Material Agreement (Form 8-K)

Item 1.01 Entry into of a Material Definitive Agreement.

(i) Securities Purchase Agreements and Convertible Notes

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. The CFI Note has an interest rate of 6% per annum, and the maturity date is 12 months from the Issue Date.

On or following six months from the Issue Date, CFI has the right to convert the outstanding and unpaid principal amount and interest into the Company's shares of common stock, $0.0001 par value per share (the "Common Stock"). The conversion price equals 80% of the lowest daily VWAP of the Company's Common Stock for the last 10 trading days prior to conversion; provided, that if the Company is delisted from NASDAQ, then the conversion discount shall increase to 65% of the lowest trading price and the lookback shall be for the last 20 trading days. The Company granted to CFI piggy-back registration rights for the shares of Common Stock issuable upon conversion of the CFI Note. The Company has instructed its transfer agent to reserve 1,206,434 shares of Common Stock for the conversion.

The CFI SPA and CFI Note also contain other customary terms and conditions.

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 Monroe Note has an interest rate of 6% per annum, and the maturity date is 12 months from the Issue Date.

On or following six months from the Issue Date, Monroe has the right to convert the outstanding and unpaid principal amount and interest into the Company's shares of Common Stock. The conversion price equals to 80% of the lowest daily VWAP of the Company's Common Stock for the last 10 trading days prior to conversion; provided, that if the Company is delisted from NASDAQ, then the conversion discount shall increase to 65% of the lowest trading price and the lookback shall be for the last 20 trading days. The Company granted to Monroe piggy-back registration rights for the shares of Common Stock issuable upon conversion of the Monroe Note. The Company has instructed its transfer agent to reserve 1,000,000 shares of Common Stock for the conversion.

The Monroe SPA and Monroe Note also contain other customary terms and conditions.

On May 21, 2026, the Company, CFI and Monroe entered into a Side Letter Relating to Note Issuance (the "Side Letter"), pursuant to which the Company shall, within 60 calendar days after May 21, 2026, obtain a shareholder approval to effectuate the transactions contemplated by the CFI SPA, CFI Note, Monroe SPA and Monroe Note, including but not limited to the issuance of Common Stock upon the conversion of these agreements and notes in excess of 19.99% of the issued and outstanding Common Stock on the closing date (the "Exchange Cap"). Until the Company has obtained the shareholder approval, the number of shares of Common Stock that the Company issues to CFI and Monroe, in the aggregate, pursuant to the CFI SPA and Monroe SPA or upon conversion of the CFI Note and Monroe Note, shall not exceed the Exchange Cap.

(ii) Restructuring, Implementation and Management Services Agreement

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. Pursuant to the Services Agreement, MCC shall lead, manage, drive and implement the operational, organizational, governance, financial and capital-structure initiatives described in the Scope of Work attached to the Services Agreement. 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. Arthur D. Sams will remain as the chairman of the Board and Michael Fields will remain on the Board. MCC shall, in consultation with the Company's Chief Executive Officer, propose candidates to fill the remaining Board seats.

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. MCC agrees to defer collection of the Balance until the Company has consummated debt or equity financing(s) yielding aggregate gross proceeds to the Company of at $5,000,000. Commencing on the first day of the calendar month immediately after MCC's delivery of the Deliverables and Milestones, the Company shall pay to MCC a monthly cash retainer of $25,000.