Flux Power(US:FLUX)2025-11-13 21:33Financial Performance - Revenues for the three months ended September 30, 2025, were $13,175,000, a decrease of 18.1% compared to $16,125,000 for the same period in 2024[17] - Gross profit for the same period was $3,765,000, down 27.8% from $5,218,000 year-over-year[17] - Operating loss increased to $2,178,000 for Q1 2025, compared to a loss of $1,212,000 in Q1 2024[17] - Net loss for the three months ended September 30, 2025, was $2,562,000, compared to a net loss of $1,669,000 in the prior year, representing a 53.4% increase in losses[17] - Adjusted EBITDA for the quarter was a loss of $1,718,000, compared to a loss of $372,000 in the prior year[174] - The net loss for the quarter ended September 30, 2025, was $2,562,000, compared to a net loss of $1,669,000 for the same quarter in 2024[173] Assets and Liabilities - Total current assets decreased to $26,957,000 as of September 30, 2025, down from $31,804,000 at June 30, 2025, a decline of 15.4%[15] - Total liabilities decreased to $33,015,000 as of September 30, 2025, down from $40,156,000 at June 30, 2025, a reduction of 17.7%[15] - Cash at the end of the period increased to $1,588,000 from $1,334,000 at the end of the previous quarter, an increase of 19.0%[21] - The Company had a cash balance of $1.6 million and $6.1 million available under the Gibraltar Business Capital Credit Facility as of September 30, 2025[41] Capital Raising Activities - The company raised $3,227,000 from the issuance of prefunded preferred stock warrants and common stock warrants under a private placement[21] - The Company completed a Public Offering in October 2025, raising $9.2 million in cash proceeds[46] - The Company completed a Private Placement on September 15, 2025, raising approximately $5.0 million through the sale of Prefunded Preferred Stock Warrants and Common Stock Warrants[70] - The net proceeds from the Private Placement, after issuance costs of approximately $400,000, were approximately $4,400,000[72] Operational Focus and Strategy - The company continues to focus on the development of advanced lithium-ion energy storage solutions, targeting growth in the material handling sector[27] - Management is implementing price increases and cost-saving initiatives to improve profitability and cash flow from operations[44] - The Company aims to expand its sales and marketing efforts and improve production efficiencies to meet the growing demand for lithium-ion energy solutions[141] Legal and Compliance Matters - The Company is currently involved in multiple legal proceedings, including a class action and a derivative action, but intends to vigorously defend against these claims[114] - The Company expects to establish a $1.75 million escrowed settlement fund to cover payments related to a class action litigation settlement[103] - The Company anticipates its liability insurers will directly fund approximately $1.15 million of the settlement fund, with an estimated contribution of $600,000 from the Company[106] - The Company reached an agreement to resolve the derivative complaint on July 11, 2025, involving corporate governance reforms[213] Stock and Equity Information - The company reported a weighted average number of common shares outstanding of 16,835,698 for the three months ended September 30, 2025[17] - Basic and diluted loss per share for the three months ended September 30, 2025, were calculated based on 16,835,698 weighted-average common shares outstanding[39] - The 2021 Equity Incentive Plan allows for the issuance of awards for up to 2,000,000 shares of common stock, with 164,899 shares available for future grants as of September 30, 2025[81] - The Company approved the 2025 Equity Incentive Plan, authorizing the issuance of up to 1,000,000 shares of common stock for various awards as of September 30, 2025[82] Inventory and Supply Chain - Inventories decreased from $17.231 million as of June 30, 2025, to $15.726 million as of September 30, 2025, with raw materials accounting for $12.321 million[48] - The Company had one supplier accounting for approximately $1,686,000 or 15% of total purchases during the three months ended September 30, 2025, down from $3,986,000 or 31% in 2024[99] Market Conditions and Challenges - The Company is evaluating the impact of new tariffs on imported products, which are expected to negatively affect revenues and profitability[33] - The Company temporarily paused imports from a battery cell supplier in China due to tariff uncertainties, but operations were not materially affected[35] - New orders for energy storage solutions experienced delays in the second half of fiscal 2025, with some customers deferring orders to fiscal 2026 due to lower capital spending and interest rate variability[146] Internal Controls and Governance - Management has identified material weaknesses in internal controls over financial reporting as of September 30, 2025, due to insufficient technical accounting expertise[197] - The company has engaged external financial consulting firms to assist in strengthening internal controls and procedures[200] - The company has not identified any changes in internal controls over financial reporting that materially affect its operations during the fiscal quarter ended September 30, 2025[202]