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Flux Power Holdings , Inc. (NASDAQ:FLUX), a miscellaneous electrical equipment and supplies manufacturer with a market capitalization of $29.33 million, has been notified by the Nasdaq Stock Market LLC of its noncompliance with the minimum stockholders’ equity requirement. The notice, received on January 31, 2025, indicates that the company’s stockholders’ equity stood at $194,000, falling short of the Nasdaq’s minimum requirement of $2.5 million for continued listing on The Nasdaq Capital Market. According to InvestingPro data, the company’s financial health score is rated as WEAK, with concerning metrics including negative EBITDA of -$5.57 million and a current ratio of 0.92.
The company, headquartered in Vista, California, is now faced with the task of regaining compliance to maintain its listing. Flux Power has until March 17, 2025, to submit a plan to Nasdaq outlining how it will address the shortfall in stockholders’ equity. If Nasdaq accepts the plan, Flux Power may be granted up to 180 days from the date of the notice to demonstrate compliance. InvestingPro analysis reveals the company is quickly burning through cash, with a debt-to-equity ratio of 83.28% adding to its financial challenges.
Should the company fail to regain compliance within the granted period or if Nasdaq does not accept its compliance plan, Flux Power has the right to request a hearing before an independent panel. This request would postpone any suspension or delisting actions until the panel concludes the hearing process and any granted extension period expires.
As of now, the trading of Flux Power’s common stock remains unaffected and continues on The Nasdaq Capital Market under the symbol "FLUX," though the stock has experienced significant volatility with a -61.26% return over the past year. The company has expressed its intent to explore all viable options to rectify the situation and comply with Nasdaq’s listing rules. However, there is no certainty that Flux Power will be able to meet the stockholders’ equity requirement or maintain compliance with other listing requirements in the future. For deeper insights into FLUX’s financial health and future prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 US stocks.
This development is based on a press release statement and includes forward-looking statements regarding Flux Power’s potential actions and outcomes. These statements are not guarantees of future performance and are subject to risks and uncertainties.
Investors and stakeholders are reminded that the company’s situation is subject to change, and they should monitor Flux Power’s filings and announcements for the latest developments regarding its compliance status with Nasdaq’s listing requirements.
In other recent news, Flux Power Holdings, Inc. has made several significant developments. The company amended its loan agreement with Gibraltar Business Capital, adjusting the EBITDA covenant, a move that comes after reporting negative EBITDA of $4.35 million. Flux Power also switched its independent accounting firm from Baker Tilly US, LLP to Haskell & White LLP, following the disclosure of material weaknesses in internal control over financial reporting.
Additionally, Flux Power announced the appointment of Kelly Frey as its new Chief Revenue Officer, a strategic move aimed at driving business growth. The company reported recent revenue at $63.85 million, with a net loss of $2.6 million in the third quarter of fiscal year 2024.
Flux Power is also undergoing financial restatements due to noncash inventory write-downs and related adjustments, totaling approximately $4.9 million. The company has been notified by the Nasdaq Stock Market of non-compliance with its listing rules due to delayed filing of its required quarterly and annual reports with the SEC.
Lastly, Flux Power has announced a strategic partnership with a leading forklift original equipment manufacturer to introduce a new private label battery program. These developments highlight the ongoing strategic and financial adjustments within Flux Power Holdings.
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