Polar Power (POLA) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01The COVID-19 pandemic and recovery had a significant negative impact on our business, sales, results of operations and financial condition in 2020 to 2022, but to a lesser extent in 2024 and 2025
2. 02Rising inflation in the economies in which we operate may adversely affect our operating margins and our results of operation
3. 03Terrorist attacks and threats of war may impact all aspects of our operations, revenues, costs and stock price in unpredictable ways
4. 04We have incurred significant losses in the past and we may incur losses in the future, which may hamper our operations and impede us from expanding our business
5. 05Many of our DC power systems involve long design and sales cycles, which could have an adverse impact on our results of operations and financial performance
6. 06We do not have long-term commitments for significant revenues with most of our customers and may be unable to retain existing customers, attract new customers or replace departing customers with new customers that can provide comparable revenues and profits
7. 07We face inventory risk and may be required to write-off additional inventory in the future
8. 08The unavailability or shortage, or increase in the cost, of raw materials and components could have an adverse effect on our sales and profitability
9. 09The markets within which we compete are highly competitive. Many of our competitors have greater financial and other resources than we do and one or more of these competitors could use their greater financial and other resources to gain market share at our expense
10. 10Rapid technological changes may prevent us from remaining current with our technological resources and maintaining competitive product and service offerings
11. 11If we are unable to continue to develop new and enhanced products and services that achieve market acceptance in a timely manner, our competitive position and operating results could be harmed
12. 12Natural disasters and other events beyond our control could materially adversely affect us
13. 13We are dependent on relationships with our key material suppliers, and the partial or complete loss of one of these key suppliers, or the failure to find replacement suppliers or manufacturers in a timely manner, could adversely affect our business63% rewritten
14. 14Price increases in some of the key components in our DC power systems could materially and adversely affect our operating results and cash flows
15. 15A portion of our key components are sourced in foreign countries, exposing us to additional risks that may not exist in the U.S
16. 16We manufacture and assemble a majority of our products at two facilities. Any prolonged disruption in the operations of this facility would result in a decline in our sales and profitability
17. 17Our business operations are subject to substantial government regulation
18. 18Certain of our products are used in critical communications networks which may subject us to significant liability claims
19. 19We could be adversely affected by our failure to comply with the laws applicable to our foreign activities, including the U.S. Foreign Corrupt Practices Act and other similar worldwide anti-bribery laws
20. 20We are exposed to risks related to our international sales, and the failure to manage these risks could harm our business. If we fail to expand our business into international markets, our revenues and results of operations may be adversely affected
21. 21Cyberattacks through security vulnerabilities could lead to disruption of business, reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position

Risks Related to Our Intellectual Property

1. 22If we fail to adequately protect our intellectual property rights, we could lose important proprietary technology, which could materially and adversely affect our business
2. 23If we face claims of intellectual property infringement by third parties, we could encounter expensive litigation, be liable for significant damages or incur restrictions on our ability to sell our products and services

Risks Related to Our Common Stock

1. 24Our operating results can fluctuate significantly from period to period, which makes our operating results difficult to predict and can cause our operating results in any particular period to be less than comparable periods and expectations from time to time
2. 25Because we have little or no control over many of these factors, our operating results are difficult to predict. Any adverse change in any of these factors could negatively affect our business and results of operations
3. 26Our Chairman, President and Chief Executive Officer owns a significant percentage of our common stock and will exercise significant influence over matters requiring stockholder approval, regardless of the wishes of other stockholders
4. 27The price of our shares of common stock is volatile, and you could lose all or part of your investment
5. 28A decline in the price of our common stock could affect our ability to raise further working capital, which could adversely impact our ability to continue operations
6. 29We do not anticipate paying cash dividends, and accordingly, stockholders must rely on stock appreciation for any return on their investment
7. 30Our 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 stock73% rewritten
8. 31If securities or industry analysts do not publish research or reports or publish inaccurate or unfavorable research or reports about our business, our share price and trading volume could decline
9. 32We are not subject to the provisions of Section 203 of the Delaware General Corporation Law, which could negatively affect your investment
10. 33Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management
11. 34We incur significant costs as a result of operating as a public company and our management expects to devote substantial time to public company compliance programs
12. 35Our issuance of shares of preferred stock could adversely affect the market value of our common stock, dilute the voting power of common stockholders and delay or prevent a change of control