Flux Power to Write Down $1.7 Million in Obsolete Inventory, Requiring Restatement of Certain Previously Issued Financial Statements
Monday, September 9, 2024
VISTA, Calif. – September 5, 2024 – Flux Power Holdings, Inc. (NASDAQ:FLUX), a developer of advanced lithium-ion energy storage solutions for electrification of commercial and industrial equipment today announced that it has identified $1.7 million of excess and obsolete inventory primarily related to product innovation and design of our products during a period of rapid growth over the last several years. As a result, the Company will restate previously issued financial statements for fiscal year 2023 and the interim periods of fiscal year 2024. The inventory write-down is a non-cash charge and will not impact cashflow. However, as a part of the restatement process, the Company may include additional adjustments other than inventory that may be identified during its review. The Company also expects that its $16 million revolving credit facility with its financing partner Gibraltar Business Capital remains available subject to meeting certain lending criteria under the Loan Agreement.
“Flux Power, with the leadership of our new CFO Kevin Royal, is taking all appropriate measures to rectify the inventory accounting issues related to our transition to more advanced energy cells, including implementing enhanced procedures and quality checks to mitigate the possibility of it recurring,” said Ron Dutt, CEO of Flux Power. “We believe that these findings will not impact the strength of the business, our access to capital through our financing partner or the Company’s positive outlook for our future – which will be fueled by continued innovation, maintaining a disciplined cost structure and driving organic growth.”
The Company intends to restate its financial statements for the periods noted above as soon as practicable. Additional information related to the restatements is available in the Company’s Form 8-K filed with the Securities and Exchange Commission today.
About Flux Power Holdings, Inc.
Flux Power (NASDAQ: FLUX) designs, manufactures, and sells advanced lithium-ion energy storage solutions for electrification of a range of industrial and commercial sectors including material handling, airport ground support equipment (GSE), and stationary energy storage. Flux Power’s lithium-ion battery packs, including the proprietary battery management system (BMS) and telemetry, provide customers with a better performing, lower cost of ownership, and more environmentally friendly alternative, in many instances, to traditional lead acid and propane-based solutions. Lithium-ion battery packs reduce CO2 emissions and help improve sustainability and ESG metrics for fleets. For more information, please visit www.fluxpower.com.
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