Polar Power, Inc. Raises ~$1.0M via Series A Convertible Preferred Sale

What Happened

• Polar Power, Inc. announced it entered into Securities Purchase Agreements with CL Investment Group LLC and LU2 Holdings LLC (agreements dated July 29, 2026) and completed a closing on August 5, 2026. The company issued a total of 1,111 shares of its Series A Convertible Preferred Stock for aggregate gross proceeds of $999,700.
• The investors also received warrants to buy common stock: CL Investment received a warrant for 227,182 shares and LU2 received a warrant for 75,758 shares, each exercisable at $1.65 per share, expiring three years from issuance, and providing for cashless exercise in certain circumstances.

Key Details

• Gross proceeds: $999,700 (CL paid $749,700; LU2 paid $250,000).
• Preferred issued: 1,111 new Series A Convertible Preferred shares (stated value $1,000/share); after the closing 1,611 shares were outstanding (500 prior + 1,111 new).
• Preferred terms: accrues dividends at 10% per annum (accruing monthly); convertible into common stock at the "Market Conversion Price" (90% of the lowest 7‑day VWAP prior to conversion, subject to a floor in the Certificate of Designation).
• Warrants: total of 302,940 warrant shares issued (227,182 + 75,758) at $1.65 exercise price; expire three years from issuance; warrants and preferred conversions are subject to a 9.99% beneficial ownership cap per investor.
• The company filed form agreements for the Securities Purchase Agreement, Common Stock Purchase Warrant, and Registration Rights Agreement.

Why It Matters

• The company obtained near-term capital of roughly $1.0M, which can support operations or working capital needs without a bank loan.
• These securities are dilutive: the convertible preferred carries a high (10%) dividend and converts at a discounted conversion price (90% of recent VWAP), and the warrants allow the issuance of additional common shares at $1.65 — all of which can increase share count if converted or exercised.
• A 9.99% beneficial ownership cap limits any single investor’s immediate control from conversions/exercises, but investors could still cause meaningful dilution collectively.
• Investors should watch for future filings (e.g., registration statements, conversions or warrant exercises) that would show actual dilution to common shareholders and how the company uses the proceeds.