Flux Power Holdings, Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
FLUX$0.32+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-12.
0001493152-26-006414
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001493152-26-021709
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 94 current paragraphs.
51 unchanged; 35 reworded; 8 added; 6 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
While we have experienced lower sales in the first nine months of fiscal 2026, we have not experienced a substantial difference in our year-over-year net loss, attributable primarily to two factors. First, management anticipated the potential global economic effects and the consequent business impacts of the imposition of U.S. tariffs and adjusted our business strategy and spending accordingly. Second, we are no longer burdened with the expenses associated with our financial statement restatement, which positively affected to our bottom line as compared to previous periods.
Current report
Revenues for the quarter ended March 31, 2026 were $6,588,000 compared to $16,742,000 for the quarter ended March 31, 2025. The decrease of $10,154,000, or 61%, was driven by our largest customer within material handling significantly cutting their capital expense budget, an increasing number of competitive market participants within the GSE market, and overall pricing pressures which were driven by cost increases from tariffs.
Current report
Interest Expense, net
Current report
Revenues for the nine months ended March 31, 2026 were $33,884,000 compared to $49,697,000 for the nine months ended March 31, 2025. The decrease of $15,813,000, or 32%, was driven by our largest customer within material handling significantly cutting their capital expense budget, an increasing number of competitive market participants within the GSE market, and overall pricing pressures which were driven by cost increases from tariffs.
Current report
Interest Expense, net
Current report
Net Loss
Current report
The following table represents a summary of our unaudited condensed consolidated statement of cash flows for the nine months ended March 31, 2026 and 2025.
Current report
Management has evaluated our expected cash and working capital requirements, which include, but are not limited to, investments in additional sales and marketing, research and development and capital equipment, as well as our expected funding sources, which include, but are not limited to, our existing cash, forecasted gross margin and funding available under the GBC Credit Facility, subject to certain restrictions, covenants and borrowing base limitations. Our borrowing base changes as qualified collateral fluctuates and, therefore, available funding under the GBC Credit Facility could be substantially lower. In addition, on March 31, 2026, we determined that we failed to comply with the minimum EBITDA financial covenant for the trailing three-month period ended March 31, 2026 under the GBC Credit Facility, which resulted in an “event of default” under the GBC Credit Facility. We are working with GBC to negotiate an amendment to the GBC Credit Facility or otherwise obtain a waiver from GBC. GBC has allowed us to continue to have access to our line of credit under the GBC Credit Facility while negotiations continue, however, GBC can choose to limit this access at any time until we can successfully negotiate an amendment to the GBC Credit Facility or obtain a waiver from GBC. While we have in the past successfully renegotiated the terms of the GBC Credit Facility, and are optimistic about our ability to do so again, there can be no assurances that we will be able to negotiate an amendment to the GBC Credit Facility or obtain a waiver from GBC on terms favorable to us or at all. In addition, upon the occurrence of an event of default under the GBC Credit Facility, GBC may, at its option, declare its commitments to us terminated and all our obligations under the GBC Credit Facility immediately due and payable, all without demand, notice or further action of any kind required on the part of GBC, and/or exercise other remedies available to it, which include, among other things, its rights as a secured party under the GBC Credit Facility. Since GBC can choose to limit our access to our line of credit under the GBC Credit Facility at any time and successful negotiation of an amendment to the GBC Credit Facility or a waiver from GBC cannot be guaranteed, substantial doubt exists about our ability to continue as a going concern over the 12 months following the filing date of this report on Form 10-Q.
Removed paragraphs (6)
Previous report
Revenues for the quarter ended December 31, 2025 were $14,121,000 compared to $16,830,000 for the quarter ended December 31, 2024. The decrease of $2,709,000, or 16%, was driven by a sales mix shift to lower-priced products and lower volume in the material handling market, partially offset by higher volumes in the ground support equipment market. The overall reduced volume can be attributed to business uncertainties affecting our customers, as discussed in “Business Updates” above.
Previous report
Interest Income (Expense), net
Previous report
Net Income (Loss)
Previous report
Revenues for the six months ended December 31, 2025 were $27,296,000 compared to $32,955,000 for the six months ended December 31, 2024. The decrease of $5,659,000, or 17%, was mainly attributed to lower volumes and a sales mix shift to lower priced models in material handling.
Previous report
Interest Income (Expense), net
Previous report
Cash Flow Summary
Reworded paragraphs (35)
Previous wording
Our largest sector of penetration thus far has been the material handling sector which we believe is a multi-billion-dollar addressable market. We believe this sector will provide us with an opportunity to grow our business as we enhance our product mix and service levels and grow our sales to large fleets of forklifts and GSE. Applications of our modular packs for other industrial and commercial uses, such as mobile energy storage systems, are providing additional current growth and further opportunities. We intend to continue to expand our supply chain and customer partnerships and seek further partnerships and/or acquisitions that provide synergy in order to meet our growth and “building scale” objectives.
Current wording
Our largest sector of penetration thus far has been the material handling sector which we believe is a multi-billion-dollar addressable market. We believe this sector will provide us with an opportunity to grow our business as we enhance both our product mix and service levels and to grow our sales to large fleets of forklifts and GSE. Applications of our modular packs for other industrial and commercial uses, such as mobile energy storage systems, are providing additional current growth and furthering opportunities. We intend to continue to expand our supply chain and customer partnerships and seek further partnerships and/or acquisitions that provide synergy in order to meet our growth and “building scale” objectives.
Previous wording
As of December 31, 2025, our order backlog was approximately $3.8 million. The decrease in part reflects certain significant customers reducing order patterns and other customers shifting to shorter order lead times in response to uncertainty over the economic impact of higher costs of global tariffs implemented by the U.S. government, as well as broader concerns over the economy and geopolitical uncertainty.
Current wording
As of March 31, 2026, our order backlog was approximately $5.3 million. Historical comparisons are difficult due to changing business conditions. The historical decrease in part reflects certain significant customers reducing order patterns and other customers shifting to shorter order lead times in response to uncertainty over the economic impact of higher costs of global tariffs implemented by the U.S. government, as well as broader concerns over the economy and geopolitical uncertainty.
Previous wording
In the second half of fiscal 2025, we experienced a slow down in new orders for our energy storage solutions, reflecting corresponding deferrals of new forklift purchases by selected large customer fleets due to lower capital spending and interest rate variability, and more recently, global tariff uncertainties. While we have had very few cancellations of existing purchase orders, some customers have revised their order terms to fiscal 2026. In addition, customers are placing fewer new orders for fiscal 2026. Some customers have attributed lower capital spending to concerns over the economy and the uncertainty of higher interest rates, as well as broader geopolitical uncertainty. More recently, the economic impacts and costs of higher global tariffs implemented by the U.S. government have negatively impacted new purchase orders. The impact of order deferrals has required additional selling strategies to support our targeted sales trajectory, as well as a continued focus on cost controls and reduced spending.
Current wording
Toward the second half of fiscal 2025, we began experiencing a slowdown in new orders for our energy storage solutions, reflecting corresponding deferrals of new forklift purchases by selected large customer fleets due to lower capital spending and interest rate variability. Customers are placing fewer new orders during fiscal 2026. Some customers have attributed lower capital spending to concerns over the economy and the uncertainty of higher interest rates, as well as broader geopolitical uncertainty. More recently, the economic impacts and costs of higher global tariffs implemented by the U.S. government have negatively impacted new purchase orders. The impact of order deferrals has required additional selling strategies to support our targeted sales trajectory, as well as a continued focus on cost controls and reduced spending.
Previous wording
We have seen improvements in our sourcing and purchasing activity, reflecting our efforts to expand and optimize our vendor strategy. Additional improvements include more secondary sources to minimize stock-outs, lower costs from increasing sources, and controlled delivery times, as reflected in our current inventory levels. With strategic supply chain and profitability improvement initiatives, lower costs and higher volume purchasing, we are targeting continued gross margin improvement. We are highly focused on expanding sales and marketing initiatives to secure new customer relationships and support the continued migration of current customers to lithium. We have recently added our second tier-one OEM private label battery program to supplement our strong OEM relationships and approvals. This collaboration marks a significant milestone for our S-Series line, which now includes products with the UL Type EE certification, which provides added safety and durability capabilities. We are also working with our distribution network to expand customer acquisition with direct-to-customer initiatives.
Current wording
We have seen improvements in our sourcing and purchasing activity, reflecting our efforts to expand and optimize our vendor strategy. Additional improvements include more secondary sources to minimize stock-outs, lower costs from increasing sources, and controlled delivery times, as reflected in our current inventory levels. With strategic supply chain and profitability improvement initiatives, lower costs and higher volume purchasing, we are lowering the cost of our products in order to improve our competitive positioning. We are highly focused on expanding sales and marketing initiatives to secure new customer relationships and support the continued migration of current customers to lithium. We have two private label battery programs and recently hired a Director of OEM Business Development to further strengthen our OEM relationships and to assist with OEM certifications and approvals. We are also working with our distribution network to expand customer acquisition with direct-to-customer initiatives.
Previous wording
Since January 2025, the U.S. government has increased certain existing import tariffs and implemented new import tariffs across a wide range of countries at various rates, including on product imports from almost all countries, and individualized higher tariffs on certain countries, notably China. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses.
Current wording
Since January 2025, the U.S. government has increased certain existing import tariffs and implemented new import tariffs across a wide range of countries at various rates, including on product imports from almost all countries, and individualized higher tariffs on certain countries, notably China. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses and all have been affected by various circuit court decisions and a key decision by the U.S. Supreme Court, which invalidated certain tariffs. In response to the U.S. Supreme Court ruling, the Trump administration debuted a system for repaying importers for tariffs struck down by the U.S. Supreme Court while also announcing the implementation of new tariffs under an alternative statutory authority and indicating a desire to further increase such tariffs and to seek to extend such tariffs under other statutes. The full impact of the U.S. Supreme Court’s ruling and the administration’s response, including the timing and extent of any refunds and the impact of the new tariffs, remains uncertain.
Previous wording
Trade-related disruptions can create further uncertainty and supply chain interruptions, which may result in last-minute procurement efforts at elevated cost. We are closely monitoring the fluid nature of proposed tariffs and any impact they may have on our operations and will continue to monitor macroeconomic conditions and evaluate the financial and operational impact of ongoing trade policy shifts. These risks could intensify depending on future developments and we are actively incorporating these considerations into our future operation planning, including assessing pricing actions, cost-control measures, and long-term sourcing strategies.
Current wording
Trade-related disruptions can create further uncertainty and supply chain interruptions, which may result in last-minute procurement efforts at elevated cost. We are closely monitoring the fluid nature of proposed tariffs and any impact they may have on our operations and will continue to monitor macroeconomic conditions and to evaluate the financial and operational impact of ongoing trade policy shifts. These risks could intensify depending on future developments and we are actively incorporating these considerations into our future operation planning, including assessing pricing actions, cost-control measures, and long-term sourcing strategies.
Previous wording
On September 15, 2025, we completed a Private Placement pursuant to which we sold 258,144 prefunded preferred stock warrants and 1,214,766 common warrants for approximately $4,355,000, net of offering costs of $645,000.
Current wording
On September 15, 2025, we completed a Private Placement in which we sold 258,144 Preferred Stock Warrants and 1,214,766 Common Stock Warrants for approximately $4,348,000, net of offering costs of $652,000, and consisting of $3,175,000 cash and $1,173,000 debt relief.
Previous wording
On November 3, 2025, we completed an underwritten public offering (the “Public Offering”) of 3,840,000 shares of our common stock at a public offering price of $2.50 per share, before underwriting discounts and commissions. In addition, we granted the underwriter a 30-day option to purchase up to an additional 576,000 shares of common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, which was subsequently exercised in full. Net proceeds received were approximately $9,760,000, after offering costs of approximately $1,280,000.
Current wording
On November 3, 2025, we completed an underwritten public offering (the “Public Offering”) of 3,840,000 shares of our common stock at a public offering price of $2.50 per share. In addition, we granted the underwriter a 30-day option to purchase up to an additional 576,000 shares of common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, which was subsequently exercised in full. Net proceeds received were approximately $9,760,000, after offering costs of approximately $1,280,000.
Previous wording
See Note 8 – Stockholders’ Equity (Deficit)to the unaudited condensed consolidated financial statements for additional information pertaining to the Private Placement and Public Offering.
Current wording
See Note 8 – Stockholders’ Equity (Deficit)to these unaudited condensed consolidated financial statements for additional information pertaining to the Private Placement and Public Offering.
Previous wording
Cost of sales for the quarter ended December 31, 2025 was 9,226,000, or 65% of revenues, compared to $11,367,000, or 68% of revenues, for the quarter ended December 31, 2024. The decrease in cost of sales as a percent of revenues was primarily due to lower warranty related costs, which were slightly offset by higher material costs resulting from import tariffs.
Current wording
Cost of sales for the quarter ended March 31, 2026 was $4,788,000, or 73% of revenues, compared to $11,455,000, or 68% of revenues, for the quarter ended March 31, 2025. The increase in cost of sales as a percent of revenues was primarily due to an increase in E&O reserve, a loss in operating leverage in labor and overhead due to lower revenue, with an increased warranty expense and a slight offset from lower raw material costs.
Previous wording
Gross profit for the quarter ended December 31, 2025 was $4,895,000, or 35% of revenues, compared to $5,463,000, or 32% of revenues, for the quarter ended December 31, 2024. The 300-basis point increase in gross profit margin (gross profit as a percent of revenues) was primarily due to a sales mix shift to higher margin products within material handling and lower warranty related costs, while slightly offset by higher material costs resulting from import tariffs.
Current wording
Gross profit for the quarter ended March 31, 2026 was $1,800,000, or 27% of revenues, compared to $5,287,000, or 32% of revenues, for the quarter ended March 31, 2025. The 500-basis point decrease in gross profit margin (gross profit as a percent of revenues) was primarily due to an increase in E&O reserve, a loss in operating leverage in labor, overhead, and warranty due to lower revenue with a slight offset from lower raw material costs.
Previous wording
Selling and administrative expenses for the quarter ended December 31, 2025 were $3,564,000 compared to $5,985,000 for the quarter ended December 31, 2024. The decrease of $2,421,000, or 40%, was primarily due to reductions in bonuses, executive severance, commission expenses, shipping expenses and professional fees, as the prior year included the cost of the multi-year restatement of previously filed financial statements.
Current wording
Selling and administrative expenses for the quarter ended March 31, 2026 were $4,168,000 compared to $5,717,000 for the quarter ended March 31, 2025. The decrease of $1,549,000, or 27%, was primarily due to a reduction in salaries and wages from lower headcount, bonuses, recruitment fees, commission expenses, shipping expenses and professional fees, as the prior year included the cost of the multi-year restatement of previously filed financial statements.
Previous wording
Research and development expenses for the quarter ended December 31, 2025 were $536,000 compared to $957,000 for the quarter ended December 31, 2024. The decrease of $421,000, or 44%, was primarily due to decreased headcount and a lower level of research and development project activity based upon business needs.
Current wording
Research and development expenses for the quarter ended March 31, 2026 were $623,000 compared to $1,147,000 for the quarter ended March 31, 2025. The decrease of $524,000, or 46%, was primarily due to decreased salaries and wages from a lower headcount and lower level of research and development project activity based upon business needs.
Previous wording
Interest income (expense), net for the quarter ended December 31, 2025 was $194,000 compared to $$408,000 for the quarter ended December 31, 2024. The decrease of $214,000, or 52%, was primarily due to lower average balances outstanding under our credit facilities during the quarter ended December 31, 2025 as compared to the same period a year ago.
Current wording
Interest expense, net for the quarter ended March 31, 2026 was $184,000 compared to $362,000 for the quarter ended March 31, 2025. The decrease of $178,000, or 49%, was primarily due to lower average balances outstanding under our credit facilities during the quarter ended March 31, 2026 as compared to the same period a year ago.
Previous wording
Net income for the quarter ended December 31, 2025 was $601,000 compared to a net loss of $1,887,000 for the quarter ended December 31, 2024. The $2,488,000 improvement to net income from net loss was primarily driven by the decrease in operating expenses and lower interest expense, partially offset by the decrease in gross profit.
Current wording
Net loss for the quarter ended March 31, 2026 was $3,175,000 compared to a net loss of $1,939,000 for the quarter ended March 31, 2025. The $1,236,000 increase to net loss was primarily driven by the decrease in gross profit, partially offset by a decrease in operating expenses and lower interest expense.
Previous wording
The following table represents our unaudited condensed consolidated statement of operations for the six months ended December 31, 2025 and 2024.
Current wording
The following table represents our unaudited condensed consolidated statement of operations for the nine months ended March 31, 2026 and 2025.
Previous wording
Cost of sales for the six months ended December 31, 2025 was $18,836,000, or 68% of revenues, compared to $22,274,000, or 68%, of revenues, for the six months ended December 31, 2024. The decrease of $3,638,000 was mostly attributed to lower sales volume and lower warranty related costs. Cost of sales as a percent of revenues remained at 68% as higher per unit costs due to tariffs were offset by lower warranty related costs per unit.
Current wording
Cost of sales for the nine months ended March 31, 2026 was $23,424,000, or 69% of revenues, compared to $33,729,000, or 68%, of revenues, for the nine months ended March 31, 2025. The decrease of $10,305,000 was mostly attributed to lower sales volume, lower labor from a lower headcount, and lower warranty related costs. Cost of sales as a percent of revenues increased as higher per unit costs due to tariffs were offset by lower warranty related costs per unit.
Previous wording
Gross profit for the six months ended December 31, 2025 was $8,660,000, or 32% of revenues, compared to $10,681,000 or 32% of revenues for the six months ended December 31, 2024 primarily due to lower sales volumes. Gross profit margin was unchanged year over year as a result of maintaining cost of sales at 68% of revenues.
Current wording
Gross profit for the nine months ended March 31, 2026 was $10,460,000, or 31% of revenues, compared to $15,968,000 or 32% of revenues for the nine months ended March 31, 2025 primarily due to lower sales volumes. Gross profit margin decreased 100 basis points year over year as a result of higher tariff costs per unit slightly offset by lower warranty costs per unit.
Previous wording
Selling and administrative expenses for the six months ended December 31, 2025 were $8,470,000 compared to $11,100,000 for the six months ended December 31, 2024. The decrease of $2,630,000, or 24%, was primarily due to reductions in bonuses, executive severance, commission expenses, shipping expenses and professional fees, as the prior year included the cost of the multi-year restatement of previously filed financial statements.
Current wording
Selling and administrative expenses for the nine months ended March 31, 2026 were $12,638,000 compared to $16,817,000 for the nine months ended March 31, 2025. The decrease of $4,179,000, or 25%, was primarily due to reductions in salaries and wages from a lower headcount and reductions in bonuses, executive severance, commission expenses, shipping expenses and professional fees, as the prior year included the cost of the multi-year restatement of previously filed financial statements.
Previous wording
Research and development expenses for the six months ended December 31, 2025 were $1,573,000 compared to $2,272,000 for the six months ended December 31, 2024. The decrease of $699,000, or 31%, was primarily due to decreased headcount and a lower level of research and development project activity based upon business needs.
Current wording
Research and development expenses for the nine months ended March 31, 2026 were $2,196,000 compared to $3,419,000 for the nine months ended March 31, 2025. The decrease of $1,223,000, or 36%, was primarily due to decreased salaries and wages from a lower headcount, lower bonuses, and a lower level of research and development project activity based upon business needs.
Previous wording
Interest income (expense), net for the six months ended December 31, 2025 was $578,000 compared to $865,000 for the six months ended December 31, 2024. The decrease of $287,000, or 33%, was primarily due to lower average borrowings under our credit facilities during the six months ended December 31, 2025 as compared to the same period a year ago.
Current wording
Interest expense, net for the nine months ended March 31, 2026 was $762,000 compared to $1,227,000 for the nine months ended March 31, 2025. The decrease of $465,000, or 38%, was primarily due to lower average borrowings under our credit facilities during the nine months ended March 31, 2026 as compared to the same period a year ago.
Previous wording
Net loss for the six months ended December 31, 2025, was $1,961,000 compared to $3,556,000 for the six months ended December 31, 2024. The decrease in net loss was primarily attributable to the decrease in operating expenses and interest, partially offset by the reduction in gross profit due to lower revenues.
Current wording
Net loss for the nine months ended March 31, 2026, was $5,136,000 compared to $5,495,000 for the nine months ended March 31, 2025. The decrease in net loss was primarily attributable to the decrease in operating expenses and interest, partially offset by the reduction in gross profit due to lower revenues.
Previous wording
Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is calculated by taking net income (loss) and adding back the expenses related to interest, income taxes, depreciation, amortization and stock-based compensation, each of which has been calculated in accordance with GAAP. Additionally, costs to restate prior periods, as presented in our Annual Report on Form 10-K filed for the year ended June 30, 2024, and litigation resulting from such restatements are also added back. Adjusted EBITDA was a gain of $1,463,000 for the quarter ended December 31, 2025, an increase of $1,333,000 compared to $130,000 for the quarter ended December 31, 2024. Adjusted EBITDA was a gain of approximately $55,000 for the six months ended December 31, 2025, an improvement of $297,000 over a loss of $242,000 for the six months ended December 31, 2024.
Current wording
Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is calculated by taking net income (loss) and adding back the expenses related to interest, income taxes, depreciation, amortization and stock-based compensation, each of which has been calculated in accordance with GAAP. Additionally, costs to restate prior periods, as presented in our Annual Report on Form 10-K filed for the year ended June 30, 2024, and litigation resulting from such restatements are also added back. Adjusted EBITDA was a loss of $2,508,000 for the quarter ended March 31, 2026, an increased loss of $1,973,000 compared to a loss of $535,000 for the quarter ended March 31, 2025 primarily resulting from an increase in net loss of $1,236,000 combined with no add-back for restatement costs, offset by $34,000 in stock-based compensation expense increase over the previous year’s quarter. Adjusted EBITDA was a loss of approximately $2,994,000 for the nine months ended March 31, 2026, an increased loss of $2,217,000 over a loss of $777,000 for the nine months ended March 31, 2025.
Previous wording
On September 15, 2025, we completed a Private Placement pursuant to which we sold 258,144 prefunded preferred stock warrants and 1,214,766 common warrants for approximately $4,355,000, net of offering costs of $645,000.
Current wording
On September 15, 2025, we completed a Private Placement in which we sold 258,144 Preferred Stock Warrants and 1,214,766 Common Stock Warrants for approximately $4,355,000, net of offering costs of $645,000.
Previous wording
On November 3, 2025, we completed an underwritten public offering (the “Public Offering”) of 3,840,000 shares of our common stock at a public offering price of $2.50 per share, before underwriting discounts and commissions. In addition, we granted the underwriter a 30-day option to purchase up to an additional 576,000 shares of common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, which was subsequently exercised in full. In total, proceeds received were approximately $9,760,000, net of offering costs of approximately $1,280,000.
Current wording
On November 3, 2025, we completed an underwritten public offering (the “Public Offering”) of 3,840,000 shares of our common stock at a public offering price of $2.50 per share. In addition, we granted the underwriter a 30-day option to purchase up to an additional 576,000 shares of common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments, which was subsequently exercised in full. In total, proceeds received were approximately $9,760,000, net of offering costs of approximately $1,280,000.
Previous wording
See Note 8 – Stockholders’ Equity (Deficit)to the unaudited condensed consolidated financial statements for additional information pertaining to the Private Placement and Public Offering.
Current wording
See Note 8 – Stockholders’ Equity (Deficit)to these unaudited condensed consolidated financial statements for additional information pertaining to the Private Placement and Public Offering.
Previous wording
Management has evaluated our expected cash and working capital requirements, which include, but are not limited to, investments in additional sales and marketing, research and development and capital equipment, as well as our expected funding sources, which include, but are not limited to, our existing cash, forecasted gross margin and funding available under the GBC Credit Facility, subject to certain restrictions, covenants and borrowing base limitations. Our borrowing base changes as qualified collateral fluctuates and, therefore, available funding under the GBC Credit Facility could be substantially lower. While we are in compliance with debt covenants under the GBC Credit Facility as of December 31, 2025 and up through and including the date of filing of this Report on Form 10-Q, we expect to be subject to a compliance covenant breach under the GBC Credit Facility in late February 2026. Therefore, we will need to negotiate an amendment to the GBC Credit Facility in order to have the ability to draw funds under the facility. Because successful negotiation of an amendment cannot be guaranteed and we may lose access to the line of credit under the GBC Credit Facility after the covenant breach, substantial doubt exists about our ability to continue as a going concern over the 12 months following the filing date of this Quarterly Report on Form 10-Q. See “Future Liquidity Needs” below andLiquidity and Financial Condition in Note 2 – Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements for additional information.
Current wording
Management has evaluated our expected cash and working capital requirements, which include, but are not limited to, investments in additional sales and marketing, research and development and capital equipment, as well as our expected funding sources, which include, but are not limited to, our existing cash, forecasted gross margin and funding available under the GBC Credit Facility, subject to certain restrictions, covenants and borrowing base limitations. Our borrowing base changes as qualified collateral fluctuates and, therefore, available funding under the GBC Credit Facility could be substantially lower. In addition, on March 31, 2026, we determined that we failed to comply with the minimum EBITDA financial covenant for the trailing three-month period ended March 31, 2026 under the GBC Credit Facility, which resulted in an “Event of Default” under the GBC Credit Facility. We are working with GBC to negotiate an amendment to the GBC Credit Facility or otherwise obtain a waiver from GBC. GBC has allowed us to continue to have access to our line of credit under the GBC Credit Facility while negotiations continue, however, GBC can choose to limit this access at any time we can successfully negotiate an amendment to the GBC Credit Facility or obtain a waiver from GBC. While we have in the past successfully renegotiated the terms of the GBC Credit Facility, and are optimistic about our ability to do so again, there can be no assurances that we will be able to negotiate an amendment to the GBC Credit Facility or obtain a waiver from GBC on terms favorable to us or at all. In addition, upon the occurrence of an Event of Default under the GBC Credit Facility, GBC may, at its option, declare its commitments to us terminated and all of our obligations under the GBC Credit Facility immediately due and payable, all without demand, notice or further action of any kind required on the part of GBC, and/or exercise other remedies available to it, which include, among other things, its rights as a secured party under the GBC Credit Facility. Since GBC can choose to limit our access to our line of credit under the GBC Credit Facility at any time and successful negotiation of an amendment to the GBC Credit Facility or a waiver from GBC cannot be guaranteed, substantial doubt exists about our ability to continue as a going concern over the 12 months following the filing date of this report on Form 10-Q. See “Future Liquidity Needs” below andLiquidity and Financial Condition in Note 1 – Summary of Significant Accounting Policies to these unaudited condensed consolidated financial statements for additional information.
Previous wording
Net cash used in operating activities was $4,274,000 for the six months ended December 31, 2025, which consisted of $1,961,000 net loss and $3,997,000 in changes in operating assets and liabilities, partially offset by $1,684,000 of non-cash operating costs. The primary changes in operating assets and liabilities were reductions in accounts receivable and inventories, partially offset by a decrease in accounts payable and accrued liabilities combined, office lease payments and an increase in other assets.
Current wording
Net cash used in operating activities was $5,665,000 for the nine months ended March 31, 2026, which consisted of $5,136,000 net loss and $2,700,000 in changes in operating assets and liabilities, partially offset by $2,171,000 of non-cash operating costs. The primary changes in operating assets and liabilities were reductions in accounts receivable and inventories, partially offset by a decrease in accounts payable and accrued liabilities combined, office lease payments and an increase in other assets.
Previous wording
Net cash provided by operating activities was $3,774,000 for the six months ended December 31, 2024, which consisted of $5,389,000 provided by changes in operating assets and liabilities and $1,941,000 of non-cash operating costs, partially offset by net loss of $3,556,000. The primary changes in operating assets and liabilities were a decrease in accounts receivable, a decrease in inventories and an increase in accounts payable and accrued expenses combined, partially offset by office lease payable payments.
Current wording
Net cash provided by operating activities was $2,208,000 for the nine months ended March 31, 2025, which consisted of $4,914,000 provided by changes in operating assets and liabilities and $2,789,000 of non-cash operating costs, partially offset by net loss of $5,495,000. The primary changes in operating assets and liabilities were a decrease in accounts receivable and an increase in accounts payable and accrued expenses combined, partially offset by office lease payable payments.
Previous wording
Net cash used in investing activities for the six months ended December 31, 2025 was $285,000, which consisted primarily of equipment purchases.
Current wording
Net cash used in investing activities for the nine months ended March 31, 2026 was $405,000, which consisted primarily of equipment purchases.
Previous wording
Net cash used in investing activities for the six months ended December 31, 2024 was $317,000, which consisted primarily of equipment purchases.
Current wording
Net cash used in investing activities for the nine months ended March 31, 2025 was $498,000, which consisted primarily of equipment purchases.
Previous wording
Net cash provided by financing activities for the six months ended December 31, 2025 was $4,153,000, which primarily consisted of $12,942,000 net cash proceeds from the Public Offering and the Private Placement, partially offset by $8,887,000 of net repayments under the working capital line of credit.
Current wording
Net cash provided by financing activities for the nine months ended March 31, 2026 was $5,108,000, which primarily consisted of $12,935,000 net cash proceeds from the Public Offering and the Private Placement, partially offset by $7,900,000 of net repayments under the working capital line of credit.
Previous wording
Net cash used in financing activities for the six months ended December 31, 2024 was $3,217,000, which primarily consisted of $4,141,000 in net repayments under the working capital line of credit, partially offset by $1,000,000 of subordinated debt borrowings.
Current wording
Net cash used in financing activities for the nine months ended March 31, 2025 was $1,848,000, which primarily consisted of $2,830,000 in net repayments under the working capital line of credit, partially offset by $1,000,000 of subordinated debt borrowings.
Previous wording
Historically, our revenues and operating cash flows have not been sufficient to sustain our operations and we have relied on debt and equity financing for additional funds. We have incurred an accumulated deficit of $108.3 million through December 31, 2025, and for the six months ended December 31, 2025 incurred a net loss of $2.0 million and utilized $4.3 million of cash in operating activities. As of December 31, 2025, we had a cash balance of $0.9 million and $11.3 million of available funding under the Gibraltar Business Capital (“GBC”) Credit Facility, subject to borrowing base limitations. Our borrowing base changes as qualified collateral fluctuates and, therefore, available funding under the GBC Credit Facility could be substantially lower.
Current wording
Historically, our revenues and operating cash flows have not been sufficient to sustain our operations and we have relied on debt and equity financing for additional funds. We have incurred an accumulated deficit of $111.5 million through March 31, 2026, and for the nine months ended March 31, 2026 incurred a net loss of $5.1 million and utilized $5.7 million of cash in operating activities. As of March 31, 2026, we had a cash balance of $0.4 million and $10.3 million of available funding under the Gibraltar Business Capital (“GBC”) Credit Facility, subject to borrowing base limitations. Our borrowing base changes as qualified collateral fluctuates and, therefore, available funding under the GBC Credit Facility could be substantially lower.
Previous wording
We have implemented reductions in labor and overhead costs and have increased selling prices of energy storage solutions, however, managementis evaluating strategies to further improve profitability of operations. Gross margin improvement tasks include, but are not limited to, a plan to drive bill of material costs down. We continue to execute cost reduction, sourcing and pricing recovery initiatives in efforts to increase gross margins and improve cash flow from operations. Unforeseen factors beyond management’s control, including economic uncertainty and the impact of global tariff initiatives, could potentially have a negative impact on the gross margin improvement plan. Management is continuing to evaluate other sources of capital to fund its operations and growth. However, there can be no assurance that we will be able to realize our plans for improved operations.
Current wording
We have implemented reductions in labor and overhead costs and have increased selling prices of energy storage solutions, however, management is evaluating strategies to further improve profitability of operations. Gross margin improvement tasks include, but are not limited to, a plan to drive bill of material costs down. We continue to execute cost reduction, sourcing and pricing recovery initiatives in efforts to increase gross margins and improve cash flow from operations. Unforeseen factors beyond management’s control, including economic uncertainty and the impact of global tariff initiatives, could potentially have a negative impact on the gross margin improvement plan. Management is continuing to evaluate other sources of capital to fund its operations and growth. However, there can be no assurance that we will be able to realize our plans for improved operations.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Management has evaluated our expected cash and working capital requirements, which include, but are not limited to, investments in additional sales and marketing, research and development and capital equipment, as well as our expected funding sources, which include, but are not limited to, our existing cash, forecasted gross margin and funding available under the GBC Credit Facility, subject to certain restrictions, covenants and borrowing base limitations. While we are in compliance with debt covenants under the GBC Credit Facility as of December 31, 2025 and up through and including the date of filing of this Report on Form 10-Q, we expect to be subject to a compliance covenant breach under the GBC Credit Facility in late February 2026. Therefore, we will need to negotiate an amendment to the GBC Credit Facility in order to have the ability to draw funds under the facility. Because successful negotiation of an amendment cannot be guaranteed and we may lose access to the line of credit under the GBC Credit Facility after the covenant breach, substantial doubt exists about our ability to continue as a going concern over the 12 months following the filing date of this Quarterly Report on Form 10-Q.