UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-31543

FLUX POWER HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Nevada		92-3550089
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

2685 S. Melrose Drive, Vista, California		92081
(Address of principal executive offices)		(Zip Code)

877-505-3589

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of registrant’s common stock outstanding as of March 10, 2025 was 16,682,465.

FLUX POWER HOLDINGS, INC.

FORM 10-Q

For the Quarterly Period Ended September 30, 2024

Table of Contents

PART I - Financial Information		5

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4.	CONTROLS AND PROCEDURES	31

PART II - Other Information		32

ITEM 1.	LEGAL PROCEEDINGS	32
ITEM 1A.	RISK FACTORS	33
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	34
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	34
ITEM 4.	MINE SAFETY DISCLOSURES	34
ITEM 5.	OTHER INFORMATION	34
ITEM 6.	EXHIBITS	34

SIGNATURES		35

Page 2

	●	our ability to continue as a going concern;

	●	our ability to comply with the terms of our agreement with Gibraltar Business Capital, LLC (“GBC”) for our credit facility, which we have relied on historically and currently rely on to meet our anticipated capital resources and to fund our operations;

	●	the expense, timing and outcome of legal proceedings relating to our accounting practices, financial disclosures and employment policies and practices, which includes, but is not limited to, a pending purported federal securities class action and shareholder derivative lawsuit, certain employment lawsuits and other legal and governmental proceedings, investigations and information requests that may be initiated or that may be asserted;

	●	our ability to meet projected revenue targets and generate cash from operations as a result of delays in new orders for our energy storage solutions, reflecting corresponding deferrals of new forklift purchases caused by lower capital spending in the market sector that we serve and interest rate variability affecting certain large customer fleets;

	●	our ability to remediate material weaknesses in our controls and procedures and also those identified in our internal control over financial reporting, or to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock price;

	●	our delinquent and untimely filings with the Securities and Exchange Commission and our ability to regain compliance and continue to meet the continued listing standards of the Nasdaq Stock Market;

	●	substantial unanticipated costs for accounting, legal and consultancy fees we incurred in connection with the restatements and internal investigation, and we expect to continue to incur additional costs;

	●	our ability to secure sufficient funding to support our current and proposed operations;

	●	our ability to manage our working capital requirements efficiently;

	●	our ability to obtain the necessary funds from our credit facilities;

	●	our ability to obtain raw materials and other supplies for our products at existing or competitive prices and on a timely basis;

	●	our anticipated growth strategies and our ability to manage the expansion of our business operations effectively;

	●	our ability to maintain or increase our market share in the competitive markets in which we do business;

	●	our ability to grow our revenue, increase our gross profit margin and become a profitable business;

	●	our ability to fulfill our backlog of open sales orders due to delays in the receipt of key component parts and other potential manufacturing disruptions;

	●	our ability to keep up with rapidly changing technologies and evolving industry standards, including our ability to achieve technological advances;

	●	our dependence on the growth in demand for our products;

	●	our ability to compete with larger companies with far greater resources than us;

	●	our ability to shift to new suppliers and incorporate new components into our products in a manner that is not disruptive to our business;

	●	our ability to obtain and maintain UL Listings and OEM approvals for our energy storage solutions;

	●	our ability to diversify our product offerings and capture new market opportunities;

	●	our ability to source our needs for skilled labor, machinery, parts, and raw materials economically;

	●	our ability to retain and/or successfully recruit key members of our senior management, including but not limited to recruitment of a new chief executive officer;

	●	our dependence on our major customers; and

	●	the impact of tariffs on our ability to cost-effectively source battery packs and materials used in our products.

	●	The “Company,” “Flux,” “we,” “us,” and “our” refer to the combined business of Flux Power Holdings, Inc., a Nevada corporation and its wholly owned subsidiary, Flux Power, Inc., a California corporation (“Flux Power”);

	●	“Exchange Act” refers the Securities Exchange Act of 1934, as amended;

	●	“SEC” refers to the Securities and Exchange Commission;

	●	“Securities Act” refers to the Securities Act of 1933, as amended;

	September 30,			June 30,
	2024			2024
ASSETS

Current assets:
Cash	$	559,000		$	643,000
Accounts receivable, net of allowance for credit losses		9,948,000			9,773,000
Inventories, net		15,342,000			16,977,000
Other current assets		1,001,000			945,000
Total current assets		26,850,000			28,338,000

Right of use assets		1,897,000			2,096,000
Property, plant and equipment, net		1,734,000			1,749,000
Other assets		118,000			118,000

Total assets	$	30,599,000		$	32,301,000

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	11,215,000		$	11,395,000
Accrued expenses		4,848,000			3,926,000
Line of credit		12,041,000			13,834,000
Subordinated debt		1,000,000			–
Deferred revenue		333,000			485,000
Customer deposits		34,000			18,000
Finance leases payable, current portion		160,000			156,000
Office leases payable, current portion		758,000			734,000
Accrued interest		145,000			126,000
Total current liabilities		30,534,000			30,674,000

Long term liabilities:
Finance leases payable, less current portion		71,000			112,000
Office leases payable, less current portion		1,122,000			1,321,000

Total liabilities		31,727,000			32,107,000

Stockholders’ equity (deficit):
Preferred stock, $0.001 par value; 500,000 shares authorized; none issued and outstanding		–			–
Common stock, $0.001 par value; 30,000,000 shares authorized; 16,682,465 shares issued and outstanding at September 30, 2024 and June 30, 2024		17,000			17,000
Additional paid-in capital		100,236,000			99,889,000
Accumulated deficit		(101,381,000	)		(99,712,000	)
Total stockholders’ equity (deficit)		(1,128,000	)		194,000
Total liabilities and stockholders’ equity (deficit)	$	30,599,000		$	32,301,000

	2024			2023
	Three months ended September 30,
	2024			2023
Revenues	$	16,125,000		$	14,787,000
Cost of sales		10,907,000			10,552,000

Gross profit		5,218,000			4,235,000

Operating expenses:
Selling and administrative		5,115,000			4,725,000
Research and development		1,315,000			1,295,000
Total operating expenses		6,430,000			6,020,000

Operating loss		(1,212,000	)		(1,785,000	)

Interest income (expense), net		(457,000	)		(403,000	)

Net loss	$	(1,669,000	)	$	(2,188,000	)

Net loss per share - basic and diluted	$	(0.10	)	$	(0.13	)

Weighted average number of common shares outstanding - basic and diluted		16,682,465			16,474,754


	Common Stock
	Shares		Capital Stock Amount		Additional Paid-in Capital		Accumulated Deficit			Total
Balance at June 30, 2024	16,682,465	$	17,000	$	99,889,000	$	(99,712,000	)	$	194,000
Stock-based compensation	-		-		347,000		-			347,000
Net loss	-		-		-		(1,669,000	)		(1,669,000	)
Balance at September 30, 2024	16,682,465	$	17,000	$	100,236,000	$	(101,381,000	)	$	(1,128,000	)

	September 30, 2024		June 30, 2024
Raw materials	$	11,584,000	$	12,850,000
Work in process		858,000		474,000
Finished goods		2,900,000		3,653,000
Total Inventories	$	15,342,000	$	16,977,000

	September 30, 2024		June 30, 2024
Payroll and bonus accrual	$	1,199,000	$	471,000
PTO accrual		424,000		437,000
Warranty liability		3,225,000		3,018,000
Total accrued expenses	$	4,848,000	$	3,926,000

	Number of Warrants		Weighted Average Exercise Price Per Warrant		Weighted Average Remaining Contract Term (# years)
Warrants outstanding and exercisable at June 30, 2024		1,413,110	$	6.14
Warrants issued		-		-
Warrants exercised		-		-
Warrants forfeited and cancelled		-		-
Warrants outstanding and exercisable at September 30, 2024		1,413,110		6.14		2.23

	2024			2023
	Three months ended September 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(1,669,000	)	$	(2,188,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		252,000			261,000
Stock-based compensation		347,000			276,000
Amortization of debt issuance costs		41,000			81,000
Non-cash lease expense		160,000			146,000
Inventory write downs		134,000			113,000
Changes in operating assets and liabilities:
Accounts receivable		(297,000	)		(2,040,000	)
Inventories		1,501,000			(546,000	)
Other assets		(97,000	)		(215,000	)
Accounts payable		(58,000	)		330,000
Accrued expenses		922,000			601,000
Accrued interest		19,000			100,000
Office leases payable		(175,000	)		(152,000	)
Deferred revenue		(152,000	)		205,000
Customer deposits		16,000			(65,000	)
Net cash provided by (used in) operating activities		944,000			(3,093,000	)

Cash flows from investing activities:
Purchases of equipment		(198,000	)		(181,000	)
Net cash used in investing activities		(198,000	)		(181,000	)

Cash flows from financing activities:
Proceeds from subordinated debt borrowing		1,000,000			–
Proceeds from revolving line of credit		13,755,000			18,055,000
Payment of revolving line of credit		(15,548,000	)		(15,981,000	)
Payment of finance leases		(37,000	)		(40,000	)
Net cash provided by (used in) financing activities		(830,000	)		2,034,000

Net change in cash		(84,000	)		(1,240,000	)
Cash, beginning of period		643,000			2,379,000

Cash, end of period	$	559,000		$	1,139,000

Supplemental cash flow information:

	2024		2023
	September 30,
	2024		2023
Stock options		1,520,118		939,170
RSUs		114,666		192,210
Warrants		1,413,110		1,371,914
Antidilutive securities		3,047,894		2,503,294

SEC Form 10-Q filed by Flux Power Holdings Inc.