Polar Power Authorizes a Toxic Convertible Preferred Stock with a 90% Market Discount and a Board Seat for the Lender
POLA sits 23% above its 52-week low of $1.31 on light trading volume (0.1× avg).
Summary
Polar Power authorized a Series A Convertible Preferred Stock with a floating conversion price at a 10% discount to market, a 10% dividend, and a board seat for the holder — a toxic financing structure that threatens massive dilution for a company already fighting for survival.
Key Events · Financing and Capital Events · POLA
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Toxic Preferred Stock Authorized
Polar Power created 25,000 shares of Series A Convertible Preferred Stock with a $1,000 stated value, convertible at 90% of the lowest VWAP over seven trading days — a floating discount that deepens as the stock falls.
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Immediate $1.945M Issuance
1,945 shares will be issued under a Securities Purchase Agreement dated July 10, 2026, representing $1.945M in stated value — nearly one-third of the company's market cap — with conversion terms that could massively dilute existing holders.
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Lender Gains Board Control
The holder of the preferred stock gains the right to elect one independent director to the board, giving the lender direct governance influence over a distressed company.
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Death-Spiral Mechanics
The conversion price is set at a 10% discount to the lowest VWAP over seven days, with a floor at 20% of Nasdaq's minimum price. As the stock drops, the conversion price drops, enabling the holder to convert and sell, pushing the stock lower in a vicious cycle.
Analysis · POLA · Manufacturing
Polar Power created a new Series A Convertible Preferred Stock with deeply dilutive terms — conversion at 90% of the lowest VWAP over seven days, a 10% dividend, and a board seat for the holder. The company plans to issue 1,945 shares ($1.945M stated value) immediately. This is a last-resort financing structure that can rapidly destroy existing equity value, especially given Polar's $5.86M market cap and recent distress including Nasdaq delisting risk, eviction, and prior toxic notes. The floating conversion discount and low floor price (20% of Nasdaq minimum price) create a death-spiral risk where conversion begets more selling pressure, further lowering the conversion price.
How filings like this one have moved
In the 30 days to Sep 12, 2026, 42.4% of the 495 measured filings Wiseek scored 9 moved their stock by 5% or more by the next session's close. The median move was -0.47%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, POLA was trading at $1.61 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $5.9M. The 52-week trading range was $1.31 to $5.75. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.