VISTA, Calif. - Flux Power Holdings, Inc. (NASDAQ: FLUX), a provider of lithium-ion energy storage solutions, is in the process of restating its financial statements due to noncash inventory write-downs and related adjustments. The company disclosed that it is working to correct approximately $4.9 million in inventory and warranty adjustments that span multiple quarters over several years.
The adjustments include an estimated $4.4 million in noncash inventory write-downs primarily due to excess and obsolete inventory, linked to product innovation and design during a period of rapid growth. Additionally, there are approximately $0.5 million in noncash warranty related items. These adjustments are not confined to a single period but affect multiple financial quarters.
Flux Power's restatement pertains to the fiscal year 2023 and interim periods of fiscal year 2024. The company has completed its internal review and is collaborating with its auditors to file the necessary amended reports, including the Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Once the 10-K is finalized, the company plans to complete the 10-Q filing for the quarter ending September 30, 2024.
Despite these financial revisions, CEO Ron Dutt expressed a positive outlook for the company's future. He highlighted ongoing efforts in expanding sales, marketing initiatives, developing new technologies, and building partnerships. Dutt reaffirmed the company's goal of achieving profitability through continued innovation, cost discipline, and organic growth.
The company's forward-looking statements, as per the Private Securities Litigation Reform Act of 1995, suggest an anticipation of the restatement's impact on financial statements and internal controls. However, they caution that actual results may differ due to various risks and uncertainties.
This news is based on a press release statement issued by Flux Power Holdings, Inc. Investors are advised to consider the company's recent filings with the Securities and Exchange Commission for additional details, including the Form 12b-25 and the Form 8-K filed on September 5, 2024.
In other recent news, Flux Power Holdings has faced a Nasdaq compliance issue due to a delayed annual report for the fiscal year ending June 30, 2024. The company is now required to submit a plan to regain compliance within 60 days. Additionally, Flux Power reported a restatement of its financial statements for fiscal year 2023 and certain interim periods of fiscal year 2024 due to an inventory oversight of $1.7 million. The company's revenues decreased to $14.5 million in the third quarter of fiscal year 2024, a decline from the previous year's $15.1 million, and the net loss broadened to $2.6 million from a loss of $1.4 million year-over-year.
Flux Power has also formed a strategic partnership with a leading forklift original equipment manufacturer (OEM) to introduce a new private label battery program. This collaboration aims to expand the reach of Flux Power's S-Series batteries. In addition, the company has made changes to its loan agreement with Gibraltar Business Capital, leading to a non-refundable payment of $50,000.
These are among the recent developments for Flux Power Holdings. The company is also working on the development of higher-voltage lithium batteries and exploring expansion into adjacent markets, including military and medical batteries.
InvestingPro Insights
As Flux Power Holdings, Inc. (NASDAQ: FLUX) navigates through its financial restatement process, recent data from InvestingPro sheds light on the company's current financial position and market performance.
The company's market capitalization stands at a modest $36 million, reflecting the challenges it faces. This relatively small size aligns with the ongoing financial adjustments and the company's efforts to achieve profitability.
InvestingPro data reveals that Flux Power's revenue for the last twelve months as of Q3 2024 was $63.85 million, with a slight decline in revenue growth of -2.19% over the same period. This data point correlates with the company's disclosure of product innovation and design changes during a period of rapid growth, which led to the inventory write-downs.
An InvestingPro Tip indicates that the stock is trading near its 52-week low, which is consistent with the recent financial restatement announcement and its potential impact on investor confidence. Another relevant InvestingPro Tip notes that analysts do not anticipate the company will be profitable this year, aligning with CEO Ron Dutt's emphasis on the goal of achieving profitability through continued efforts.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide valuable insights into Flux Power's financial health and market position.
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