Polar Power, Inc. Converts CEO Notes into Series A Preferred Stock and Warrant

What Happened

• Polar Power, Inc. announced on September 25, 2026 that it entered into an Exchange Agreement with its CEO and Chairman, Arthur Sams, converting $614,700 in aggregate principal and accrued interest of promissory notes into 683 shares of the Company’s Series A Convertible Preferred Stock and a warrant to buy 382,276 shares of common stock. A press release about the transaction was issued September 24, 2026.

Key Details

• Amount converted: $614,700 in principal and accrued interest surrendered by the CEO.
• Preferred stock: 683 shares of Series A Convertible Preferred Stock; stated value $1,000 per share; 10% per annum dividend accruing monthly.
• Conversion mechanics: Preferred is convertible into common stock at a market conversion price equal to 90% of the lowest VWAP over the seven consecutive trading days immediately preceding conversion, subject to a floor price.
• Warrant: exercisable for 3 years to purchase 382,276 shares of common stock; initial exercise price $1.34 per share.

Why It Matters

• This transaction reduces the Company's outstanding debt to the CEO by $614,700 but creates potential future dilution: the convertible preferred can convert into common stock at a discounted market-based price and the warrant could add up to 382,276 common shares if exercised.
• The Series A carries a 10% annual dividend obligation that accrues monthly, which is an added cash or non-cash claim on the company until conversion or redemption.
• Investors should note the insider nature of the deal (CEO/Chairman) and monitor future disclosures for conversion events, warrant exercises, or any adjustments to the conversion floor price.