Flux Power(FLUX) - 2025 Q4 - Annual Report

Filing Information This section provides key details about the company's annual report filing and stock market information Registrant Details FLUX POWER HOLDINGS, INC. filed its annual report on Form 10-K for the fiscal year ended June 30, 2025. The company's common stock is traded on the Nasdaq Capital Market under the symbol FLUX. It is classified as a non-accelerated filer and a smaller reporting company - FLUX POWER HOLDINGS, INC. filed its annual report on Form 10-K for the fiscal year ended June 30, 2025[2] Title of Each Class | Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $0.001 per share | FLUX | Nasdaq Capital Market | - The registrant is classified as a non-accelerated filer and a smaller reporting company[3] Market Value and Shares Outstanding As of December 31, 2024, the aggregate market value of voting and non-voting common stock held by non-affiliates was approximately $19.565 million. As of September 12, 2025, there were 16,835,698 shares of common stock outstanding Market Value and Shares Outstanding | Metric | Value | | :----- | :---- | | Aggregate market value of voting and non-voting common stock held by non-affiliates (as of Dec 31, 2024) | ~$19,565,000 | | Shares of common stock outstanding (as of Sep 12, 2025) | 16,835,698 | Introductory Information This section outlines important disclaimers regarding forward-looking statements and defines key terms Special Note Regarding Forward-Looking Statements This section highlights that the report contains forward-looking statements, particularly in the Business, Risk Factors, and MD&A sections. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially, and readers are cautioned not to place undue reliance on them. Key risks include the ability to continue as a going concern, compliance with credit facility terms, legal proceedings, meeting revenue targets, remediating material weaknesses, and maintaining Nasdaq listing - Forward-looking statements are contained principally in the sections entitled 'Description of Business,' 'Risk Factors,' and 'Management's Discussion and Analysis of Financial Condition and Results of Operations.'[15] - Key risks include: ability to continue as a going concern, compliance with GBC credit facility terms, expense and outcome of legal proceedings, ability to meet projected revenue targets due to order delays and tariff uncertainties, ability to remediate material weaknesses in internal controls, ability to regain and maintain Nasdaq listing standards, and ability to secure sufficient funding[16] - Other risks include managing working capital, obtaining raw materials, maintaining market share, achieving profitability, fulfilling backlog, keeping up with technology, dependence on major customers, and impact of tariffs[18] Use of Certain Defined Terms This section defines key terms used throughout the report, such as 'Company,' 'Flux,' 'we,' 'us,' and 'our' referring to Flux Power Holdings, Inc. and its subsidiary, and standard SEC-related acronyms like 'Exchange Act,' 'SEC,' and 'Securities Act.' - The 'Company,' 'Flux,' 'we,' 'us,' and 'our' refer to the combined business of Flux Power Holdings, Inc. and its wholly owned subsidiary, Flux Power, Inc.[19] - 'Exchange Act' refers to the Securities Exchange Act of 1934, as amended[19] - 'SEC' refers to the Securities and Exchange Commission[19] - 'Securities Act' refers to the Securities Act of 1933, as amended[19] - This 'Annual Report', 'Form 10-K' and 'Current Report' refer to this Annual Report on Form 10-K[19] PART I This part covers the company's business operations, risk factors, properties, and legal proceedings Business Overview Flux Power Holdings, Inc. designs, develops, manufactures, and sells advanced lithium-ion energy storage solutions for industrial and commercial sectors, primarily material handling and airport ground support equipment (GSE). The company's strategy focuses on meeting growing demand, expanding product mix through R&D, improving sales and customer support, and enhancing production efficiencies. Recent developments include order delays due to economic uncertainties and tariffs, but also improvements in supply chain and new OEM partnerships. The company is actively addressing Nasdaq listing compliance issues and has undertaken significant financial and corporate actions, including a private placement and settlement of class action litigation - Flux Power designs, develops, manufactures, and sells advanced lithium-ion energy storage solutions for industrial and commercial sectors, including material handling and airport ground support equipment (GSE)[21] - Long-term strategy: Meet rapidly growing demand for lithium-ion solutions, be the supplier of choice for large companies, invest in R&D, expand sales/marketing, improve customer support, and enhance production efficiencies[22] - Near-term priority: Achieve profitability within capital constraints through supply chain improvements, gross margin expansion, and cost reductions[23] Company Overview This section provides a general description of the company's business and product offerings - The company designs, develops, manufactures, and sells advanced lithium-ion energy storage solutions for industrial and commercial sectors, including material handling and airport ground support equipment (GSE)[21] - These solutions offer a reliable, high-performing, cost-effective, and environmentally friendly alternative to traditional lead-acid and propane-based solutions[21] - Modular and scalable design with proprietary wireless battery management system (BMS) provides real-time monitoring[21] Strategic Vision and R&D Focus This section outlines the company's long-term strategic goals and research and development priorities - Long-term strategy is to be the supplier of choice for large companies with energy storage needs, focusing on the material handling sector (multi-billion-dollar market)[22] - R&D efforts focus on adaptable, reliable, and cost-effective solutions[22] - Patented technology aims to increase battery life, improve battery health understanding, and apply AI for predictive cell balancing[24] Near-Term Strategic Initiatives This section details the company's immediate strategic priorities for achieving profitability and growth - Near-term priority is to achieve profitability within capital constraints[23] - Pursue supply chain improvements, gross margin expansion, and cost reductions[23] - Expand business by leveraging customer relationships, entering new markets, enhancing 'SkyBMS' telemetry, expanding manufacturing/service capacities, capitalizing on leadership with new high-power offerings, and supporting other lithium chemistries[25] Recent Business and Corporate Developments This section summarizes recent operational, financial, and corporate actions and challenges - Experienced delays in new orders due to lower capital spending by large customer fleets, higher interest rates, geopolitical uncertainty, and global tariff impacts[26] - Improved sourcing and purchasing activity, expanding vendor strategy, and adding a second 'tier one' OEM private label battery program[28] - Partnered with the largest critical battery components recycling company in the U.S. for end-of-life lithium-ion batteries[28] - Received multiple Nasdaq notices regarding non-compliance with stockholders' equity and timely filing requirements. The company regained compliance with filing but faced delisting for equity deficit. Nasdaq granted an extension until October 31, 2025, to demonstrate compliance[29][30][31][32] - Increased authorized common stock from 30,000,000 to 75,000,000 shares effective May 28, 2025[33] - Entered into a settlement term sheet on July 11, 2025, to resolve a federal securities class action for $1.75 million, with insurers funding $1.15 million and the company contributing $600,000[34][35][39] - Stockholders approved increasing authorized preferred stock to 3,000,000 shares and designating 1,000,000 shares as Series A Convertible Preferred Stock on August 29, 2025[40][41] - Completed a private placement on September 15, 2025, raised approximately $5.0 million through Prefunded Warrants and Common Warrants, with proceeds for general corporate purposes and growth capital. Certain affiliates, including the CEO and CFO, participated[47][48][49] - The GBC Credit Facility's maturity date was automatically extended to July 31, 2027, upon conversion of the Cleveland Note into equity. The company has received multiple waivers and amendments for non-compliance with financial covenants under the