Want to see FLUX full AI Analyst Report?
Flux Power Holdings (FLUX) Risk Analysis
Risk Overview Q1, 2025
Source: the company's latest filing for the period ended Mar 31, 2025, filed May 08, 2025
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1We are not currently in compliance with the continued listing requirements for the Nasdaq Stock Market. If we fail to regain compliance or to meet the continued listing requirements, our common stock may be delisted, which could affect the market price of our common stock, negatively impact stockholders' ability to sell shares and negatively impact our ability to access the capital markets.
On January 31, 2025, we received a notice (the "Stockholders' Equity Notice") from The Nasdaq Stock Market ("Nasdaq") LLC notifying the Company that based on its stockholders' equity of $194,000 as reported in its Form 10-K for the fiscal year ended June 30, 2024, the Company is no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued listing on Nasdaq (the "Stockholders' Equity Requirement"). Under the Nasdaq rules and pursuant to the Stockholders' Equity Notice, we had until March 17, 2025 to submit to Nasdaq a plan to regain compliance with the Stockholders' Equity requirement. On March 17, 2025, we filed such plan with Nasdaq to regain compliance with the Stockholders' Equity requirement, including requesting an extension through July 30, 2025, which is 180 calendar days from the date of the Stockholders' Equity Notice to regain compliance of the Stockholders' Equity Requirement. In the event the plan is not accepted by Nasdaq, or in the event the plan is accepted by Nasdaq and the 180-day extension period is granted, but we fail to regain compliance within such plan period, we would have the right to a hearing before an independent panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing. We intend to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and to remain listed on Nasdaq. Any subsequent failure to regain and maintain compliance with the continued listing requirements of Nasdaq could result in delisting of our common stock from Nasdaq and negatively impact our company and holders of our common stock, including by reducing the liquidity and trading of our common stock, limited availability of price quotations and reduced news and analyst coverage. Delisting may adversely impact the perception of our financial condition, cause reputational harm with investors, our employees and parties conducting business with us and limit our access to debt and equity financing. In addition, we cannot assure that we will be able to continue to comply with the minimum bid price requirement, successfully comply and continue to comply with the stockholders' equity requirement, and the other standards that we are required to meet in order to maintain a listing of our common stock on Nasdaq. Our failure to continue to meet these requirements may result in our common stock being delisted from Nasdaq. There can be no assurance that our common stock will continue to trade on Nasdaq or trade on the over-the counter markets or any public market in the future. In the event our common stock is delisted, our stock price and market liquidity of our stock will be adversely affected which will impact your ability to sell your securities in the market.
Risk Highlights Q1, 2025
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 33
- Share Price & Shareholder Rights - Risk 1ChangedWe are not currently in compliance with the continued listing requirements for the Nasdaq Stock Market. If we fail to regain compliance or to meet the continued listing requirements, our common stock may be delisted, which could affect the market price of our common stock, negatively impact stockholders' ability to sell shares and negatively impact our ability to access the capital markets.
On January 31, 2025, we received a notice (the "Stockholders' Equity Notice") from The Nasdaq Stock Market ("Nasdaq") LLC notifying the Company that based on its stockholders' equity of $194,000 as reported in its Form 10-K for the fiscal year ended June 30, 2024, the Company is no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued listing on Nasdaq (the "Stockholders' Equity Requirement"). Under the Nasdaq rules and pursuant to the Stockholders' Equity Notice, we had until March 17, 2025 to submit to Nasdaq a plan to regain compliance with the Stockholders' Equity requirement. On March 17, 2025, we filed such plan with Nasdaq to regain compliance with the Stockholders' Equity requirement, including requesting an extension through July 30, 2025, which is 180 calendar days from the date of the Stockholders' Equity Notice to regain compliance of the Stockholders' Equity Requirement. In the event the plan is not accepted by Nasdaq, or in the event the plan is accepted by Nasdaq and the 180-day extension period is granted, but we fail to regain compliance within such plan period, we would have the right to a hearing before an independent panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing. We intend to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and to remain listed on Nasdaq. Any subsequent failure to regain and maintain compliance with the continued listing requirements of Nasdaq could result in delisting of our common stock from Nasdaq and negatively impact our company and holders of our common stock, including by reducing the liquidity and trading of our common stock, limited availability of price quotations and reduced news and analyst coverage. Delisting may adversely impact the perception of our financial condition, cause reputational harm with investors, our employees and parties conducting business with us and limit our access to debt and equity financing. In addition, we cannot assure that we will be able to continue to comply with the minimum bid price requirement, successfully comply and continue to comply with the stockholders' equity requirement, and the other standards that we are required to meet in order to maintain a listing of our common stock on Nasdaq. Our failure to continue to meet these requirements may result in our common stock being delisted from Nasdaq. There can be no assurance that our common stock will continue to trade on Nasdaq or trade on the over-the counter markets or any public market in the future. In the event our common stock is delisted, our stock price and market liquidity of our stock will be adversely affected which will impact your ability to sell your securities in the market.
- Share Price & Shareholder Rights - Risk 2The market price of our common stock could become volatile, or our trading volume become weak, either of which could lead to the price of our stock being depressed at a time when you may want to sell.
Our common stock is being traded on the Nasdaq Capital Market under the symbol "FLUX." We cannot predict the extent to which investor interest in our common stock will lead to the development of an active trading market on that stock exchange or any other exchange in the future. An active market for our common stock may never develop. We cannot assure you that the volume of trading in shares of our common stock will increase in the future. The trading price of our common stock has experienced volatility and is likely to continue to be highly volatile in response to numerous factors which have been discussed in this Section 1A, and additional factors, many of which are beyond our control, including, without limitation, the following: - Our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors; - Changes in financial estimates by securities analysts, if any, who might cover our stock; - Speculation about our business in the press or the investment community;- Significant developments relating to our relationships with our customers or suppliers; - Stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in our industry; - Customer demand for our products; - Investor perceptions of our industry in general and our Company in particular; - General economic conditions and trends; - Announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures; - Changes in accounting standards, policies, guidance, interpretation or principles; - Loss of external funding sources; - Sales of our common stock, including sales by our directors, officers or significant stockholders; and - Additions or departures of key personnel, including but not limited to our chief financial officer. The trading price and volume of our common stock may impact your ability to sell your shares of common stock, causing you to lose all or part of your investment.
- Share Price & Shareholder Rights - Risk 3The ownership of our stock is highly concentrated in our management.
As of January 3 2025, our directors and executive officers, and their respective affiliates beneficially owned approximately 27.5% of our outstanding common stock, including common stock underlying options, and warrants that were exercisable or convertible or which would become exercisable or convertible within 60 days, with Michael Johnson, our director and sole director of Esenjay Investments LLC ("Essenjay"), beneficially owning approximately 25.1% of such outstanding common stock. As a result of their ownership, our directors and executive officers and their respective affiliates collectively, and Esenjay, individually, are able to significantly influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may also have the effect of delaying or preventing a change in control.
- Share Price & Shareholder Rights - Risk 4Preferred Stock may be issued under our Articles of Incorporation, which may have superior rights to our common stock.
Our Articles of Incorporation authorize the issuance of up to 500,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance. These terms may include voting rights including the right to vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. In addition, these voting, conversion and exchange rights of preferred stock could negatively affect the voting power or other rights of our common stockholders. The issuance of any preferred stock could diminish the rights of holders of our common stock, or delay or prevent a change of control of our Company, and therefore could reduce the value of such common stock.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.