Polar Power Enters Into Credit Facility To Improve Working Capital Flexibility
June 18 2019 - 8:00AM
Polar Power, Inc. (NASDAQ: POLA), a global provider of prime,
backup and solar hybrid DC power solutions, filed a Form 8-K on
June 6, 2019, announcing that the Company had entered into a
Supplier Agreement, dated effective June 4, 2019, with Citibank,
N.A., to further enhance its working capital structure. On
June 10, 2019, the Company received $5.2 million in connection with
the sale of certain accounts receivable to Citibank pursuant to the
terms of the agreement, which amout will be used to support the
Company’s working capital needs.
Under the agreement, the Company may from time
to time offer to sell to Citibank certain of the Company’s accounts
receivable relating to invoiced sales made by the Company to its
largest Tier-1 telecom customer and its affiliates. This credit
facility provides the Company with the ability to receive 100%of
the value of the accounts receivable invoiced, less the applicable
discount charge of approximately 0.84% of the face value of the
invoice. The Company receives payment from Citibank within 48 hours
of Citibank’s acceptance of the invoice, which acceptance may occur
within 10 days of submission of an invoice.
Citibank may change the pricing terms at any
time in its sole discretion upon at least 30 days prior written
notice to the Company. In addition, either party may terminate the
agreement upon 30 business days prior written notice to the other
party, provided that either party may terminate the agreement upon
5 business days prior written notice if the other party is in
breach of, or fails to perform any of its material obligations
under the agreement.
“We believe this credit facility is a
complementary addition to our existing capital resources and
provides us with low-cost means to increase our liquidity and
flexibility in addressing our short term working capital needs,”
said Mr. Luis Zavala, Polar Power’s CFO. “We expect this facility
to be a long term component of our capital structure and is
expected to stabilize volatility in our cash and cash equivalents,
which we may experience from time to time. We want to continually
improve our financial flexibility to support our continued growth
in revenues to our Tier-1 telecom customers,” added Mr. Zavala.
“In executing our growth strategy, we planned
for higher levels of inventory to ensure lower lead times for our
customers. This agreement improves our liquidity while we work to
improve lead times with our key offshore supply chain partners,”
said Mr. Arthur D. Sams, Polar Power’s CEO. “We believe that with
our current assets of $24.3 million compared to $3.7 million in
current liabilities at March 31, 2019, coupled with our ability to
convert certain of our accounts receivable to cash on a timely
basis under the terms of the credit facility, provides us with
greater ability to manage our growth during the next twelve months
and beyond,” added Mr. Sams.
About Polar Power, Inc.Gardena,
California-based Polar Power, Inc. (NASDAQ: POLA), designs,
manufactures and sells direct current, or DC, power systems,
lithium battery powered hybrid solar systems for applications in
the telecommunications market and, in other markets, including
military, electric vehicle charging, cogeneration, distributed
power and uninterruptable power supply. Within the
telecommunications market, Polar’s systems provide reliable and
low-cost energy for applications for off-grid and bad-grid
applications with critical power needs that cannot be without power
in the event of utility grid failure. For more information, please
visit www.polarpower.com. or follow us on
www.linkedin.com/company/polar-power-inc/
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995 This news
release contains certain statements of a forward-looking nature
relating to future events or future business performance.
Forward-looking statements can be identified by the words
“expects,” “anticipates,” “believes,” “intends,” “estimates,”
“plans,” “will,” “outlook” and similar expressions. Forward-looking
statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are
made. With the exception of historical information, the matters
discussed in this press release including, without limitation,
Polar Power’s belief that the credit facility will be a long term
component of Polar Power’s capital structure; Polar Power’s belief
that the credit facility will stabilize volatility in Polar Power’s
cash position; and Polar Power’s belief that the credit facility
provides Polar Power with greater ability to manage its growth
during the next twelve months and beyond are forward-looking
statements and considerations that involve a number of risks and
uncertainties. The actual future results of Polar Power could
differ from those statements. Factors that could cause or
contribute to such differences include, but are not limited to,
adverse domestic and foreign economic and market conditions,
including demand for DC power systems; trade tariffs on raw
materials; changes in domestic and foreign governmental regulations
and policies; and other events, factors and risks. We undertake no
obligation to update any forward-looking statement in light of new
information or future events, except as otherwise required by law.
Forward-looking statements involve inherent risks and
uncertainties, most of which are difficult to predict and are
generally beyond our control. Actual results or outcomes may differ
materially from those implied by the forward-looking statements as
a result of the impact of a number of factors, many of which are
discussed in more detail in our reports filed with the Securities
and Exchange Commission.
Media and Investor Relations: Integra Investor
Relations Shawn M. Severson +1 415-233-7094 info@integra-ir.com
@Integra IR www.integra-ir.com
Company Contact:Polar Power, Inc.249 E. Gardena
Blvd.Gardena, CA 90248Tel:
310-830-9153ir@polarpowerinc.comwww.polarpower.com
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