Flux Power Holdings, Inc.
For the period ended Sep 30, 2026. Filed Nov 3, 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.
Sep 30, 2026 · Filed Nov 3, 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 2026-03-31; filed 2026-05-07.
0001493152-26-021709
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-03.
0001493152-26-049786
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 94 previous paragraphs and 91 current paragraphs.
25 unchanged; 38 reworded; 26 added; 24 removed; 7 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 5 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 (26)
Current report
As of September 30, 2026 our order backlog was approximately $2.6 million. The following table presents our order, shipment and backlog history for the last six quarters:
Current report
In addition, in an effort to execute on our strategy of expanding the applications we serve, extending our fleet intelligence capabilities and creating additional opportunities for growth across the material handling and airport GSE markets, we recently announced three new product innovations, including: (i) adding integrated gas detection to our airport GSE battery lines, (ii) continuing to expand our flagship S-Series category with two new S24 configurations and (iii) introducing SkyVOX, which extends our fleet intelligence capabilities with battery location and intelligent charging alerts.
Current report
On July 24, 2026, the Listing Qualifications Department (the “Staff”) of Nasdaq notified (the “July 2026 Notice”) us that for 30 consecutive business days preceding the date of the July 2026 Notice, the bid price of our common stock had closed below the $1.00 per share minimum required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The July 2026 Notice has no effect on our listing of our common stock at this time, and shares of our common stock continue to trade on the Nasdaq Capital Market under the symbol “FLUX”.
Current report
Under Nasdaq Listing Rule 5810(c)(3)(A), the we have 180 calendar days following the date of the July 2026 Notice to regain compliance with the Minimum Bid Price Requirement (the “Compliance Period”). If at any time during the Compliance Period the closing bid price of shares of common stock is at least $1.00 for a minimum of 10 consecutive business days, compliance with the Minimum Bid Price Requirement will be regained and our common stock will continue to be eligible for listing on the Nasdaq Capital Market absent noncompliance with any other requirement for continued listing.
Current report
If we do not regain compliance with the Minimum Bid Price Requirement by the end of the Compliance Period, the Nasdaq may afford us an additional 180 calendar days to regain compliance with the Minimum Bid Price Requirement (the “Additional Compliance Period”) if on the last day of the Compliance Period our stock price is in compliance with the market value of publicly held shares requirement for continued listing as well as all other standards for initial listing of our common stock on the Nasdaq Capital Market (other than the Minimum Bid Price Requirement), unless we do not indicate our intent to cure the deficiency, or if it appears to Nasdaq that it is not possible for the deficiency to be cured.
Current report
We intend to monitor the closing bid price of our common stock and may, if appropriate, consider implementing available options, including the option to implement a reverse stock split, in order to regain compliance with the Minimum Bid Price Requirement. There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement during the Compliance Period, secure an Additional Compliance Period to regain compliance or regain or maintain compliance with the other Nasdaq continued listing requirements.
Current report
The Monitoring Period expired on October 14, 2026, however, our stockholders’ deficit as of September 30, 2026 did not comply with the Stockholder’s Equity Requirement and we no longer complied with the Market Equity Requirement or any of the other standards set forth in Rule 5550(b). While we did not receive any notifications from the Staff of Nasdaq with respect to our noncompliance with the standards set forth in Rule 5550(b) prior to the expiration of the Monitoring Period and have not received any such notifications as of the date of this Quarterly Report, we cannot predict how the Staff of Nasdaq will view the timing of our noncompliance with the Stockholder’s Equity Requirement reported in this Quarterly Report. While this Quarterly Report was filed after the expiration of the Monitoring Period, this Quarterly Report reports our stockholders’ deficit as of September 30, 2026, a date prior to the expiration of the Monitoring Period. If the Staff of Nasdaq were to view our noncompliance with the Stockholder’s Equity Requirement reported in this Quarterly Report as occurring prior to the expiration of the Monitoring Period, then the Staff of Nasdaq will issue a delist determination letter and we will have an opportunity to request a new hearing. If the Staff of Nasdaq were to view our noncompliance with the Stockholder’s Equity Requirement reported in this Quarterly Report as occurring after the expiration of the Monitoring Period, then we would likely instead receive a notice of noncompliance from the Staff of Nasdaq affording us an opportunity to submit a plan to regain compliance.
Current report
Committed Equity Facility
Current report
On May 15, 2026, we entered into a purchase agreement (the “CEF Purchase Agreement”) and a related registration rights agreement with Roth Principal Investments, LLC (“Roth”). Subject to the terms and conditions of the CEF Purchase Agreement, we may, in our sole discretion, sell to Roth up to $40,000,000 of shares of common stock from time to time during the term of the CEF Purchase Agreement (the “Committed Equity Facility”). We are under no obligation to sell any shares, and Roth is required to purchase shares only as directed by us.
Current report
Pursuant to the CEF Registration Rights Agreement, we filed a registration statement to register the resale of up to 38,461,538 shares of common stock.
Current report
From and after June 4, 2026, and for a period of up to 36 months (the “Commitment Period”), unless earlier terminated, we may direct Roth Principal Investments to purchase shares of common stock through one or more “Market Open Purchases”, “Intraday Purchases”, “Pre-Market Purchases” or “Post-Market Purchases”, each subject to the terms, conditions, notice requirements, and limitations set forth in the CEF Purchase Agreement, including the requirement that the closing sale price of our common stock on the trading day immediately prior to the applicable purchase date is not less than the threshold price of $0.50 (the “Threshold Price”).
Current report
The per share purchase price for shares sold in a Market Open Purchase, an Intraday Purchase, a Pre-Market Purchase or a Post-Market Purchase is based on the volume weighted average price (“VWAP”) of our common stock during the applicable valuation period, less a fixed 3.0% discount in the case of a Market Open Purchase or an Intraday Purchase or less a fixed 5.25% discount in the case of a Pre-Market Purchase or a Post-Market Purchase, subject, in each case, to the applicable minimum price thresholds and other adjustments set forth in the CEF Purchase Agreement. There is no upper limit on the per share price that Roth Principal Investments may be required to pay.
Current report
We control the timing and amount of any sales under the CEF Purchase Agreement. Actual sales, if any, will depend on market conditions, the trading price of our common stock and our determination of capital needs. No shares were transacted during the three months ended September 30, 2026.
Current report
As of October 30, 2026, the closing sale price of our common stock on the Nasdaq Capital Market was $0.43 per share. Given that the closing price of our common stock is currently below the Threshold Price of $0.50, we cannot direct Roth to purchase shares pursuant to the CEF Purchase Agreement until the closing price of our common stock exceeds the Threshold Price or we can amend the CEF Purchase Agreement to decrease the Threshold Price to a price below the closing price of our common stock. There can be no assurances if or when our common stock will begin trading at a price that will exceed the Threshold Price or we will be able to amend the CEF Purchase Agreement to decrease the Threshold Price.
Current report
Revenues for the quarter ended September 30, 2026 were $6,758,000 compared to $13,175,000 for the quarter ended September 30, 2025. The decrease of $6,417,000, or 49%, was driven by lower volumes in both the material handling and ground support markets as well as lower average selling prices across both markets. The reduced volume can be attributed to business uncertainties affecting our customers and higher fuel prices.
Current report
Cost of sales for the quarter ended September 30, 2026 was $5,085,000, or 75% of revenue, compared to $9,410,000, or 71% of revenue, for the quarter ended September 30, 2025.
Current report
Sales, General and Administrative Expenses
Current report
Sales, general and administrative expenses for the quarter ended September 30, 2026 were $4,001,000 compared to $4,906,000 for the quarter ended September 30, 2025. The decrease of $905,000, or 18%, was primarily due to reduced salaries from lower headcount, bonuses, professional fees, and shipping related costs.
Current report
As of September 30, 2026, we had an accumulated deficit of $117.0 million. To date, our business has not generated sufficient cash to fund our operations. However, given our backlog of $2.6 million as of September 30, 2026, we anticipate that revenue growth coupled with improvement in our gross margin and lower operating expenses will move us closer to profitability and improve our cash flow. Our gross margin improvement plan includes, but is not limited to, efforts to reduce product costs. We received new orders during fiscal 2026 of approximately $35.9 million and $5.6 million during the first quarter of fiscal 2027.
Current report
GBC Credit Facility
Current report
As of September 30, 2026, we had an outstanding balance of $6.3 million and $9.7 million remaining available under our $16.0 million GBC Credit Facility subject to borrowing base limitations. As discussed in Note 7 – Line of Credit, on March 31, 2026, we notified GBC that we failed to comply with the minimum EBITDA financial covenant for the trailing three-month period ended February 28, 2026 under the GBC Credit Facility, which resulted in an “event of default” under the GBC Credit Facility. On September 17, 2026, we entered into Amendment No. 7 (the “Seventh Amendment”) to the Loan and Security Agreement with GBC. Notwithstanding the Seventh Amendment, we remain in default under the GBC Credit Facility and GBC has reserved all of its rights and remedies under the GBC Credit Facility. While GBC may continue advancing funds under the GBC Credit Facility despite our event of default, it is under no obligation to do so. In addition, under the Seventh Amendment, we are required to raise at least $4.0 million of net proceeds from the sale of our equity interests within 50 days of the date of the Seventh Amendment (the “Equity Raise Requirement”) and meet certain reporting requirements as well as certain financial performance requirements.
Current report
Our ability to raise proceeds from sales of our equity interests is subject to market and other conditions, many of which are out of our control, and there can be no assurance that we will be able to comply with the Equity Raise Requirement or the other terms of the Seventh Amendment on a timely basis or at all. If we are unable to satisfy the Equity Raise Requirement on a timely basis, it will be an immediate event of default under the GBC Credit Facility. Thus, if we are unable to comply with the terms of the Seventh Amendment, including the Equity Raise Requirement, we will need to seek a waiver from GBC and there can be no assurances that we will be able to obtain a waiver from GBC on terms favorable to us or at all. While GBC has allowed us to continue to use our line of credit under the GBC Credit Facility, subject to its discretion, and has not called the debt despite our current event of default under the GBC Credit Facility, GBC can choose to limit or discontinue availability and/or call the debt at any time. In addition, if we fail to satisfy the Equity Raise Requirement and have another event of default under the GBC Credit Facility, GBC may be more likely to discontinue availability, call the debt and/or exercise its rights as a secured party under the GBC Credit Facility.
Current report
Equity
Current report
Going Concern
Current report
Cash Flow Summary
Current report
In addition, adjustments were made to our previously reported Financial Statements for interim periods for the fiscal year ending June 30, 2026 in accordance with FASB ASC 250 – Accounting Changes and Error Corrections. Such reclassifications consist of certain previously reported amounts in order to conform on a comparable basis with our current Financial Statement presentation. The reclassifications had no effect on previously reported net income, total assets, stockholders’ equity or cash flows. Management presents current and comparative results of operations with a disaggregation of intangible assets from other fixed assets and a disaggregation of interest expense from other expense.
Removed paragraphs (24)
Previous report
The following table summarizes the new orders, shipments, and backlog activities for the last six (6) fiscal quarters:
Previous report
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 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.
Previous report
Private Placement and Public Offering Fundraising
Previous 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.
Previous report
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 report
Selling and Administrative Expenses
Previous report
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 report
The following table represents our unaudited condensed consolidated statement of operations for the nine months ended March 31, 2026 and 2025.
Previous report
Revenues
Previous 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.
Previous report
Cost of Sales
Previous report
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 report
Gross Profit
Previous report
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 report
Selling and Administrative Expenses
Previous report
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 report
Research and Development Expense
Previous report
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 report
Interest Expense, net
Previous report
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 report
Net Loss
Previous report
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 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.
Reworded paragraphs (38)
Previous wording
The following discussion provides information which management believes is relevant to an assessment and understanding of the Company’s results of operations and financial condition. The discussion should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and Part II, Item 7, Management’s Discussion and Analysis of Financial condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
Current wording
The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and Part II, Item 7, Management’s Discussion and Analysis of Financial condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
Previous wording
We design, develop, manufacture and sell a portfolio of advanced lithium-ion energy storage solutions for electrification of a range of industrial and commercial sectors which include material handling and airport ground support equipment (“GSE”). We believe our mobile energy storage solutions provide our customers a reliable, high performing, cost effective, and more environmentally friendly alternative as compared to traditional lead acid and propane-based solutions. Our modular and scalable design allows different configurations of lithium-ion energy storage solutions to be paired with our proprietary wireless battery management system to provide the level of energy storage required and “state of the art” real time monitoring of pack performance. We believe that the increasing demand for lithium-ion energy storage solutions and more environmentally friendly energy storage solutions in the material handling sector should continue to drive our revenue growth.
Current wording
We design, develop, manufacture and sell a portfolio of advanced lithium-ion energy storage solutions for electrification of a range of industrial and commercial sectors which include material handling and airport ground support equipment (“GSE”). We believe our mobile energy storage solutions provide our customers with a reliable, high performing, cost effective and more environmentally friendly alternative as compared to traditional lead acid and propane-based solutions. Our modular and scalable design allows different configurations of lithium-ion energy storage solutions which are paired with our proprietary wireless battery management system to provide the level of energy storage required and “state of the art” real-time monitoring of battery pack performance. We believe that the growing demand for lithium-ion energy storage solutions and more environmentally friendly energy storage solutions across a range of industrial and commercial sectors should continue to drive growth in the markets we serve.
Previous wording
Our long-term strategy is to meet the rapidly growing demand for lithium-ion energy solutions and to be the supplier of choice, targeting large companies having energy storage needs. We have established selling relationships with customers with large fleets of forklifts and GSE. We intend to reach this goal by investing in research and development to expand our product mix, by expanding our sales and marketing efforts, improving our customer support efforts and improving production efficiencies. Our research and development efforts will continue to focus on providing adaptable, reliable and cost-effective energy storage solutions for our customers. We have received two patents, with an additional patent pending, on advanced technology related to lithium-ion energy storage solutions. The technology behind these pending patents is designed to:
Current wording
Our long-term strategy is to meet the rapidly growing demand for lithium-ion energy solutions and to be the supplier of choice, targeting large companies having energy storage needs. We have established selling relationships with customers with large fleets of forklifts and GSE. We intend to reach this goal by investing in research and development to expand our product mix, by expanding our sales and marketing efforts, by improving our customer support efforts and by improving production efficiencies. Our research and development efforts will continue to focus on providing adaptable, reliable and cost-effective energy storage solutions for our customers. We have received three patents on advanced technology related to lithium-ion energy storage solutions. The technology behind these patents is designed to:
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 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.
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 the 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.
Previous wording
“Backlog” represents the amount of anticipated revenues, at a given point in time, we may recognize in the future from existing contractual orders with customers that are in progress and have not yet shipped. Backlog values may not be indicative of future operating results as orders may be cancelled, modified or otherwise altered by customers. In addition, our ability to realize revenue from our backlog will be dependent on the delivery of key parts from our suppliers and our ability to manufacture and ship our products to customers in a timely manner and otherwise fulfill our contractual obligations. There can be no assurance that outstanding customer orders will be fulfilled as expected and that our backlog will result in future revenues.
Current wording
A useful measure of our relative financial condition consists of the analysis of our historical backlog in comparison to the current period. “Backlog” represents the amount of anticipated revenues we may recognize in the future from existing contractual orders with customers that are in progress and have not yet shipped. Backlog values may not be indicative of future operating results as orders may be cancelled, modified or otherwise altered by customers. In addition, our ability to realize revenue from our backlog will be dependent on the delivery of key parts from our suppliers and our ability to manufacture and ship our products to customers in a timely manner. There can be no assurance that outstanding customer orders will be fulfilled as expected or that our backlog will result in future revenues.
Previous 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.
Current wording
Toward the second half of fiscal 2025, we began experiencing a slowdown in new orders for our energy storage solutions. The slowdown reflected deferrals of new forklift purchases by selected large customer fleets due to lower capital spending and interest rate variability, and it continued throughout fiscal 2026 and into fiscal 2027. Some customers attributed their lower capital spending to concerns over the economy, uncertainty of higher interest rates, as well as to 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 by our customers required us to implement new selling strategies and to focus on cost controls and expense reduction.
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 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.
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, to lower costs from increasing sources and to control delivery times, all of which are now 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 position. We are highly focused on expanding selling and marketing initiatives to secure new customer relationships and support continued migration to lithium of current customers. 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 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.
Current wording
Since January 2025, the U.S. government has increased certain existing import tariffs and has implemented new import tariffs across a wide range of countries at various rates, including on product imports from almost all countries, and has implemented individualized higher tariffs on certain countries, notably China. While we have been able to offset some of the impact of the enacted tariffs with supply chain adjustments, alternative manufacturing locations, cost reduction actions and by increasing the selling prices of our products, we believe that tariffs have negatively impacted our revenues, profitability and cash flows. 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, as well as a key decision by the U.S. Supreme Court which invalidated certain tariffs. In response to the U.S. Supreme Court ruling, the current 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. Upon the expiration of such tariffs, the current administration announced new tariffs under a different statutory authority.
Previous wording
We import a portion of our raw materials and components from countries that are subject to these import tariffs imposed by the U.S. government, in particular materials and components that are from China. While we have been able to offset some of the impact of enacted tariffs with supply chain adjustments, alternative manufacturing locations, cost reduction actions and by increasing selling prices of our products, we believe that tariffs have negatively impacted our revenues, profitability and cash flows. Management continues to actively evaluate ways to mitigate the impacts of tariffs on business and financial results, however, due to the uncertainties pertaining to tariffs and tariff levels, it is difficult for us to reliably forecast the extent of the ongoing impact to our business or to our customers.
Current wording
We continue to actively evaluate ways to mitigate the impacts of tariffs on our business and financial results, however, due to the uncertainties pertaining to tariffs and tariff levels, it is difficult for us to reliably forecast the extent of the ongoing impact to our business or customers.
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 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.
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 further 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.
Previous wording
If tariffs escalate or global inflationary trends persist, our customers may face greater economic strain, which could in turn affect demand for our products and negatively impact our revenues. We remain focused on maintaining operational flexibility and adapting our supply chain to navigate these uncertainties and support long-term business performance. See “Risk Factors” under Part II, Item 1A of this Quarterly Report for additional information.
Current wording
If tariffs continue to escalate or global inflationary trends persist, our customers may face greater economic strain, which could in turn affect demand for our products. We remain focused on maintaining operational flexibility and adapting our supply chain to navigate these uncertainties to support long-term business performance. See Part I, Item 1A – Risk Factors for additional information.
Previous wording
The Nasdaq Stock Market LLC (“Nasdaq”) requires that for continued listing on the Nasdaq Capital Market, a company must continue to meet all the requirements set forth in Rule 5550(a) and at least one of the standards set forth in Rule 5550(b). The standards set forth in 5550(b) include (i) having a minimum of $2,500,000 in stockholders’ equity (the “Stockholders’ Equity Requirement”), (ii) a market value of listed securities of at least $35,000,000 (the “Market Equity Requirement”), or (iii) net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years (the “Net Income Requirement”).
Current wording
In addition, in the past we have failed to comply with and are currently not in compliance with other Nasdaq continued listing requirements. Nasdaq requires that for continued listing on the Nasdaq Capital Market, we must meet all the requirements set forth in Rule 5550(a) and at least one of the standards set forth in Rule 5550(b). The standards set forth in 5550(b) include having (i) a minimum of $2,500,000 in stockholders’ equity (the “Stockholders’ Equity Requirement”), (ii) a market value of listed securities of at least $35 million (the “Market Equity Requirement”), or (iii) net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years (the “Net Income Requirement”). As previously disclosed, on January 31, 2025 the Staff of Nasdaq notified us that we did not comply with the Stockholders’ Equity Requirement. On March 17, 2025, we filed our plan with Nasdaq to regain compliance with the Stockholders’ Equity Requirement, which included requesting an extension through July 30, 2025. On July 31, 2025, due to non-compliance with the Stockholders’ Equity Requirement, the Staff informed us that trading of our common stock would be suspended at the opening of business on August 11, 2025 unless we requested an appeal of the Staff’s determination to the Panel. We requested an appeal hearing with the Panel, and the Panel determined to grant us an exception to demonstrate compliance with the Stockholders’ Equity Requirement and granted us our request for continued listing, which extension was subject to, among other requirements, the Company demonstrating compliance with the Stockholder’s Equity Requirement on or before October 31, 2025. However, on October 14, 2025, we received a notification from the Staff of Nasdaq that we had regained compliance with Nasdaq’s continued listing requirements because we met the Market Equity Requirement. The October 2025 Notification also provided that, for a period of one year (the “Monitoring Period”), the Staff of Nasdaq will monitor our compliance with the continued listing requirements. If, during the Monitoring Period, we fail to comply with Rule 5550(b), the Staff of Nasdaq will issue a delist determination letter and we will have an opportunity to request a new hearing.
Previous wording
As of March 31, 2026, we also satisfied the Stockholder’s Equity Requirement, however, we can provide no assurances that we will be able to continue to comply with either the Market Equity Requirement or the Stockholder’s Equity Requirement. If the Company fails to comply with the Nasdaq continued listing requirements, the Company’s common stock will be subject to delisting by Nasdaq. In the event our common stock is delisted, our stock price and market liquidity of our stock will be adversely affected which will impact the ability of the Company’s stockholders to sell securities in the market. Further, delisting from Nasdaq could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers and employees.
Current wording
If we fail to regain compliance with the Minimum Bid Price Requirement and/or fail to regain compliance with at least one of the Rule 5550(b) continued listing requirements, our common stock will be subject to delisting by Nasdaq. In the event our common stock is delisted, the stock price and market liquidity of our common stock will be adversely affected, which will impact the ability of our stockholders to sell securities in the market. Further, delisting from Nasdaq could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers and employees.
Previous wording
The following table represents our unaudited condensed consolidated statement of operations for the three months ended March 31, 2026 and 2025.
Current wording
The following table represents a summary of our unaudited condensed consolidated statement of operations for the three months ended September 30, 2026 and 2025.
Previous wording
Historically our product focus has been on material handling equipment, reflecting a mix of walkie pallet jacks and higher capacity packs for Class 1, 2, and 3 forklifts. Over the past two years, we expanded our product offering into adjacent applications, including airport GSE. The launch of larger packs over the past two years has shifted our portfolio mix to include packs with higher average selling prices as compared to our historical mix. We believe that we are well positioned to address the needs of many segments within the material handling sector in light of our modular and scalable energy storage solution design coupled with our proprietary battery management system that can be coupled with our telemetry based “SkyBMS” product offering.
Current wording
Historically our product focus has been on material handling equipment, reflecting a mix of walkie pallet jacks and higher capacity packs for Class 1, 2, and 3 forklifts. Over the past three years, we expanded our product offering into adjacent applications, including airport ground support equipment. The launch of larger packs over the past three years has shifted our portfolio mix to include packs with higher average selling prices as compared to our historical mix. We believe that we are well positioned to address the needs of many segments within the material handling sector in light of our modular and scalable energy storage solution design coupled with our proprietary battery management system “SkyBMS” that can be coupled with our telemetry based product offering.
Previous 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.
Current wording
Gross profit for the quarter ended September 30, 2026 was $1,673,000, or 25% of revenue, compared to $3,765,000, or 29% of revenue, for the quarter ended September 30, 2025. The 382 basis point decrease in gross profit margin (gross profit as a percent of revenues) was primarily due to a reduction in average selling prices, higher warranty related costs, and a loss of operating leverage due to lower revenue.
Previous 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.
Current wording
Research and development expenses for the quarter ended September 30, 2026 were $631,000 compared to $1,037,000 for the quarter ended September 30, 2025. The decrease of $406,000, or 39%, was primarily due to decreased headcount and a lower level of R&D project activity based upon business needs.
Previous 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.
Current wording
Interest expense, net for the quarter ended September 30, 2026 was $184,000 compared to $333,000 for the quarter ended September 30, 2025. The decrease of $149,000 or 45% was primarily due to lower average balances outstanding under our credit facilities during the quarter ending September 30, 2026 as compared to the same period a year ago.
Previous 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.
Current wording
Net loss for the quarter ended September 30, 2026, was $3,170,000 compared to $2,562,000 for the quarter ended September 30, 2025. The increase in net loss was primarily due to the decrease in gross profit, partially offset by decreases in operating expenses.
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 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.
Current wording
Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is calculated by taking net loss and adding back the expenses related to interest, financing costs, income taxes, depreciation, amortization and stock-based compensation, each of which has been calculated in accordance with GAAP. Adjusted EBITDA was a loss of $2,566,000 for the quarter ended September 30, 2026 compared to a loss of $1,713,000 for the quarter ended September 30, 2025.
Previous wording
Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We also rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management team.
Current wording
Management believes that Adjusted EBITDA, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information about our period-over-period results. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We rely on Adjusted EBITDA as a primary measure to review and assess the operating performance of our company and our management team.
Previous wording
As Adjusted EBITDA is a non-GAAP financial measure, it should not be considered in isolation from, or construed as a substitute for, net income (loss) as determined in accordance with GAAP for the purpose of analyzing our operating performance or financial position.
Current wording
As Adjusted EBITDA is a non-GAAP financial measure, it should not be construed as superior to, or a substitute for, net loss as determined in accordance with GAAP for the purpose of analyzing our operating performance or financial position.
Previous wording
A reconciliation of Adjusted EBITDA to net income (loss) is included in the table below:
Current wording
A reconciliation of Adjusted EBITDA to net loss is included in the table below:
Previous 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.
Current wording
On September 15, 2025, we completed a private placement (the “Private Placement”) in which we sold 258,144 Preferred Stock Warrants and 1,214,766 Common Stock Warrants to purchase shares of our common pursuant to a securities purchase agreement, dated July 18, 2025, which we amended and restated on September 15, 2025, for proceeds of approximately $4,348,000, net of offering costs of $652,000, and the satisfaction of any and all of our obligations due to Cleveland under the Cleveland Note pursuant to the Debt Satisfaction Agreement.
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. 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 sold an additional 576,000 shares of our common stock at the public offering price, less underwriting discounts and commissions, pursuant to the subsequent exercise of the underwriter’s option 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 these unaudited condensed consolidated financial statements for additional information pertaining to the Private Placement and Public Offering.
Current wording
On May 15, 2026, we entered into the CEF Purchase Agreement with Roth, providing a discretionary Committed Equity Facility of up to $40.0 million. Beginning June 4, 2026, we may, at our option, sell shares of common stock to Roth at a price based on the VWAP of our common stock, less a fixed discount of either 3.0% or 5.25%, depending on the type of purchase, for a period of 36 months. As of June 30, 2026, we issued and sold 19,609 registered shares of common stock at an average price of $0.98 per share and received net proceeds of approximately $17,000 after offering costs of approximately $2,000. We issued no shares of common stock under the Committed Equity Facility in the three months ended September 30, 2026. Given that the closing price of our common stock is currently less than the Threshold Price, we currently cannot direct Roth to purchase any shares of our common stock under the CEF Purchase Agreement. See Note 9 – Stockholders’ Equity (Deficit) to the condensed consolidated financial statements for additional information pertaining to the Private Placement, the Public Offering and the Committed Equity Facility.
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. 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.
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 we believe is available under the GBC Credit Facility, subject to certain restrictions, covenants and borrowing base limitations and GBC allowing us to continue to have access to our line of credit under the GBC Credit Facility despite our event of default.
Previous wording
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 wording
The following table represents a summary of our unaudited condensed consolidated statement of cash flows for the three months ended September 30, 2026 and 2025.
Previous 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.
Current wording
Net cash provided by operating activities was $423,000 for the three months ended September 30, 2026. The net loss of $3,170,000 was offset by $2,716,000 provided by changes in operating assets and liabilities and the add-back of $877,000 of non-cash operating costs. The primary changes in operating assets and liabilities were decreases in accounts receivable and inventories combined with an increase in accounts payable, partially offset by decreases in accrued expenses and office lease liabilities.
Previous 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.
Current wording
Net cash provided by operating activities was $889,000 for the three months ended September 30, 2025. The net loss of $2,562,000 was offset by $2,827,000 provided by changes in operating assets and liabilities and the add-back of $624,000 of non-cash operating costs. The primary changes in operating assets and liabilities were decreases in accounts receivable and inventory and an increase in accrued expenses, partially offset by a decrease in accounts payable and office leases payable.
Previous wording
Net cash used in investing activities for the nine months ended March 31, 2026 was $405,000, which consisted primarily of equipment purchases.
Current wording
Net cash used in investing activities for the three months ended September 30, 2026 was $122,000, which consisted primarily of equipment purchases.
Previous wording
Net cash used in investing activities for the nine months ended March 31, 2025 was $498,000, which consisted primarily of equipment purchases.
Current wording
Net cash used in investing activities for the three months ended September 30, 2025 was $163,000, which consisted of equipment purchases.
Previous 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.
Current wording
Net cash used in financing activities for the three months ended September 30, 2026 was $197,000, which primarily consisted of $18,000 in net repayments under the working capital line of credit, and the incursion of $158,000 in costs associated with the raising of capital.
Previous 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.
Current wording
Net cash used in financing activities for the three months ended September 30, 2025 was $472,000, which primarily consisted of $3,692,000 in net repayments under the working capital line of credit, partially offset by $3,227,000 of proceeds from issuance of prefunded preferred stock warrants and common stock warrants, net of issuance costs.
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 $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.
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 $117.0 million through September 30, 2026, and, for the three months ended September 30, 2026, incurred a net loss of $3.2 million and generated cash flows from operations of $0.5 million.
Previous wording
In addition, our ability to meet projected revenue targets and generate cash from operations has been impacted by delays 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.
Current wording
Our ability to meet projected revenue targets and generate cash from operations has been impacted by delays 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.
Previous 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.
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 while further increasing the prices of the Company’s products for new orders. 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.
Previous wording
The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited financial statements and revenues and expenses during the periods reported. Management has considered the implications of ongoing global events and related economic impacts to the estimates and assumptions used in the preparation of the consolidated financial statements. There is heightened volatility and uncertainty around tariff actions, supply chain performance and customer demand. However, the magnitude of such impact on the Company’s business and its duration is uncertain. The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of March 31, 2026 through the filing date of this quarterly report on Form 10-Q. Actual results could differ from those estimates. Information with respect to our critical accounting policies which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 filed with the SEC on September 17, 2025.
Current wording
The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited financial statements and revenues and expenses during the periods reported. Management has considered the implications of ongoing global events and related economic impacts to the estimates and assumptions used in the preparation of the condensed financial statements. There is heightened volatility and uncertainty around tariff actions, supply chain performance and customer demand. However, the magnitude of such impact on our business and its duration is uncertain. We are not aware of any specific event or circumstance that would require an update to estimates or adjustments to the carrying value of assets and liabilities as of September 30, 2026 through the filing date of this Quarterly Report. Actual results could differ from those estimates. Information with respect to our critical accounting policies which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 filed with the SEC on August 20, 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We believe that our existing cash of $0.4 million as of September 30, 2026 will not be sufficient to meet our anticipated capital requirements to fund planned operations for the next twelve months following the filing date of this Report, and since GBC can choose to limit our access to our line of credit under the GBC Credit Facility, call the debt and/or exercise other remedies available to it, which include, among other things, its rights as a secured party under the GBC Credit Facility at any time, substantial doubt exists about our ability to continue as a going concern over the 12 months following the filing date of this Report. See “Future Liquidity Needs” below andLiquidity and Financial Condition in Note 1 – Nature of Business to the condensed consolidated financial statements included in this Report for additional information.
Current report — wording carried from elsewhere
We believe that our existing cash of $0.4 million as of September 30, 2026 will not be sufficient to meet our anticipated capital requirements to fund planned operations for the next twelve months following the filing date of this Report, and since GBC can choose to limit our access to our line of credit under the GBC Credit Facility, call the debt and/or exercise other remedies available to it, which include, among other things, its rights as a secured party under the GBC Credit Facility at any time, substantial doubt exists about our ability to continue as a going concern over the 12 months following the filing date of this Report. SeeLiquidity and Financial Condition in Note 1 – Nature of Business to the condensed consolidated financial statements included in this Report for additional information.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
As previously disclosed, on January 31, 2025 the Listing Qualifications Department (the “Staff”) of Nasdaq notified us that we did not comply with the Stockholders’ Equity Requirement. On March 17, 2025, we filed our plan with Nasdaq to regain compliance with the Stockholders’ Equity Requirement, which included requesting an extension through July 30, 2025.
Previous report — wording carried elsewhere
On July 31, 2025, due to non-compliance with the Stockholders’ Equity Requirement, the Staff informed us that trading of the Company’s common stock would be suspended at the opening of business on August 11, 2025, unless we requested an appeal of the Staff’s determination to a Nasdaq Hearings Panel (the “Panel”).
Previous report — wording carried elsewhere
We requested an appeal hearing with the Panel and the Panel determined to grant us an exception to demonstrate compliance with the Stockholders’ Equity Requirement and granted us our request for continued listing, which extension was subject to, among other requirements, the Company demonstrating compliance with the Stockholder’s Equity Requirement on or before October 31, 2025.
Previous report — wording carried elsewhere
On October 14, 2025, we received a notification (the “Notification”) from the Staff of Nasdaq that we had regained compliance with Nasdaq’s continued listing rules because we met Market Equity Requirement. The Notification also provided that, for a period of one year, the Staff of Nasdaq will monitor our compliance with the continued listing requirements. If, during such one-year period, we fail to comply with Rule 5550(b), the Staff of Nasdaq will issue a delist determination letter and we will have an opportunity to request a new hearing.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
See Note 8 – Stockholders’ Equity (Deficit)to these unaudited condensed consolidated financial statements for additional information pertaining to the Private Placement and Public Offering.