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- Delisting Provisions In Convertible Notes (new) — Note terms include provisions that trigger if delisted from NASDAQ (conversion discount increases to 65%), indicating heightened delisting risk.
Polar Power raises $807K via dilutive convertible notes, hires restructuring firm, settles eviction for $755K
Filed May 22, 2026 · Period ending May 18, 2026 · ~1 min read
Key Changes
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Company raised $807K net through convertible notes with highly dilutive terms: conversion at 20% discount to lowest VWAP over 10 days, or 35% discount if delisted from NASDAQ. Reserved 2.2M shares for conversion.
Item 1.01: Convertible Notes verify on EDGAR → -
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Hired Mammoth Crest Capital for $500K plus equity to lead restructuring; firm will appoint 2 of 7 board seats within 30 days, representing significant outside control over operations and governance.
Item 1.01: Restructuring Agreement verify on EDGAR → -
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Evicted from headquarters on May 19, paid $755K to regain access three days later. Must pay $55K monthly through June 2027 plus $92K monthly July 2026-April 2027 to avoid re-eviction. Must vacate warehouse by August 31.
Item 1.01: Eviction Settlement verify on EDGAR → -
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Must obtain shareholder approval within 60 days to issue shares exceeding 19.99% of outstanding stock for note conversions. Until approved, conversions capped at 19.99%, potentially limiting noteholders' ability to convert.
Item 1.01: Shareholder Approval verify on EDGAR → -
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Independent director Keith Albrecht rescinded his May 14 resignation four days later; Katherine Koster's resignation remains in effect, reducing independent director count by one.
Item 5.02: Director Changes verify on EDGAR →
Summary
Polar Power disclosed a series of transactions indicating severe financial distress. The company raised just $807,000 through convertible notes with extremely dilutive terms—conversion at 20% discount to the lowest VWAP, or 35% if delisted—while simultaneously being evicted from its headquarters and paying $755,000 to regain access three days later.
The company has committed to ongoing payments totaling over $1 million through mid-2027 to avoid re-eviction and must vacate its warehouse by August. To address its operational crisis, Polar hired restructuring firm Mammoth Crest Capital for $500,000 plus 4.5% equity, granting the firm significant control by appointing two of seven board seats.
The convertible notes reserved 2.2 million shares for conversion, representing substantial potential dilution for existing shareholders, especially given the discount-to-market conversion terms. The company terminated a revolving credit facility just five days after signing it, suggesting difficulty securing traditional financing. Retail investors should watch whether the company obtains shareholder approval within 60 days for the convertible note conversions. Without approval, conversions are capped at 19.99% of outstanding shares, which could create conflicts with noteholders and limit the company's ability to satisfy its debt obligations. The combination of eviction, dilutive financing, and outside restructuring control suggests Polar Power faces an existential liquidity crisis.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Polar Power raised $807K via convertible notes, hired restructuring firm for board changes and $500K fee, and settled eviction for $755K.
Added in current filing · verify on EDGAR →
On May 21, 2026, Polar Power, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “CFI SPA”) with CFI Capital LLC (“CFI”). Pursuant to the CFI SPA, on May 21, 2026 (the “Issue Date”), the Company issued to CFI a 6% convertible redeemable note in the aggregate principal amount of $600,000 (the “CFI Note”). The purchase price of the CFI Note was $546,000, and the Company received net proceeds of $500,000, after deducting $10,000 to cover CFI’s legal fees and a $36,000 payment to Craft Capital Management, LLC (“Craft”) as a broker/placement agent fee. ... On May 21, 2026, the Company entered into a Securities Purchase Agreement (the “Monroe SPA”) with Monroe Street Capital Partners, LP (“Monroe”). Pursuant to the Monroe SPA, on May 21, 2026 (the “Issue Date”), the Company issued to Monroe a 6% convertible redeemable note in the aggregate principal amount of $370,600 (the “Monroe Note”). The purchase price of the Monroe Note was $340,000, and the Company received net proceeds of $307,100, after deducting $12,500 to cover Monroe’s legal fees and a $20,400 payment to Craft.
The company raised $807,100 in net proceeds through two convertible notes totaling $970,600 in principal. The notes carry 6% interest, mature in 12 months, and convert at 80% of the lowest VWAP over the prior 10 trading days (or 65% over 20 days if delisted). The company reserved 2.2 million shares for conversion and must obtain shareholder approval within 60 days to issue shares exceeding 19.99% of outstanding stock.
Added in current filing · verify on EDGAR →
On May 21, 2026, the Company also signed a Restructuring, Implementation and Management Services Agreement (the “Services Agreement”) with Mammoth Crest Capital, LLC. (“MCC”), effective as of May 19, 2026. ... No later than 30 days following May 19, 2026, the effective date of the Services Agreement, the Company shall cause its board of directors (the “Board”) to consist of seven directors, and appoint Barrett Evans and Michael Hill as directors who are designated by MCC. ... In consideration, the Company shall pay to MCC $500,000 in two installments: (a) $100,000 on the Effective Date as a non-refundable retainer; and (b) $400,000 (the “Balance”) upon MCC’s delivery of the Deliverables and Milestones as defined by the Services Agreement. ... On the Effective Date, the Company shall issue to MCC (or its designee) a number of shares of the Company’s Common Stock (the “Shares”) such that, after giving effect to the issuance of the Shares, the Shares represent 4.5% of the issued and outstanding shares of common stock of the Company on the Effective Date.
The company hired Mammoth Crest Capital to lead operational and financial restructuring for $500,000 plus $25,000 monthly after milestones are met, with payment deferred until the company raises at least $5 million. MCC receives 4.5% equity and will appoint two directors to a reconstituted seven-member board within 30 days. This represents significant outside control over company operations and governance.
Event · Item 1.02 — Termination of a Material Definitive Agreement
Polar Power terminated its revolving loan agreement with Stone Brothers Capital five days after signing, with no loans drawn.
Added in current filing · verify on EDGAR →
On May 18, 2026, the Company sent a written termination notice to the Lender to terminate the Loan Agreement. The termination is effective after five business days. The Lender has not made any loans to the Company as of May 18, 2026.
Polar Power terminated its Revolving Loan Agreement with Stone Brothers Capital just five days after entering into it on May 13, 2026. The termination becomes effective after a five-business-day notice period. Notably, no funds were ever drawn under this facility, suggesting the company either found alternative financing or determined the facility was unnecessary.
Event · Item 2.03 — Creation of a Direct Financial Obligation
Polar Power created new direct financial obligations through securities purchase agreements and notes with CFI and Monroe.
Added in current filing · verify on EDGAR →
On May 21, 2026, the Company entered into the CFI SPA, CFI Note, Monroe SPA and Monroe Note, as described in Item 1.01 above and incorporated herein by reference.
The company created new direct financial obligations by entering into securities purchase agreements and notes with two parties (CFI and Monroe) on May 21, 2026. The specific terms and amounts are referenced in Item 1.01 of this filing, which is not included in the provided text.
Event · Item 3.02 — Unregistered Sales of Equity Securities
Polar Power disclosed unregistered sales of equity securities, with details incorporated by reference from Item 1.01.
Added in current filing · verify on EDGAR →
Item 3.02. Unregistered Sales of Equity Securities. The disclosures contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.02.
The company disclosed unregistered sales of equity securities under Item 3.02. The specific details of these sales are referenced in Item 1.01 of the same 8-K filing, which is not included in the provided text. Unregistered equity sales typically involve private placements or other exempt offerings that do not require SEC registration.
Event · Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation
Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
on May 14, 2026, Keith Albrecht and Katherine Koster, two of the Company’s independent directors, resigned as members of the Board of the Company, effective May 19, 2026.
Two independent directors initially resigned on the same day with the same effective date. While Albrecht's resignation was rescinded, Koster's resignation appears to remain in effect, reducing the Board's independent director count by one.
Event · Item 9.01 — Financial Statements and Exhibits
Polar Power issued promissory notes to two lenders and entered a restructuring/management services agreement.
Added in current filing · verify on EDGAR →
Promissory Note issued by Polar Power, Inc. to CFI Capital LLC, dated May 21, 2026
The company issued a promissory note to CFI Capital LLC on May 21, 2026, evidencing new debt financing. The terms, amount, and maturity are detailed in the attached exhibit. This represents new borrowing that increases the company's debt obligations.
Added in current filing · verify on EDGAR →
Promissory Note issued by Polar Power, Inc. to Monroe Street Capital Partners, LP, dated May 21, 2026
The company issued a second promissory note to Monroe Street Capital Partners, LP on May 21, 2026, representing additional debt financing. This is a separate borrowing from a different lender, further increasing the company's debt load.
Added in current filing · verify on EDGAR →
Side Letter Relating to Note Issuance by and among Polar Power, Inc., CFI Capital LLC and Monroe Street Capital Partners, LP, dated May 21, 2026
A side letter was executed among the company and both lenders regarding the note issuances. Side letters typically address coordination, rights, or special terms among multiple parties in a financing transaction. The specific provisions are in the attached exhibit.
Added in current filing · verify on EDGAR →
Restructuring, Implementation and Management Services Agreement effective as of May 19, 2026 by and between Polar Power, Inc. and Mammoth Crest Capital, LLC.
The company entered a restructuring, implementation, and management services agreement with Mammoth Crest Capital, LLC effective May 19, 2026. This suggests the company is undergoing operational or financial restructuring and has engaged outside advisors to assist. Such agreements often indicate financial stress or strategic repositioning.
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Figures/quotes linked to EDGAR · Narrative written by AI · May 24, 2026 · How we verify