Flux Power Battles Delisting, Economic Headwinds Amid $1.75M Settlement
Ticker: FLUX · Form: 10-K · Filed: Sep 17, 2025 · CIK: 1083743
Sentiment: bearish
Topics: Lithium-ion Batteries, Industrial Equipment, Nasdaq Delisting, Shareholder Equity, Class Action Lawsuit, Supply Chain, Market Risk
Related Tickers: FLUX
TL;DR
**FLUX is on life support, facing delisting and a class action payout while struggling with order delays; avoid this stock until a clear path to profitability and Nasdaq compliance emerges.**
AI Summary
Flux Power Holdings, Inc. (FLUX) reported significant challenges for the fiscal year ended June 30, 2025, including a stockholders' equity deficit of $4,372,000 as of March 31, 2025, down from $194,000 as of June 30, 2024. The company faced delisting threats from Nasdaq due to non-compliance with the $2,500,000 minimum stockholders' equity requirement, receiving notices on January 31, 2025, and July 31, 2025. Despite filing its December Form 10-Q on March 20, 2025, to address a separate Nasdaq compliance issue, FLUX's common stock faced suspension on August 11, 2025, before a Panel granted an extension until October 31, 2025, to regain compliance. Business operations experienced delays in new orders for energy storage solutions due to lower capital spending by large customer fleets, economic concerns, higher interest rates, and global tariff uncertainties. The company increased its authorized common stock from 30,000,000 to 75,000,000 shares on May 28, 2025, and agreed to a $1.75 million settlement fund for a class action lawsuit on July 11, 2025.
Why It Matters
Flux Power's precarious financial position, marked by a $4,372,000 stockholders' equity deficit and ongoing Nasdaq delisting threats, signals high risk for investors. The company's reliance on extensions to maintain its listing, coupled with a $1.75 million class action settlement, drains capital and confidence. For employees and customers, order deferrals due to economic uncertainty and tariffs could impact job security and product availability. In the competitive lithium-ion energy storage market, larger players with stronger balance sheets are better positioned to weather economic downturns and supply chain disruptions, potentially leaving FLUX at a significant disadvantage.
Risk Assessment
Risk Level: high — Flux Power faces a high risk level due to its stockholders' equity deficit of $4,372,000 as of March 31, 2025, and the ongoing threat of delisting from Nasdaq for failing to meet the $2,500,000 minimum equity requirement. The company also committed to a $1.75 million settlement fund for a class action lawsuit, further straining its limited capital and indicating significant legal and financial liabilities.
Analyst Insight
Investors should exercise extreme caution and consider divesting from FLUX given the severe financial distress, Nasdaq delisting risk, and ongoing legal liabilities. New investors should avoid initiating a position until the company demonstrates sustained profitability, regains Nasdaq compliance, and resolves its significant capital constraints.
Key Numbers
- $19,565,000 — Market value of non-affiliate common stock (as of December 31, 2024, indicating market capitalization)
- 16,835,698 — Shares of common stock outstanding (as of September 12, 2025)
- $194,000 — Stockholders' equity (as of June 30, 2024, below Nasdaq minimum)
- $2,500,000 — Nasdaq minimum stockholders' equity requirement (for continued listing)
- $4,372,000 — Stockholders' equity deficit (as of March 31, 2025, worsening financial position)
- 75,000,000 — Authorized common stock shares (increased from 30,000,000 on May 28, 2025)
- $1.75 million — Escrowed settlement fund (for class action lawsuit, agreed on July 11, 2025)
Key Players & Entities
- Flux Power Holdings, Inc. (company) — registrant
- Nasdaq Stock Market LLC (regulator) — exchange for listing
- Gibraltar Business Capital, LLC (company) — credit facility provider
- Ronald F. Dutt (person) — former chief executive officer
- Charles A. Scheiwe (person) — former chief financial officer
- Kassam v. Flux Power Holdings, Inc. et al. (company) — class action litigation
- U.S. Securities and Exchange Commission (regulator) — filing authority
- Nevada (regulator) — state of incorporation
FAQ
What is Flux Power Holdings, Inc.'s current financial standing regarding stockholders' equity?
As of March 31, 2025, Flux Power Holdings, Inc. reported a stockholders' equity deficit of $4,372,000. This is a significant decline from the $194,000 stockholders' equity reported as of June 30, 2024, and falls well below Nasdaq's minimum requirement of $2,500,000.
Why is Flux Power (FLUX) facing potential delisting from Nasdaq?
Flux Power is facing potential delisting from Nasdaq primarily because it failed to maintain the minimum $2,500,000 in stockholders' equity, reporting a deficit of $4,372,000 as of March 31, 2025. The company received notices on January 31, 2025, and July 31, 2025, regarding this non-compliance.
What is the status of the class action lawsuit against Flux Power Holdings, Inc.?
On July 11, 2025, Flux Power Holdings, Inc. entered into a settlement term sheet to resolve the class action litigation, Kassam v. Flux Power Holdings, Inc. et al. The settlement, formalized on August 27, 2025, provides for a $1.75 million escrowed settlement fund to cover payments, attorneys' fees, and administration expenses.
How have economic factors impacted Flux Power's business operations?
Economic factors such as lower capital spending by large customer fleets, concerns over the economy, higher interest rates, and global tariff uncertainties have caused delays in new orders for Flux Power's energy storage solutions. Some customers have deferred existing orders to later periods, impacting the company's targeted sales trajectory.
What strategic initiatives is Flux Power pursuing to improve its financial performance?
Flux Power's near-term priority is to achieve profitability within capital constraints by pursuing supply chain improvements, gross margin expansion initiatives, and cost reductions. They are also focusing on leveraging customer relationships, expanding into new markets, enhancing their SkyBMS telemetry solution, and increasing manufacturing and service capacities.
What is the significance of Flux Power's authorized common stock increase?
On May 28, 2025, Flux Power increased its authorized common stock from 30,000,000 to 75,000,000 shares. This increase provides the company with more flexibility for future capital raises, such as equity offerings, to address its significant financial needs and potentially regain Nasdaq compliance.
What are the primary risks Flux Power (FLUX) highlights in its 10-K filing?
Flux Power highlights several primary risks, including its ability to continue as a going concern, compliance with credit facility terms, the expense and outcome of legal proceedings like the class action lawsuit, meeting revenue targets due to order delays, remediating material weaknesses in internal controls, and regaining Nasdaq listing compliance.
How is Flux Power addressing its supply chain challenges?
Flux Power has seen improvements in sourcing and purchasing activity by expanding and optimizing its vendor strategy. This includes securing more secondary sources to minimize stock-outs, achieving lower costs from increased sources, and controlling delivery times, which is reflected in current inventory levels and targeted gross margin improvements.
What new partnerships has Flux Power (FLUX) announced recently?
Flux Power recently announced a new partnership aimed at enhancing the recycling process for end-of-life lithium-ion batteries with the largest critical battery components recycling company in the U.S. This collaboration underscores their commitment to environmental responsibility.
What is the deadline for Flux Power to regain Nasdaq compliance?
The Nasdaq Hearings Panel granted Flux Power an exception to demonstrate compliance with the Stockholders' Equity Requirement on or before October 31, 2025. The company must also file its Form 10-K for the period ending June 30, 2025, by September 30, 2025, which it has done.
Risk Factors
- Stockholders' Equity Deficit and Nasdaq Compliance [high — financial]: The company has a stockholders' equity deficit of $4,372,000 as of March 31, 2025, a significant deterioration from $194,000 as of June 30, 2024. This has led to Nasdaq delisting threats, with notices received on January 31, 2025, and July 31, 2025, due to non-compliance with the $2,500,000 minimum stockholders' equity requirement. An extension until October 31, 2025, was granted.
- Delays in New Orders for Energy Storage Solutions [medium — market]: Business operations are experiencing delays in new orders for energy storage solutions. This is attributed to reduced capital spending by large customer fleets, broader economic concerns, higher interest rates, and global tariff uncertainties, directly impacting revenue generation.
- Class Action Lawsuit Settlement [medium — legal]: Flux Power agreed to a $1.75 million settlement fund for a class action lawsuit on July 11, 2025. This represents a significant financial obligation and potential distraction from core business operations.
- Reliance on Credit Facility [high — financial]: The company relies on its credit facility with Gibraltar Business Capital, LLC (GBC) to fund operations and meet anticipated capital resources. Non-compliance with the terms of this agreement poses a significant risk to the company's ability to continue as a going concern.
- Going Concern Uncertainty [high — operational]: The company's ability to continue as a going concern is explicitly mentioned as a forward-looking statement, indicating potential financial distress and operational challenges that could impact its long-term viability.
Industry Context
Flux Power operates in the energy storage solutions sector, which is subject to cyclical capital spending by large fleet customers. The industry is influenced by broader economic conditions, interest rates, and global trade policies, all of which can impact demand for new equipment and solutions. Competition likely exists from established players and emerging technologies, requiring continuous innovation and cost management.
Regulatory Implications
Flux Power faces significant regulatory scrutiny from Nasdaq due to its non-compliance with minimum stockholders' equity requirements. Failure to regain compliance by October 31, 2025, will result in delisting, severely impacting liquidity and investor confidence. The company also faces potential legal and financial repercussions from ongoing lawsuits.
What Investors Should Do
- Monitor Nasdaq Compliance Status
- Assess Impact of Order Delays
- Evaluate Financial Restructuring/Fundraising Plans
- Analyze Cash Burn and Burn Rate
- Review Legal Settlement Impact
Key Dates
- 2025-01-31: Nasdaq Delisting Notice Received — Indicates non-compliance with minimum stockholders' equity requirement, raising concerns about continued listing.
- 2025-03-20: December Form 10-Q Filed — Filed to address a separate Nasdaq compliance issue, demonstrating ongoing efforts to meet regulatory requirements.
- 2025-03-31: Stockholders' Equity Deficit Reported — Worsening financial position with a deficit of $4,372,000, highlighting severe financial challenges.
- 2025-05-28: Authorized Common Stock Increased — Increased from 30,000,000 to 75,000,000 shares, likely to facilitate future fundraising or stock-based transactions to address financial needs.
- 2025-07-11: Class Action Lawsuit Settlement Agreed — Agreement to a $1.75 million settlement fund, representing a significant financial liability and potential cash outflow.
- 2025-07-31: Second Nasdaq Delisting Notice Received — Reinforces the critical need to regain compliance with Nasdaq listing rules regarding stockholders' equity.
- 2025-08-11: Common Stock Suspension — Trading of FLUX stock was suspended, a severe consequence of non-compliance, impacting liquidity and investor confidence.
- 2025-10-31: Nasdaq Compliance Extension Deadline — The final deadline for Flux Power to regain compliance with Nasdaq's minimum stockholders' equity requirement.
Glossary
- Stockholders' Equity Deficit
- A situation where a company's liabilities exceed its assets, resulting in a negative net worth. This indicates the company owes more than it owns. (Crucial for Flux Power as it directly impacts Nasdaq compliance and signals severe financial distress.)
- Going Concern
- An accounting assumption that a business will continue to operate for the foreseeable future, without the intention or need for liquidation. If this assumption is in doubt, it raises serious concerns about the company's viability. (The company's ability to continue as a going concern is explicitly questioned, highlighting significant operational and financial risks.)
- Class Action Lawsuit
- A lawsuit filed by one or more individuals on behalf of a larger group of people who have similar claims against a defendant. (Flux Power faces a $1.75 million settlement for such a lawsuit, representing a material financial obligation.)
- Form 10-Q
- A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a continuing update of a company's financial performance over the course of the fiscal year. (Filing of the December 10-Q was necessary to address a separate Nasdaq compliance issue.)
Year-Over-Year Comparison
The most recent 10-K filing (presumably for the fiscal year ended June 30, 2024, or a prior period) would likely show a healthier financial position. Key differences would include a positive stockholders' equity balance, no immediate threat of Nasdaq delisting, and potentially stronger order pipelines. The current period is marked by a significant deterioration in equity, increased financial risk, and substantial legal liabilities, contrasting sharply with a potentially more stable prior year.
Filing Stats: 4,475 words · 18 min read · ~15 pages · Grade level 17 · Accepted 2025-09-16 19:12:30
Key Financial Figures
- $0.001 — ch registered Common Stock, par value $0.001 per share FLUX Nasdaq Capital Mark
- $194,000 — at based on its stockholders' equity of $194,000 as reported in its Form 10-K for the fi
- $2,500,000 — es the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued l
- $4,372,000 — s stockholders' equity was a deficit of $4,372,000 as of March 31, 2025 and that the Staff
- $1.75 million — exchange for the Company establishing a $1.75 million escrowed settlement fund to cover payme
- $1.15 million — insurers to directly fund approximately $1.15 million of the settlement fund. The Company est
- $600,000 — s that it will contribute approximately $600,000 to the settlement fund as its remaining
Filing Documents
- form10-k.htm (10-K) — 1483KB
- ex-4vi.htm (EX-4.VI) — 39KB
- ex23-1.htm (EX-23.1) — 5KB
- ex23-2.htm (EX-23.2) — 5KB
- ex31-1.htm (EX-31.1) — 16KB
- ex31-2.htm (EX-31.2) — 16KB
- ex32-1.htm (EX-32.1) — 7KB
- ex32-2.htm (EX-32.2) — 7KB
- 0001493152-25-013771.txt ( ) — 7090KB
- flux-20250630.xsd (EX-101.SCH) — 45KB
- flux-20250630_cal.xml (EX-101.CAL) — 67KB
- flux-20250630_def.xml (EX-101.DEF) — 207KB
- flux-20250630_lab.xml (EX-101.LAB) — 476KB
- flux-20250630_pre.xml (EX-101.PRE) — 377KB
- form10-k_htm.xml (XML) — 941KB
BUSINESS
BUSINESS 5 ITEM 1A.
RISK FACTORS
RISK FACTORS 17 ITEM 1B. UNRESOLVED STAFF COMMENTS 30 ITEM 1C. CYBERSECURITY 30 ITEM 2.
PROPERTIES
PROPERTIES 31 ITEM 3.
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS 31 ITEM 4. MINE SAFETY DISCLOSURES 32 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 33 ITEM 6. RESERVED 33 ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 34 ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 42 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 42 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 42 ITEM 9A
CONTROLS AND PROCEDURES
CONTROLS AND PROCEDURES 42 ITEM 9B. OTHER INFORMATION 44 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENTS INSPECTIONS 44 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 45 ITEM 11.
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION 45 ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 45 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 45 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 45 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 46 ITEM 16. FORM 10-K SUMMARY 48
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS F-1 2 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements. The 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." These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned "Risk Factors" below. In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "would," and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. You should read these factors and the other cautionary factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating