Flux Power Holdings, Inc. (NASDAQ: FLUX), a developer of
advanced lithium-ion energy storage solutions for electrification
of commercial and industrial equipment, today announced a new
credit facility with Cleveland Capital L.P. (“CCLP”) and provided
an update on its capital structure.
The Company has taken the following recent actions to
strengthen its capital structure:
- Secured a $15 million credit facility with Gibraltar Business
Capital (“GBC”) with a term to July 28, 2025, with no warrants,
that can be expanded to $20 million.
- Entered into a new $2 million subordinated credit facility with
Cleveland Capital, L.P. (“CCLP”) which includes a duration to
August 15, 2025.
- Terminated an at-the-market (“ATM”) offering program.
- Filed a universal shelf registration statement on Form-3, which
became effective on October 6, 2023, having a three-year term to
provide flexibility with respect to capital structure.
New $15.0 Million Gibraltar Business Capital Credit
Facility
On July 28, 2023, the Company secured a new $15.0 million credit
facility from GBC to fund working capital and to refinance its
existing credit facility with Silicon Valley Bank. The $15.0
million credit facility is designed for working capital
requirements. The facility is secured by the existing assets of the
Company, matures on July 28, 2025, and includes no warrants. The
agreement allows the Company to increase the facility to $20.0
million at the Company’s request subject to approval by GBC. The
Company has also chosen to work with Bank of America for cash
management and other operational banking services.
Cleveland Capital L.P. Subordinated Line of Credit
Facility
On November 2, 2023, the Company entered into a new $2.0 million
Subordinated LOC agreement with CCLP with a duration to August 15,
2025, and cancelled the existing $5.0 million Subordinated LOC.
Subject to the subordination provisions, the entire principal
amount and all unpaid accrued interest shall be due and payable on
August 15, 2025. Interest shall accrue on each Advance at the
Secured Overnight Financing Rate plus nine percent per annum. The
accrued but unpaid interest on the Advances, if any, shall be
payable on the due date in cash.
At-The-Market Offering – Terminated on October 5,
2023
On December 21, 2020, the Company entered into a Sales Agreement
with H.C. Wainwright & Co., LLC to sell shares of its common
stock from time to time, through an ATM program. From December 21,
2020 through September 30, 2023, the Company sold an aggregate of
1,524,873 shares of common stock at an average price of $10.45 per
share for gross proceeds of approximately $15.9 million under the
ATM Offering. On October 5, 2023, the Company terminated the sales
agreement with H.C. Wainwright & Co.
Filing of Form S-3 Shelf Registration Statement
On September 25, 2023, the Company filed a universal shelf
registration statement on Form S-3 with the United States
Securities and Exchange Commission, which became effective on
October 6, 2023, replacing a previous universal shelf registration
statement on Form S-3 that expired on October 6, 2023. The new
shelf registration statement, which has a term of three years, will
provide the Company the flexibility to publicly offer and sell from
time-to-time debt securities, common stock, preferred stock,
warrants and other securities in amounts, at prices and on terms
announced if and when the securities are ever offered.
Flux Power has no immediate plans to offer or sell any
securities under the shelf registration statement to the public.
However, the Company believes it was prudent to file the shelf
registration statement as a matter of standard corporate practice.
It also provides financial flexibility going forward as the company
executes its longer-term growth strategy.
CEO Comments
CEO of Flux Power Ron Dutt stated: “Throughout the year we have
continued to manage our business growth and margin expansion with
careful priorities as part of our strategy to enhance shareholder
value. We migrated from our Silicon Valley Bank facility to a new
$15 million credit facility with Gibraltar, which provides lower
interest rates, a two-year term, and the potential to expand the
facility to $20 million to accommodate higher working capital needs
as our business grows. This facility, along with our improvement in
operating cash performance, supports our current business growth.
Moreover, today’s announcement of a new $2.0 million subordinated
line of credit with Cleveland Capital provides greater working
capital optionality and continued confidence in our growth strategy
from a long-term investor in Flux Power. Finally, as we look to the
future, we believe it is good corporate practice to replace our
previous shelf registration as it allows the Company maximum
flexibility with respect to our capital management. We look forward
to providing additional updates at our upcoming fiscal first
quarter financial results.”
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.
Forward-Looking Statements
This release contains projections and other "forward-looking
statements" relating to Flux Power’s business, that are often
identified using "believes," "expects" or similar expressions.
Forward-looking statements involve several estimates, assumptions,
risks, and other uncertainties that may cause actual results to be
materially different from those anticipated, believed, estimated,
expected, etc. Such forward-looking statements include impact of
COVID-19 on Flux Power’s business, results and financial condition;
statements regarding plans and expectations with respect to
Company’s registration statement on Form S-3 and any potential
future offering or capital raises, Flux Power’s ability to obtain
raw materials and other supplies for its products at competitive
prices and on a timely basis, particularly in light of the
potential impact of the COVID-19 pandemic on its suppliers and
supply chain; the development and success of new products,
projected sales, deferral of shipments, Flux Power’s ability to
fulfill backlog orders or realize profit from the contracts
reflected in backlog sale; Flux Power’s ability to fulfill backlog
orders due to changes in orders reflected in backlog sales, Flux
Power’s ability to timely obtain UL Listing for its products, Flux
Power’s ability to fund its operations, distribution partnerships
and business opportunities and the uncertainties of customer
acceptance and purchase of current and new products. Actual results
could differ from those projected due to numerous factors and
uncertainties. Although Flux Power believes that the expectations,
opinions, projections, and comments reflected in these
forward-looking statements are reasonable, they can give no
assurance that such statements will prove to be correct, and that
Flux Power’s actual results of operations, financial condition and
performance will not differ materially from the results of
operations, financial condition and performance reflected or
implied by these forward-looking statements. Undue reliance should
not be placed on the forward-looking statements and Investors
should refer to the risk factors outlined in our Form 10-K, 10-Q
and other reports filed with the SEC and available at
www.sec.gov/edgar. These forward-looking statements are made as of
the date of this news release, and Flux Power assumes no obligation
to update these statements or the reasons why actual results could
differ from those projected.
Flux, Flux Power, and associated logos are trademarks of Flux
Power Holdings, Inc. All other third-party brands, products,
trademarks, or registered marks are the property of and used to
identify the products or services of their respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20231103580865/en/
Media & Investor Relations: info@fluxpower.com
External Investor Relations: Chris Tyson,
Executive Vice President MZ Group - MZ North America 949-491-8235
FLUX@mzgroup.us www.mzgroup.us
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