Flux Power(US:FLUX)2019-11-12 21:31Financial Performance - Net revenue for the three months ended September 30, 2019, was $1,919,000, up from $1,835,000 in the same period of 2018, representing a year-over-year increase of 4.6%[20] - Gross profit for the same period was $117,000, compared to $18,000 in 2018, indicating a significant improvement in profitability[20] - Operating loss widened to $(3,486,000) for the three months ended September 30, 2019, compared to $(2,127,000) in the prior year[20] - Net loss for the quarter was $(3,814,000), an increase from $(2,401,000) in the same quarter of 2018[20] - The Company incurred a net loss of $3,814,000 for the three months ended September 30, 2019, with an accumulated deficit of $42,890,000[38] - The company reported revenues of $1,919,000 for Q1 2020, a 5% increase from $1,835,000 in Q1 2019[90] - Gross profit for Q1 2020 was $117,000, representing a gross profit margin of 6%, compared to 1% in Q1 2019[90] - Operating loss increased to $(3,486,000) in Q1 2020, compared to $(2,127,000) in Q1 2019, reflecting a 64% increase in losses[90] Assets and Liabilities - Total assets increased to $9,009,000 as of September 30, 2019, compared to $7,206,000 on June 30, 2019, reflecting a growth of 25%[17] - Total liabilities rose to $15,541,000 as of September 30, 2019, compared to $10,375,000 on June 30, 2019, marking a 49% increase[17] - Cash at the end of the period was $163,000, a decrease from $504,000 at the end of September 30, 2018[27] - The Company had a cash balance of $163,000 as of September 30, 2019, indicating a need for additional capital to sustain operations[38] - The company had a cash balance of $163,000 and an accumulated deficit of $42,890,000 as of September 30, 2019, indicating liquidity concerns[101] Research and Development - Research and development expenses increased to $1,397,000 for the quarter, up from $662,000 in the same period last year, reflecting a focus on innovation[20] - Research and development expenses rose by $735,000 or 111% to $1,397,000 in Q1 2020, driven by costs associated with product development[97] Capital and Financing - Management plans to raise additional capital through private placements and convertible debt placements[40] - The maximum principal amount available under the line of credit was increased from $5,000,000 to $7,000,000[41] - The Company entered into a Factoring Agreement with CSNK for a facility of up to $3 million, secured by various assets[55] - As of September 30, 2019, the outstanding principal balance of the credit facility was $7,000,000[53] - The principal amount outstanding under the Amended and Restated Credit Facility Agreement was $7,000,000, which was increased to $10,000,000 in October 2019[108] Customer and Supplier Information - The company had three major customers during the three months ended September 30, 2019, accounting for approximately $1,507,000 or 78% of total revenues, compared to $1,641,000 or 89% in the same period of 2018[68] - The company had two suppliers that accounted for more than 10% of total purchases during the three months ended September 30, 2019, totaling $1,033,000 or 44% of total purchases[69] Lease and Rent Expenses - Total rent expense for the three months ended September 30, 2019, was approximately $170,000, significantly higher than $41,000 for the same period in 2018[73] - The company recorded a lease liability and right-of-use lease asset for the Accutek Lease, with a total lease liability of $2,708,468 as of September 30, 2019[74] - The company signed a lease for approximately 45,600 square feet of industrial space with a monthly rental rate of $42,400, escalating at 3% each year[72] Stock and Compensation - The company reported a weighted average number of common shares outstanding of 5,103,342 for the quarter, compared to 3,106,841 in the prior year[20] - The outstanding shares of common stock were reduced from 51,000,868 to 5,101,580 due to a 1-for-10 reverse stock split[35] - The total stock-based compensation expense for the three months ended September 30, 2019, was $451,000, compared to $164,000 for the same period in 2018, reflecting a significant increase[63] - As of September 30, 2019, the company had 571,421 stock options outstanding with a weighted average exercise price of $11.10 and a remaining contract term of 8.31 years[60] - The aggregate intrinsic value of exercisable options at September 30, 2019, was $659,000[63] Future Plans and Expectations - The company expects to receive UL Listing for additional product lines in 2019, enhancing its competitive advantage in the market[33] - The company plans to expand its product line with new larger LiFT Packs and Flux LiFT Pack batteries, targeting commercial launch in December 2019[85] - The company received a $0.3 million order for airport ground support equipment batteries from a global airline customer, with expectations for significant additional orders[86] Miscellaneous - The company entered into a renewal contract with Catalyst Global LLC for investor relations services, effective April 1, 2018, at a cost of $4,500 per month plus 3,484 shares of restricted common stock[126] - On October 24, 2019, the company issued 3,121 shares of common stock to Catalyst Global, LLC, valued at $9.75 per share, totaling $30,429 for services rendered from May 2019 to October 2019[126] - There were no defaults upon senior securities reported by the company[127] - The company has not disclosed any mine safety information as it is not applicable[128] - No other significant information was reported in the financial disclosures[129]