Flux Power Holdings, Inc.
For the period ended Mar 31, 2025. Filed May 8, 2025.
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, 2025 · Filed May 8, 2025
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 2024-12-31; filed 2025-03-20.
0001493152-25-011034
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001641172-25-009264
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 92 previous paragraphs and 95 current paragraphs.
57 unchanged; 29 reworded; 9 added; 6 removed; 0 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 (9)
Current report
Business Trends and Uncertainties
Current report
During the quarter ended March 31, 2025, the U.S. government increased certain existing tariffs and implemented new tariffs on imported products. In April 2025, the U.S. government increased 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. Due to the uncertainties pertaining to tariffs and tariff levels, it is difficult for us to reliably forecast the short-term or ongoing impact to our business or that of our customers but is expected that tariffs would negatively impact our revenues, profitability and cash flows. Management is actively evaluating ways to mitigate potential impacts of tariffs.
Current report
We import a portion of our raw materials and components from countries that are subject to import tariffs imposed by the U.S. government, in particular materials and components that are from China. We expect to be able to offset some of the impact of the enacted tariffs with supply chain adjustments, alternative manufacturing locations and cost reduction actions. However, at current and anticipated tariff levels, we will also need to increase the selling prices of our products in order to achieve an acceptable profit margin. Imports from our supplier in China have been temporarily paused to allow us to explore new arrangements with them. In addition, we are actively pursuing alternative sourcing strategies.
Current report
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 report
If tariffs 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 and support long-term business performance. See “Risk Factors” under Part II, Item 1A for additional information.
Current report
Revenues for the quarter ended March 31, 2025 were $16,742,000 compared to $14,457,000 for the quarter ended March 31, 2024. The increase of $2,285,000 or 16% was driven by higher demand in both material handling and ground support markets, with unit growth of 10% and 25% respectively.
Current report
Selling and administrative expenses for the quarter ended March 31, 2025 were $5,717,000 compared to $5,311,000 for the quarter ended March 31, 2024. The increase of $406,000 or 8% was primarily attributable to professional fees associated with the multi-year restatement of previously filed financial statements and executive recruitment fees, partially offset by lower severance costs and stock-based compensation.
Current report
Revenues for the nine months ended March 31, 2025 were $49,697,000 compared to $47,447,000 for the nine months ended March 31, 2024. The increase of $2,250,000 or 5% was driven by an increase in ground support market products and higher average selling prices due to product mix, partially offset by lower material handling revenue which had higher volume year over year but lower average selling prices due to product mix.
Current report
Interest income (expense), net for the nine months ended March 31, 2025 was $1,227,000 compared to $1,285,000 for the nine months ended March 31, 2024. The decrease was primarily due to lower average balances outstanding under our credit facilities during the nine months ending March 31, 2025 as compared to the same period a year ago.
Removed paragraphs (6)
Previous report
Revenues for the quarter ended December 31, 2024 was $16,830,000 versus $18,203,000 for the quarter ended December 31, 2023. The decrease of $1,373,000 or 8% was driven by lower demand in the material handling market and lower average selling prices due to product mix.
Previous report
Revenues for the six months ended December 31, 2024 were $32,955,000 versus $32,990,000 for the six months ended December 31, 2023. Revenues were nearly flat with decreases in the material handling market being nearly offset by gains in the ground support market.
Previous report
Selling and administrative expenses for the six months ended December 31, 2024 were $11,100,000 versus $9,318,000 for the quarter six months December 31, 2023. The increase of $1,782,000 or 19% was primarily attributable to higher variable incentive compensation, severance and professional fees associated with the multi-year restatement of previously filed financial statements.
Previous report
Interest income (expense), net for the six months ended December 31, 2024 was $865,000 versus $852,000 for the six months ended December 31, 2023, relatively flat year over year.
Previous report
As of December 31, 2024, we had an existing cash balance of $0.9 million, $6.3 million available under our $16.0 million GBC Credit Facility, subject to borrowing base limitations, and $1.0 million available from Cleveland Capital under our $2.0 million 2023 Subordinated LOC.
Previous report
On January 22, 2025, we entered into Amendment No. 4 to the Loan and Security Agreement (the “Fourth Amendment”) with GBC which amended certain terms of the Loan and Security Agreement dated July 28, 2023, as amended, relating to the EBITDA Minimum financial covenant of the Company. In consideration for the Fourth Amendment, we agreed to pay GBC a non-refundable amendment fee of $50,000 in cash, as follows: (i) $25,000 paid on March 1, 2025, and (ii) $25,000 shall be due and payable on April 1, 2025.
Reworded paragraphs (29)
Previous wording
As of February 28, 2025, our order backlog was approximately $19.5 million and, in part, reflects current delays in orders of new forklifts due to a general slowing of capital spending by our customers.
Current wording
As of March 31, 2025, our order backlog was approximately $16.9 million, and the lower level, in part, reflects current delays in orders of new forklifts due to a general slowing of capital spending by our customers.
Previous wording
We have experienced some delays in new orders of our energy storage solutions due to corresponding deferrals of new forklift purchases mainly caused by lower capital spending in the market sector that we serve and due to interest rate variability affecting capital spending by certain large customer fleets. While we have had very few cancellations of existing purchase orders, some customers have extended their orders to later periods. Causal rationale for delays is speculative and not definitive, but some customer feedback indicates concerns over the economy and the uncertainty of interest rates, as well as broader geopolitical uncertainty. The impact of order deferrals has required additional selling strategies to support our targeted sales trajectory.
Current wording
Prior to the increase of existing tariffs and implementation of new tariffs by the U.S government, which is discussed below in “Business Trends and Uncertainties”, we experienced some delays in new orders of our energy storage solutions due to corresponding deferrals of new forklift purchases mainly caused by lower capital spending in the market sector that we serve and due to interest rate variability affecting capital spending by certain large customer fleets. While we have had very few cancellations of existing purchase orders, some customers have extended their orders to later periods. Causal rationale for delays is speculative and not definitive, but some customer feedback indicates concerns over the economy and the uncertainty of interest rates, as well as broader geopolitical uncertainty. The impact of order deferrals has required additional selling strategies to support our targeted sales trajectory.
Previous wording
On February 21, 2025, the Company received a notice (the “February Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) stating that because the Company had not yet filed its Form 10-Q for the period ended December 31, 2024 (the “December Form 10-Q”), the Company does not comply with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”), which requires Nasdaq-listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission, and required the Company to submit an update to its original plan to regain compliance with the Listing Rule. The Company submitted its update to its original plan to Nasdaq on February 25, 2025, including its plan to file the December Form 10-Q by no later than April 14, 2025.
Current wording
On February 21, 2025, the Company received a notice (the “February Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) stating that because the Company had not yet filed its Form 10-Q for the period ended December 31, 2024 (the “December Form 10-Q”), the Company does not comply with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”), which requires Nasdaq-listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission, and required the Company to submit an update to its original plan to regain compliance with the Listing Rule. The Company submitted its update to its original plan to Nasdaq on February 25, 2025, including its plan to file the December Form 10-Q by no later than April 14, 2025. The Company filed the December Form 10-Q on March 20, 2025 and is now current with its required periodic financial reports to be filed with the Securities and Exchange Commission under the Listing Rule.
Previous wording
On March 10 2025, Mr. Ronald F. Dutt, our former chairman and Chief Executive Officer, notified the Company’s Board of Directors (the “Board”) of his decision to retire and resign from his position as director, Chairman of the Board, Chief Executive Officer and President of the Company and its wholly owned subsidiary, Flux Power, Inc. (“Flux Power”), effective March 10, 2025. Mr. Dutt’s stepping down is for personal reasons and not due to any disagreement with the Company’s management team or the Company’s Board on any matter relating to the operations, policies or practices of the Company or any issues regarding the Company’s accounting policies or practices.
Current wording
On March 10, 2025, Mr. Ronald F. Dutt, our former chairman and Chief Executive Officer, notified the Company’s Board of Directors (the “Board”) of his decision to retire and resign from his position as director, Chairman of the Board, Chief Executive Officer and President of the Company and its wholly owned subsidiary, Flux Power, Inc. (“Flux Power”), effective March 10, 2025. Mr. Dutt’s stepping down was for personal reasons and not due to any disagreement with the Company’s management team or the Company’s Board on any matter relating to the operations, policies or practices of the Company or any issues regarding the Company’s accounting policies or practices.
Previous wording
In connection with Mr. Dutt’s retirement, the Board appointed Mr. Dale T. Robinette as the new Chairman of the Board, effective March 10, 2025. Mr. Robinette also currently serves as an independent director, lead independent director, chairperson of the Compensation Committee, and a member of both the Audit Committee and the Nominating and Governance Committee. In addition, the Board appointed Mr. Krishna Vanka as director, Chief Executive Officer and President of the Company and Flux Power, effective March 10, 2025.
Current wording
In connection with Mr. Dutt’s retirement, the Board appointed Mr. Dale T. Robinette as the new Chairman of the Board, effective March 10, 2025. Mr. Robinette also currently serves as an independent director, chairperson of the Compensation Committee and a member of both the Audit Committee and the Nominating and Governance Committee. In addition, the Board appointed Mr. Krishna Vanka as director, Chief Executive Officer and President of the Company and Flux Power, effective March 10, 2025.
Previous wording
On March 10, 2025, the Company entered into an executive employment agreement with Mr. Vanka, pursuant to which he will serve as the Chief Executive Officer and President of the Company (the “Employment Agreement”). Pursuant to the terms of the Employment Agreement, Mr. Vanka will receive an annual base salary of $400,000, subject to annual performance reviews by the Board or Compensation Committee. As an initial incentive for achieving key financial milestones, Mr. Vanka will be awarded a cash bonus of $100,000 if the Company’s average EBITDA is net positive over the next nine months (end of the calendar year). Beginning fiscal year 2026, Mr. Vanka will have the ability to achieve a cash bonus of up to 150% of base salary based on budget performance goals as determined by the Board or the Compensation Committee. Beginning fiscal year 2026, Mr. Vanka will be granted time-based restricted stock units (“Time RSUs”) equivalent to 50% of his base salary, vesting in three (3) equal annual installments over three (3) years. He will also be eligible for performance-based restricted stock units (“PSUs”), with a target of 50% of his base salary and a maximum of 150%, based on budget performance goals. Any earned PSUs will cliff-vest on the third (3rd) anniversary of the grant date.
Current wording
On March 10, 2025, the Company entered into an executive employment agreement with Mr. Vanka, pursuant to which he will serve as the Chief Executive Officer and President of the Company (the “Employment Agreement”). Pursuant to the terms of the Employment Agreement, Mr. Vanka will receive an annual base salary of $400,000, subject to annual performance reviews by the Board or Compensation Committee. As an initial incentive for achieving key financial milestones, Mr. Vanka will be awarded a cash bonus of $100,000 if the Company’s average EBITDA is net positive over the nine months ending December 31, 2025. Beginning fiscal year 2026, Mr. Vanka will have the ability to achieve a cash bonus of up to 150% of base salary based on budget performance goals as determined by the Board or the Compensation Committee. Beginning fiscal year 2026, Mr. Vanka will be granted time-based restricted stock units (“Time RSUs”) equivalent to 50% of his base salary, vesting in three (3) equal annual installments over three (3) years. He will also be eligible for performance-based restricted stock units (“PSUs”), with a target of 50% of his base salary and a maximum of 150%, based on budget performance goals. Any earned PSUs will cliff-vest on the third (3rd) anniversary of the grant date.
Previous wording
In addition, the Company and Mr. Dutt also agreed to enter into a separation and release agreement (“Separation Agreement”), which includes the contemplated terms of the payments and benefits in exchange for the release and other agreements set forth therein (the “Severance Benefits”) with Mr. Dutt, including: (a) a cash severance payment of $386,250.02, equivalent to twelve (12) months of his base salary as of the Resignation Date to be paid pro ratably over twelve (12) months; and (b) a monthly cash payment for twelve (12) months in an amount of $4,034.20 for health insurance coverage. Mr. Dutt’s Separation Agreement includes a customary general release of claims in favor of the Company and certain related parties.
Current wording
In addition, on March 31, 2025 the Company and Mr. Dutt entered into a separation and release agreement (“Separation Agreement”), which includes the contemplated terms of the payments and benefits in exchange for the release and other agreements set forth therein (the “Severance Benefits”) with Mr. Dutt, including: (a) a cash severance payment of $386,250.02, equivalent to twelve (12) months of his base salary payable in over twelve (12) installments of approximately $32,187.50 per installment; and (b) a monthly cash payment for twelve (12) months in an amount of $4,034.20 for health insurance coverage. Mr. Dutt’s Separation Agreement includes a customary general release of claims in favor of the Company and certain related parties. Mr. Dutt’s employment with the Company ended on March 31, 2025.
Previous wording
Cost of sales for the quarter ended December 31, 2024 was $11,367,000 or 68% of revenue versus $12,822,000 or 70% of revenue for the quarter ended December 31, 2023. The decrease in cost of sales was directly associated with a decrease in units of energy storage packs sold during the current quarter, and lower average cost of sales per unit achieved during the current quarter as a result of our product cost improvement initiatives, partially offset by higher warranty costs.
Current wording
Cost of sales for the quarter ended March 31, 2025 was $11,455,000 or 68% of revenue compared to $10,432,000 or 72% of revenue for the quarter ended March 31, 2024. The decrease in cost of sales as a percent of revenue was directly associated with lower warranty-related costs, partially offset by slightly higher material costs.
Previous wording
Gross profit for the quarter ended December 31, 2024 was $5,463,000 or 32% of revenue versus $5,381,000 or 30% of revenue for the quarter ended December 31, 2023. The 200 basis point increase in gross profit margin (gross profit as a percent of revenues) was primarily driven by a decrease in average costs, partially offset by an increase in warranty costs.
Current wording
Gross profit for the quarter ended March 31, 2025 was $5,287,000 or 32% of revenue compared to $4,025,000 or 28% of revenue for the quarter ended March 31, 2024. The 400 basis point increase in gross profit margin (gross profit as a percent of revenues) was primarily due to the decrease in warranty-related expenses, partially offset by the slightly higher material costs.
Previous wording
Research and development expenses for the quarter ended December 31, 2024 was $957,000 versus $1,235,000 for the quarter ended December 31, 2023. The decrease of $278,000 was mainly driven by lower salaries and stock-based compensation.
Current wording
Research and development expenses for the quarter ended March 31, 2025 were $1,147,000 compared to $1,286,000 for the quarter ended March 31, 2024. The decrease of $139,000 was mainly attributable to lower salaries and severance costs.
Previous wording
Interest income (expense), net for the quarter ended December 31, 2024 was $408,000 versus $449,000 for the quarter ended December 31, 2023. The decrease of $41,000 or 9% was primarily related to lower balances outstanding under our credit facilities.
Current wording
Interest income (expense), net for the quarter ended March 31, 2025 was $362,000 compared to $433,000 for the quarter ended March 31, 2024. The decrease of $71,000 or 16% was primarily due to lower average balances outstanding under our credit facilities during the quarter ending March 31, 2025 as compared to the same period a year ago.
Previous wording
Net loss for the quarter ended December 31, 2024, was $1,887,000 versus $896,000 for the quarter ended December 31, 2023. The increase in net loss was primarily attributable to the increase in operating expenses related to costs associated with the multi-year restatement of previously filed financial statements and executive severance.
Current wording
Net loss for the quarter ended March 31, 2025, was $1,939,000 compared to $3,005,000 for the quarter ended March 31, 2024. The decrease in net loss was primarily attributable to the increase in gross profit, partially offset by the increase in selling and administrative expenses related to costs associated with the multi-year restatement of previously filed financial statements.
Previous wording
The following table represents our unaudited condensed consolidated statement of operations for the six months ended December 31, 2024 and 2023.
Current wording
The following table represents our unaudited condensed consolidated statement of operations for the nine months ended March 31, 2025 and 2024.
Previous wording
Cost of sales for the six months ended December 31, 2024 was $22,274,000 or 68% of revenue versus $23.374,000 or 71% of revenue for the six months ended December 31, 2023. The decrease of $1,100,000 was mostly attributed to a reduction in average costs for material handling battery packs slightly offset by an increase in warranty expense. The decline in cost of sales as a percent of revenue of 300 basis points was driven by an increase in average selling prices in the ground support market and reduced costs in material handling.
Current wording
Cost of sales for the nine months ended March 31, 2025 was $33,729,000 or 68% of revenue compared to $33,806,000 or 71% of revenue for the nine months ended March 31, 2024. The decrease of $77,000 was mostly attributed to a slight reduction in average costs for material handling battery packs and a decrease in warranty costs. The decline in cost of sales as a percent of revenue of 300 basis points was driven by an increase in average selling prices in the ground support market and reduced costs in the material handling market.
Previous wording
Gross profit for the six months ended December 31, 2024 was $10,681,000 or 32% of revenue versus $9,616,000 or 29% of revenue for the six months ended December 31, 2023. The 300 basis point increase in gross profit margin (gross profit as a percent of revenues) was primarily driven by an increase in average selling prices in the ground support market and reduced costs in material handling.
Current wording
Gross profit for the nine months ended March 31, 2025 was $15,968,000 or 32% of revenue compared to $13,641,000 or 29% of revenue for the nine months ended March 31, 2024. The 300 basis point increase in gross profit margin (gross profit as a percent of revenues) was primarily driven by an increase in average selling prices in the ground support equipment market and reduced costs in the material handling market.
Previous wording
Selling and administrative expenses for the quarter ended December 31, 2024 were $5,985,000 versus $4,593,000 for the quarter ended December 31, 2023. The increase of $1,392,000 or 30% was primarily attributable to variable incentive compensation, severance and professional fees associated with the multi-year restatement of previously filed financial statements.
Current wording
Selling and administrative expenses for the nine months ended March 31, 2025 were $16,817,000 compared to $14,629,000 for the quarter ended March 31, 2024. The increase of $2,188,000 or 15% was primarily attributable to higher variable incentive compensation, severance costs and professional fees associated with the multi-year restatement of previously filed financial statements.
Previous wording
Research and development expenses for the six months ended December 31, 2024 were $2,272,000 versus $2,530,000 for the six months ended December 31, 2023. The decrease of $258,000 was primarily attributable to lower salaries and stock-based compensation.
Current wording
Research and development expenses for the nine months ended March 31, 2025 were $3,419,000 compared to $3,816,000 for the nine months ended March 31, 2024. The decrease of $397,000 or 10% was primarily attributable to lower salaries and stock-based compensation, partially offset by higher product validation costs.
Previous wording
Net loss for the six months ended December 31, 2024, was $3,556,000 versus $3,084,000 for the six months ended December 31, 2023. The increase in net loss was primarily attributable to the increase in operating expenses related to costs associated with the multi-year restatement of previously filed financial statements and executive severance, partially offset by the increase in gross profit.
Current wording
Net loss for the nine months ended March 31, 2025, was $5,495,000 compared to $6,089,000 for the nine months ended March 31, 2024. The decrease in net loss was primarily attributable to the increase in selling and administrative expenses related to costs associated with the multi-year restatement of previously filed financial statements and severance costs, partially offset by the increase in gross profit.
Previous 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, income taxes, depreciation, amortization and stock-based compensation, each of which has been calculated in accordance with GAAP. Adjusted EBITDA was a loss of $951,000 for the quarter ended December 31, 2024, a decrease of $1,160,000 compared to a gain of $209,000 for the quarter ended December 31, 2023. Adjusted EBITDA was a loss of approximately $1,564,000 for the six months ended December 31, 2024, a loss increase of $525,000 compared to a loss of $1,039,000 for the six months ended December 31, 2023.
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, income taxes, depreciation, amortization and stock-based compensation, each of which has been calculated in accordance with GAAP. Adjusted EBITDA was a loss of $1,123,000 for the quarter ended March 31, 2025, an improvement of $622,000 compared to a loss of $1,745,000 for the quarter ended March 31, 2024. Adjusted EBITDA was a loss of approximately $2,687,000 for the nine months ended March 31, 2025, relatively flat with a loss of $2,784,000 for the nine months ended March 31, 2024.
Previous wording
To date, our business has not generated sufficient cash to fund our operations. However, given our existing backlog, 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 while increasing the price of our products for new orders. We received new orders during the six months ended December 31, 2024 of approximately $32.6 million.
Current wording
To date, our business has not generated sufficient cash to fund our operations. However, given our existing backlog, 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 while increasing the price of our products for new orders. We received new orders during the nine months ended March 31, 2025 of approximately $48.7 million.
Previous wording
As of January 31, 2025, we believe our cash balance of $0.4 million, together with $4.9 million available under our $16.0 million revolving line of credit with GBC, subject to borrowing base limitations, and $1.0 million available under the subordinated line of credit (“Subordinated LOC”) through August 2025, will not be sufficient to meet our anticipated capital resources to fund planned operations for the next twelve (12) months. 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
As of March 31, 2025, we believe our cash balance of $0.5 million, together with $5.0 million available under our $16.0 million revolving line of credit with GBC, subject to borrowing base limitations, and $1.0 million available under the subordinated line of credit (“Subordinated LOC”) through August 2025, will not be sufficient to meet our anticipated capital resources to fund planned operations for the next twelve (12) months. 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.
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 operating activities was $4,045,000 for the six months ended December 31, 2023, which consisted of net loss of $3,084,000 and $2,817,000 used in changes in operating assets and liabilities, partially offset by $1,856,000 of non-cash operating costs. The primary changes in operating assets and liabilities were an increase in accounts receivable, partially offset by a reduction in accounts payable and accrued expenses combined and a reduction in inventories.
Current wording
Net cash used in operating activities was $4,274,000 for the nine months ended March 31, 2024, which consisted of net loss of $6,089,000 and $1,172,000 used in changes in operating assets and liabilities, partially offset by $2,987,000 of non-cash operating costs. The primary changes in operating assets and liabilities were an increase in accounts receivable, an increase in inventories and a decrease in office leases payable, partially offset by a reduction in accounts payable and accrued expenses combined.
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 used in investing activities for the six months ended December 31, 2023 was $338,000, which consisted primarily of equipment purchases.
Current wording
Net cash used in investing activities for the nine months ended March 31, 2024 was $588,000, which consisted primarily of equipment purchases.
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
Net cash provided by financing activities for the six months ended December 31, 2023 was $3,588,000, which primarily consisted of $3,663,000 in net borrowing under the working capital line of credit.
Current wording
Net cash provided by financing activities for the nine months ended March 31, 2024 was $3,733,000, which primarily consisted of $3,733,000 in net borrowing under the working capital line of credit.
Previous wording
As of January 31, 2025, we had a cash balance of $0.4 million, available funding under our GBC Credit Facility for up to $4.9 million, subject to borrowing base limitations, and additional borrowing capacity under our 2023 Subordinated LOC of $1.0 million. Our operations have relied on our ability to successfully maintain and draw on our credit facilities. Our ability to draw funds from the GBC Credit Facility is subject to certain restrictions, covenants and borrowing base limitations. In light of the recent Default under the GBC Credit Facility, the financial covenants in the Agreement were modified to help prevent future defaults.
Current wording
As of March 31, 2025, we had a cash balance of $0.5 million, available funding under our GBC Credit Facility for up to $5.0 million, subject to borrowing base limitations, and additional borrowing capacity under our 2023 Subordinated LOC of $1.0 million. Our operations have relied on our ability to successfully maintain and draw on our credit facilities. Our ability to draw funds from the GBC Credit Facility is subject to certain restrictions, covenants and borrowing base limitations. In light of the recent Default under the GBC Credit Facility, on January 17, 2025 the financial covenants in the Agreement were modified to help prevent future defaults.
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. 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, 2024 filed with the SEC on January 29, 2025.
Current 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, 2025 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, 2024 filed with the SEC on January 29, 2025.