Financial Performance - Revenues for the three months ended September 30, 2024, increased to $16,125,000, up 9.1% from $14,787,000 in the same period of 2023[19] - Gross profit for the same period was $5,218,000, representing a gross margin of 32.4%, compared to $4,235,000 and a margin of 28.6% in 2023[19] - Operating loss narrowed to $1,212,000 for Q1 2024, compared to a loss of $1,785,000 in Q1 2023, indicating improved operational efficiency[19] - Net loss for the three months ended September 30, 2024, was $1,669,000, a reduction from $2,188,000 in the prior year, resulting in a net loss per share of $0.10 compared to $0.13[19] - Adjusted EBITDA for Q3 2024 was a loss of $613,000, an improvement of $635,000 compared to a loss of $1,248,000 in Q3 2023[162] - Net loss for Q3 2024 was $1,669,000, compared to a net loss of $2,188,000 in Q3 2023, indicating a reduction in losses[162] Cash Flow and Liquidity - The company reported a net cash provided by operating activities of $944,000 for the three months ended September 30, 2024, compared to a net cash used of $3,093,000 in the same period of 2023[24] - Cash at the end of the period was $559,000, down from $643,000 at the end of the previous quarter[24] - As of September 30, 2024, the company had a cash balance of $0.6 million and $4.0 million available under its $16.0 million GBC Credit Facility[164] - The company anticipates that existing cash resources will not be sufficient to meet anticipated capital needs for the next twelve months[166] - There is substantial doubt about the company's ability to continue as a going concern, impacting its liquidity and operational plans[36] Assets and Liabilities - Total current assets decreased to $26,850,000 as of September 30, 2024, down from $28,338,000 at June 30, 2024[17] - Total liabilities slightly decreased to $31,727,000 from $32,107,000 in the previous quarter, reflecting a reduction in financial obligations[17] - The company’s accumulated deficit increased to $(101,381,000) as of September 30, 2024, from $(99,712,000) at June 30, 2024[21] - The company reported stockholders' equity of $194,000, which is below the Nasdaq minimum requirement of $2,500,000[199] Research and Development - Research and development expenses were $1,315,000 for the quarter, slightly up from $1,295,000 in the prior year, indicating continued investment in innovation[19] - The company plans to invest in research and development to enhance its product mix and improve production efficiencies[124] - The company has filed three new patents related to advanced lithium-ion energy storage technology, focusing on optimizing battery life, enhancing user understanding of battery health, and applying AI for predictive cell balancing[124][126] Customer and Supplier Relationships - The company had three major customers representing approximately $11,413,000 or 71% of total revenues for the three months ended September 30, 2024, compared to $12,555,000 or 85% in 2023[100] - One supplier accounted for approximately $3,986,000 or 31% of total purchases during the three months ended September 30, 2024[101] Legal and Compliance Issues - The company is currently delinquent in filing its Form 10-Q for the periods ended September 30, 2024, and December 31, 2024[200] - The company intends to file the delinquent reports by April 15, 2025, to regain compliance with Nasdaq listing rules[202] - The company is involved in multiple legal proceedings, including a securities class action and a shareholder derivative action, which may impact its financial condition[191][192] - The company has denied the merit of claims in employment-related actions and intends to defend against them vigorously[193][194] Strategic Initiatives - Management is evaluating strategies to improve profitability, including planned price increases and cost-saving initiatives[41] - The company intends to expand its supply chain and customer partnerships, seeking further partnerships and/or acquisitions to meet growth objectives[124] - The company is focused on expanding sales and marketing initiatives to secure new customer relationships and support the transition to lithium for current customers[130] Inventory and Expenses - The company’s inventories decreased from $16.977 million as of June 30, 2024, to $15.342 million as of September 30, 2024[43] - Selling and administrative expenses increased by $390,000 or 8% to $5,115,000 for the quarter ended September 30, 2024, primarily due to stock-based compensation and professional services[154] - Total rent expense for the three months ended September 30, 2024, was approximately $232,000, compared to $238,000 for the same period in 2023[114] Debt and Financing - The Company entered into a Credit Facility Agreement with Cleveland Capital, L.P., providing a line of credit of up to $2,000,000 for working capital purposes[64] - The outstanding balance under the GBC Credit Facility was approximately $12.0 million as of September 30, 2024, with up to $4.0 million available for future borrowings[49] - The company had $1.0 million of related party debt outstanding, compared to no related party debt balance as of June 30, 2024[63] Market Conditions - The company has experienced delays in new orders for energy storage solutions due to lower capital spending in the market sector[38] - The company has experienced delays in orders of new forklifts due to a general slowing of capital spending by customers, impacting the order backlog[128] - The company is experiencing delays in new orders for energy storage solutions due to lower capital spending and interest rate variability, impacting sales strategies[129]
Flux Power(FLUX) - 2025 Q2 - Quarterly Report