Business Context and Reporting Period
Flux Power Holdings, Inc. (Nasdaq: FLUX) filed a Current Report on Form 8-K dated September 17, 2026. The filing details the entry into a material definitive agreement regarding its existing debt facility.
Key Financial Metrics and Debt Status
- Debt Status: The Company remains in default under its Loan and Security Agreement with Gibraltar Business Capital, LLC (GBC).
- Liquidity Access: GBC has temporarily allowed continued access to the revolving credit facility but reserves the right to terminate access, declare commitments terminated, and demand immediate repayment at any time.
- Amendment Fee: The Company agreed to pay a non-refundable fee of $135,000 in cash, payable in three installments of $45,000 on September 17, October 17, and November 16, 2026.
- Other Metrics: The filing text does not provide specific values for revenue, profit, cash flow, margins, or total debt balances.
Material Changes and New Covenants
On September 17, 2026, the Company entered into Amendment No. 7 to its Loan and Security Agreement. Key changes include:
- Equity Sale Requirement: The Company must complete a sale of equity interests generating net proceeds of at least $4.0 million within 50 days of the Effective Date.
- Reporting Obligations: The Company must provide GBC with projections, budgets, and compliance reports. Material deviations from these budgets constitute an immediate event of default.
- EBITDA Covenant: The parties agreed to amend the minimum EBITDA financial covenant within 90 days of the Effective Date.
Outlook, Risks, and Contingencies
Management commentary is limited to the terms of the amendment. Significant risks and contingencies include:
- Default Risk: The Company is currently in default. Failure to meet the new equity sale requirement or budget deviations could trigger immediate acceleration of debt.
- Financing Risk: The Company faces a strict 50-day deadline to raise $4.0 million in equity to maintain compliance.
- Creditor Remedies: GBC retains the right to exercise remedies as a secured party, including seizing assets or forcing liquidation, if the default is not cured.
Investor Verification Checklist
- Verify the Company's ability to raise $4.0 million in equity proceeds within 50 days of September 17, 2026.
- Confirm the specific terms of the amended EBITDA covenant once finalized within the 90-day window.
- Monitor cash burn rates to ensure the $135,000 amendment fee payments do not exacerbate liquidity constraints.
- Review the full text of Exhibit 10.1 for detailed definitions of "material deviations" from budgets.