Flux Power’s stockholders’ equity deficit reached $431,000 as credit distress continued
Key Facts
Flux Power had a stockholders’ equity deficit of $431,000 on September 30, 2026, after reporting positive equity of $2.558 million on June 30, according to its quarterly filing with the U.S. Securities and Exchange Commission. The financial reversal puts the stockholders’ equity requirement at the center of risks facing the company, but the filing does not say it received a new notice from Nasdaq on the matter. The company said it had not received notice of noncompliance with Rule 5550(b) as of the date of its quarterly report. It added that Nasdaq could view the timing of noncompliance differently. The monitoring period ended on October 14, 2026, while the filing indicated that stockholders’ equity at the end of September did not meet the requirement.
The shift from a surplus to a deficit between the end of June and the end of September marks a significant change in the reported financial position. First-quarter fiscal 2027 figures show concurrent operating pressure: revenue was $6.758 million in the three months ended September 30, compared with $13.175 million in the same period a year earlier. Net loss also widened to $3.170 million from $2.562 million in the comparable quarter. The company said lower gross profit contributed partly to the increased loss, despite a decline in operating expenses. Those expenses fell 22% year over year, which the company attributed mainly to earlier staff reductions and a streamlined operating model.
On financing, Flux Power said in its quarterly filing that it remained in default under its loan and security agreement. While the default continues, the lender retained the right to stop making the facility available or terminate the commitments and demand immediate repayment. This means the loan amendment documented in September did not end the existing default. The filing does not establish a new extension of the maturity date on November 13. The amendment’s terms should also not be confused with an announcement of a new loan extension.
Under the seventh amendment dated September 17, 2026, the company was required to raise at least $4 million in net proceeds from the sale of equity interests within 50 days of the amendment date. The amendment also required it to modify the minimum financial covenant tied to EBITDA within 90 days. These terms show that the amendment linked the continuation of financing arrangements to specific steps to raise capital and change a financial covenant. But the company’s filing confirmed that it remained in default under the loan agreement despite the amendment. The available facts do not confirm a subsequent extension of the maturity date.
The company faces a separate listing issue involving its bid price. Flux said the Nasdaq notice issued in July 2026 regarding the bid price did not affect the listing of its shares at the time, and that its common stock continued to trade on the Nasdaq Capital Market under the ticker FLUX. This differs from the stockholders’ equity requirement discussed in the quarterly report, as the company said it had received no notice regarding that requirement as of the report date. The filing thus places two distinct standards in the listing context: the earlier bid-price notice and the stockholders’ equity level reported at the end of September. It did not report a trading suspension because of either issue.
The company had $0.4 million in cash on September 30, 2026, and reported a net loss of $3.2 million for the quarter ended on that date, according to its quarterly filing. At the same time, management said it expects revenue to rise based on its existing orders and that improving gross margin could bring the company closer to profitability. Its plan includes reducing material costs and raising prices for new orders. Management linked this path to improved revenue and margins, but acknowledged there was no assurance the plans would be executed or that sufficient financing would be obtained. The filing does not specify a later date for achieving these goals.