customers in excess of 10% of total net sales in

either period.

The decrease in net sales is attributable to a decrease in deliveries of our DC power generator to our largest telecommunications

customer in the U.S.

During the second half of 2023, our largest telecommunications customer asked us to postpone deliveries towards

the end of the year.

As of December 31, 2023, approximately $2.0 million in DC power generators that were scheduled to ship in 2023 remained

in our sales backlog.

During 2023, revenue from

telecommunications customers accounted for 95% of total net sales, as compared to 96% of total net sales during 2022.

largest customers represented 50% and 18% of our total net sales in 2023, as compared to 66% and 23% in 2022.

Our largest customer

in each year was a Tier-1 telecommunications customer in the U.S., and our second largest customer in each year was a

telecommunications customer outside the U.S.

There was no other revenue from customers in excess of 10% of total net sales in either

2023 and 2022, sales to international customers accounted for 21% and 25% of total revenue, respectively.

1 unchanged sentence

during 2023 and 2022 accounted for 3% and 1% of total revenues, respectively.

Sales to other markets during 2022 and 2021 accounted for

3% and 5% of total revenue, respectively.

Sales to marine and other markets during 2023 and 2022

accounted for 2% and 3% of total revenue, respectively.

Most of our sales were of our DC base powers systems during the two years.

Cost of sales increased by $667, or 5%, to $14,598 during 2023, compared to $13,931 during 2022.

Cost of sales as a percentage

of net sales increased from 79.6% in 2021 to 86.8% in 2022 as a result of a decrease in factory overhead absorption due to under-utilization

of the production capacity as a result of labor shortages and supply chain constraints.

We believe we will achieve significant reductions

in the cost of sales as a percentage of net sales as supply chain constraints decrease and production increases to normal levels.

cost of sales for 2021 includes a $1,300 credit to salaries and benefits expense related to the Employee Retention Credit (“ERC”),

a refundable tax credit recorded in accounts receivable.

The ERC assisted business owners and their employees by providing an incentive

to keep workers on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage.

We recognized a gross profit of $2,125 during 2022, as compared to a gross profit of $3,445 during 2021, which represents

a decrease in gross profit of $1,320 or 38%.

Cost of sales as a

percentage of net sales increased from 86.8% in 2022 to 95.5% in 2023.

During the second half of 2023, our largest

telecommunications customer requested that we postpone shipments of our DC power generators.

This resulted in under-utilization of

our production capacity and an increase in factory overhead absorption.

Cost of sales during 2023 includes an inventory write-down

of $450 to adjust inventory to net realizable value.

We believe we will achieve significant reductions in the cost of sales as a

percentage of net sales in the upcoming quarters as we ship orders accumulated in our sales backlog.

We recognized a gross profit of $695 during 2023, as compared to a gross profit of $2,125 during 2022, which represents a

decrease in gross profit of $1,430 or 67%.

Gross profit as a percentage of net sales decreased to 4.5% in 2023, as compared to 13.2%

The decrease in gross profit during 2022 was primarily attributable to a decrease in factory

overhead absorption resulting from lower sales primarily during the third quarter of 2022.

The decrease in gross profit during 2023 was primarily attributable to a decrease in factory overhead absorption resulting from

lower sales primarily during the second half of 2023 and an inventory write-down of $450 included

in the cost of sales during 2023.

and Marketing Expenses.

5 unchanged sentences

and Development Expenses.

During 2022, research and development expenses decreased by $526 to $1,460, as compared to $1,986 during

During 2023, research and development expenses decreased by $238 to $1,222, as compared to $1,460

The decrease in 2023 is attributed to a decrease in engineering staff during 2023 as compared to 2022.

Our research and development

efforts during 2022 focused on developing our new 27 kW D.C.

power system, our new 4Y Toyota engine control system, and on product design

and customization for our international customers.

We plan to recruit additional engineers during 2023 to support new product developments

and our customer diversification efforts.

Our research and

development efforts during 2023 primarily focused on developing our new 27 kW power system, new software for our new 4Y Toyota

engine control system, mobile EV chargers, and solar hybrid power systems.

We continue to search for qualified engineers to join our

engineering team and to support our customer diversification efforts.

and Administrative Expenses .

Our general and administrative expenses increased by $1,658 to $4,727 during 2022, as compared to $3,069

The increase was primarily due to $515 in stock-based compensation to officers, employees and consultants, an increase of

$168 in legal and consulting fees, and smaller increases to insurance, rent, and utilities.

general and administrative expenses for 2021 include a $700 credit to salaries and benefits expense related to the ERC, a refundable

tax credit recorded in accounts receivable.

The ERC assisted business owners and their employees by providing an incentive to keep workers

on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage.

Our general and administrative expenses decreased by $436 to $4,291 during 2023, as compared to $4,727

The decrease in general and administrative expenses during 2023 was primarily due to not having stock-based compensation

during 2023, as compared to stock-based compensation expense of $515 during 2022, coupled with a slight increase in consulting services,

rent, and bank fees during 2023.

and Finance Costs.

2 unchanged sentences

by $10, bank fees related to our line of credit with Pinnacle Bank increased by $508.

from PPP Loan Forgiveness .

In September 2021, we recognized a non-cash gain of $1,715 within

Other income (expense) on the consolidated statement of operations on the forgiveness of our PPP loan.

Income (Expense), Net.

During 2022, other income was $7, as compared to $29 during 2021, an decrease of $22.

The decrease was primarily

attributable to refunds of general liability insurance paid during 2021.

As a result of the factors identified above, we generated a net loss of $6,548, or ($0.49) per basic and diluted share, for

1 unchanged sentence

The increase in

net loss is primarily attributed to a decrease in net sales of $840 due to labor shortages and supply chain constraints during 2022,

an increase in operating expenses of $1,115, coupled with the gain from forgiveness of the PPP loan in 2021.

and Capital Resources

net loss is primarily attributed to a decrease in net sales of $763 due postponement of shipments of our DC power generators during the

second half of 2023 as requested by our largest telecommunications customer, an increase in interest expense primarily related to

our line of credit with Pinnacle Bank of $508, and an inventory write-down of $450 recorded in the cost of sales during 2023 to adjust inventory to net realizable

Capital Resources and Going Concern

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.

the year ended December 31, 2023, we funded our operations primarily from cash on hand.

These funds were also used to increase our engineering

and production staff and inventory to support higher production.

As of December 31, 2023, we had working capital of $11,775, as compared

to working capital of $17,367 at December 31, 2022.

This $4,393 decrease in working capital is primarily attributable to a $4,890 decrease

This $5,592 decrease in working capital is primarily attributable to a $338 increase

in cash and cash equivalents resulting from net cash of $3,430 used in operating activities, net cash used in investing activities of

$25 for the acquisition of new property and equipment, and net cash from financing activities of $1,642 which includes net proceeds of

$1,884 from our credit facility and $242 in repayments of equipment financing.

$194 for the acquisition of new property and equipment, and net cash from financing activities of $3,962 which includes net proceeds

of $1,556 from sales of 4,600,000 shares of common stock in December 2023 and net proceeds of $2,354 from our credit facility.

December 31, 2023, and December 31, 2022, our net trade receivables totaled $1,676 and $2,230, respectively.

On December 31, 2023, $1,156

(90%) represented the largest open customer account balance, while $3,131 (74%) and $624 (15%) represented the two largest open customer

account balances on December 31, 2021.

(69%) and $264 (16%) represented the two largest open customer account balances, while $2,006 (90%) represented the largest open customer

account balance on December 31, 2022.

December 31, 2021, we recognized $2,000 related to the ERC for salaries and benefits expenses incurred during 2021 resulting in a refundable

3 unchanged sentences

processed by the IRS.

available capital resources on December 31, 2022, consisted primarily of $211 in cash and cash equivalents, as compared to $5,101 as

of December 31, 2021.

available capital resources on December 31, 2023, consisted primarily of $549 in cash and cash equivalents, as compared to $211 as of

December 31, 2022.

We expect our future capital resources will consist primarily of cash on hand, cash generated by operations, drawdowns

6 unchanged sentences

an expiration date of September 30, 2024.

The Loan Agreement, as amended, provides for a revolving credit facility under which Pinnacle

may, in its sole discretion upon our request, make advances to us in an amount, subject to certain limitations and adjustments, of up

to (a) 85% of the aggregate net face amount of our accounts receivable and other contract rights and receivables, plus (b) the lesser

of (i) 35% of the lower of cost or wholesale market value of certain of our inventory or (ii) $2,500.

In no event will the aggregate

amount of the outstanding advances under the revolving credit facility be greater than $4,000.

Loan Agreement, provides for a revolving credit facility under which Pinnacle may, in its sole discretion upon our request, make advances

to us in an amount, subject to certain limitations and adjustments, of up to (a) 85% of the aggregate net face amount of our accounts

receivable and other contract rights and receivables, plus (b) the lesser of (i) 35% of the lower of cost or wholesale market value of

certain of our inventory or (ii) $2,500.

The aggregate amount of the outstanding advances under the revolving credit facility were initially

limited to $4,000.

On May 25, 2023, we executed the Fourth Modification to the Loan Agreement to amend the amount of available advances

under the Loan Agreement such that the aggregate amount of the outstanding advances under the revolving credit facility may not be greater

than $6,000 and raised the concentration percentage applicable to certain Tier-1 telecommunication customers from 50% to 75% in the definition

of eligible accounts.

September 5, 2023, the Company entered into a Fifth Modification to the Loan Agreement under which the parties (a) agreed to amend the

amount of available advances under the Loan Agreement such that the aggregate amount of the outstanding advances under the revolving

credit facility may not be greater than seven and a half million dollars ($7.5 million), (b) extended the standard of eligibility applicable

to certain Tier-1 telecommunication customers from ninety (90) days to one hundred twenty (120) days of invoice date in the definition

of eligible accounts, (c) increased the inventory advance rate from 35% to 40% of the aggregate eligible inventory value of eligible

inventory, and (d) raised the inventory advance limit from two million dollars ($2.0 million) to four million dollars ($4.0 million).

accrues on the daily balance at a rate of 1.25% above the prime rate, or the Standard Interest Rate, but in no event will the Standard

8 unchanged sentences

have an outstanding balance of $4,238 under the Loan Agreement at December 31, 2023.

As of December 31, 2022, we had availability

under the Loan Agreement of $1,137 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.

Protection Program Loan

May 4, 2020, we entered into a loan with Citibank, N.A.

in an aggregate principal amount of $1,715, or the PPP Loan, pursuant to the

Paycheck Protection Program, or the PPP, under the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act.

PPP Loan is evidenced by a promissory note dated May 4, 2020.

The PPP Loan matures two years from the disbursement date and bears interest

at a rate of 1% per annum.

We filed our application for a full loan forgiveness to Citibank on July 30, 2021 and the application is under

the bank’s review.

Interest accrues during the time between the disbursement of the PPP Loan and SBA remittance of the forgiveness

We are responsible for paying the accrued interest on any amount of the loan that is not forgiven.

Principal and interest are

payable monthly commencing on loan amounts not forgiven and may be prepaid by us at any time prior to maturity with no prepayment penalties.

We applied ASC 470, Debt , to account for the PPP Loan.

the terms of the CARES Act, recipients of PPP loans can apply for and be granted forgiveness for all or a portion of loans granted under

The Company filed its application for a full loan forgiveness to Citibank in July 2021.

On September 28, 2021, the Company received

noticed from Citibank indicating that the SBA rendered final decision approving loan forgiveness in the amount of $1,715.

we recognized a non-cash gain of $1,715 within Other income (expense) on the statement of operations.

As of December 31, 2023, we had availability under

the Loan Agreement of $376 and we believe that we are in compliance with the terms and conditions of the Loan Agreement.

following table sets forth the significant sources and uses of cash for the periods set forth below (in thousands):

7 unchanged sentences

in 2023 was primarily due to a net loss of $6,548, a decrease in accounts receivable of $554, a decrease in prepaid expenses of $2,174,

an increase in inventories of $6,443, and an increase in customer deposits of $1,229.

December 31, 2021, we recognized $2.0 million related to the ERC for salaries and benefits expenses incurred during 2021 resulting in

a refundable tax credit.

Of this amount, cost of sales was reduced by $1.3 million as a result of the ERC, and general & administrative

expenses was reduced by $0.7 million as a result of the ERC.

The ERC assist business owners and their employees by providing an incentive

to keep workers on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage.

a decrease in customer deposits of $508, and an increase in inventories of $1,062.

cash used in investing activities for 2023 totaled $194, as compared to $25 for 2022, an increase of $169.

The net cash used in investing

activities in 2022 was attributable to in new manufacturing equipment.

cash provided by financing activities totaled $1,642 for 2022, as compared to $12,906 provided by financing activities during 2021, a

decrease of $11,264.

This decrease was primarily due to the issuance and sale of 750,000 shares of our common stock in a firm commitment

underwritten public offering on February 10, 2021.

activities in 2023 was attributable to the purchase of two robotic welders to help improve efficiencies in manufacturing.

cash provided by financing activities totaled $3,962 for 2023, as compared to $1,642 provided by financing activities during 2022, an

increase of $2,320.

This increase was primarily due to the issuance and sale of 4,60,000 shares of our common stock in a firm commitment

underwritten public offering on December 5, 2023.

We received net proceeds of approximately $1,556 from the sale of the shares after

deducting underwriting discounts and commissions and other offering expenses payable by us.

During 2022, we received $1,884 in proceeds

During 2023, we received $2,354 in net proceeds

from advances from our credit facility at Pinnacle Bank and repaid $205 on our equipment financing notes payable.

5 unchanged sentences

purchases of DC power systems by telecommunications customers in the U.S., 31% in purchases by telecommunications customers outside the

U.S., 1% in purchases by customers in the marine industry, 1% in purchases in military markets, and 3% in purchases by customers in other

Due to overall shortage of commodities worldwide caused by COVID, our largest customers have placed orders with delivery dates

up to nine months in the future.

We believe this provides us better control on operational efficiencies and inventory management.

believe the majority of our backlog will be shipped within the next twelve months.

However, there can be no assurance that we will be

successful in fulfilling such orders and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected

in our backlog.

Quantitative and Qualitative Disclosures About Market Risk.

Financial Statements and Supplementary Data.

U.S., 6% in purchases in military markets, and 3% in purchases by customers in the marine industry.

We believe the majority of our backlog

will be shipped within the next twelve months.

However, there can be no assurance that we will be successful in fulfilling such orders

and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected in our backlog.

the first quarter of 2024, the Company received $5,400 in new purchase orders from customers for its DC power systems.

Combined with

open orders as of April 1, 2024, the Company has a total sales backlog of $7,700, which 40% of the orders are from its largest telecommunications

customer in the U.S., 50% from other telecommunications customers, 8% from customers in military markets, and 2% from Marine, EV and

other markets.

Of the $7,700 in the sales backlog, 36% of the orders are from customers in international markets.

The Company expects

to complete shipment of these orders within the next six to twelve months.

and Qualitative Disclosures About Market Risk.

Statements and Supplementary Data.

is made to the financial statements, which begin at page F-1 of this Annual Report on Form 10-K.

Changes in and Disagreements with Accountants on Accounting and Finance Disclosure.

in and Disagreements with Accountants on Accounting and Finance Disclosure.

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 5. Market for Registrant’s Common Equity