What changed in this filing

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Item 1A. Risk Factors

2022-09-28 compared with 2021-09-27 · 166 added, 120 removed, 352 unchanged (45% of the section changed)

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stock could decline, and you may lose all or part of your investment.

You also should read the section entitled “Special Note Regarding

Forward Looking Statements”

above for a discussion of what types of statements are forward-looking statements, as well as the significance

You also should read the section entitled “Special Note Regarding

Forward Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance

of such statements in the context of this report.

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We expect that our existing cash balances,

credit facilities, and the net proceeds from our recent public offering will be sufficient to fund our existing and planned operations

for the next twelve months.

Until such time as we generate sufficient cash to fund our operations, we will need additional capital to

continue our operations thereafter.

have relied on equity financings, borrowings under short-term loans with related parties, our credit facilities and/or previous cash

flows from operating activities to fund our operations.

However, there is no guarantee we will be able to obtain additional funds in

the future or that funds will be available on terms acceptable to us, if at all.

future financing may result in dilution of the ownership interests of our stockholders.

If such funds are not available on acceptable

terms, we may be required to curtail our operations or take other actions to preserve our cash, which may have a material adverse effect

on our future cash flows and results of operations.

credit facilities, and cash resources from operations will be sufficient to fund our existing and planned operations for the next twelve

Until such time as we generate sufficient cash to fund our operations, we will need additional capital to continue our operations

have relied on equity financings, borrowings under short-term loans with related parties, our credit facilities and/or cash resources

from operating activities to fund our operations.

However, there is no guarantee that we will be able to obtain additional funds in the

future or that funds will be available on terms acceptable to us, if at all.

Any future financing may result in dilution of the ownership

interests of our stockholders.

If such funds are not available on acceptable terms, we may be required to curtail our operations or take

other actions to preserve our cash, which may have a material adverse effect on our future cash flows and results of operations.

will need to raise additional capital or financing to continue to execute and expand our business.

we expect that our available cash, the existing revolving line of credit with a bank, and the expected net proceeds from our authorized

At-The-Market offering will be sufficient to sustain our operations for the next twelve months, we will likely need to raise additional

capital to support our expanded operations and execute on our business plan.

In order to support our anticipated growth, we may be required

to pursue sources of additional capital through various means, including joint venture projects, sale and leasing arrangements, and debt

or equity financings.

Any new securities that we may issue in the future may be sold on terms more favourable for our new investors than

the terms in which our stockholders acquired their securities.

Newly issued securities may include preferences, superior voting rights,

and the issuance of warrants or other convertible securities that will have additional dilutive effects.

We cannot assure that additional

funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.

we may incur substantial costs in pursuing future capital and/or financing.

We may also be required to recognize non-cash expenses in

connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition

and results of operations.

Our ability to obtain needed financing may be impaired by such factors as the weakness of capital markets,

and the fact that we have not been profitable, which could impact the availability and cost of future financings.

If the amount of capital

we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital

needs, we may have to reduce our operations accordingly.

conditions may adversely affect consumer spending and the overall general health of our retail customers, which, in turn, may adversely

affect our financial condition, results of operations and cash resources.

we expect that our existing cash and additional funding available under our SVB Line of Credit, combined with funds available to us under

our subordinated line of credit and the potential net proceeds from our At-The-Market offering will be sufficient to meet our anticipated

capital resources and to fund our planned operations for the next twelve months, such sources of funding are subject to certain restrictions

and covenants and our ability to sell stock will be impacted by market conditions.

If we are unable to meet the conditions provided in

the loan documents, the funds will not be available to us.

In addition, should there be any delays in the receipts of key component parts,

due in part to supply change disruptions, our ability to fulfil the backlog of sales orders will be negatively impacted resulting in

lower availability of cash resources from operations.

In that event, we may be required to raise additional capital to support our expanded

operations and execute on our business plan by issuing equity or convertible debt securities.

In the event we are required to obtain

additional funds, there is no guarantee that additional funds will be available on a timely basis or on acceptable terms.

To the extent

that we raise additional funds by issuing equity or convertible debt securities, our stockholders may experience additional dilution

and such financing may involve restrictive covenants.

Newly issued securities may include preferences, superior voting rights, and the

issuance of warrants or other convertible securities that will have additional dilutive effects.

We cannot assure that additional funds

will be available when needed from any source or, if available, will be available on terms that are acceptable to us.

Further, we may

incur substantial costs in pursuing future capital and/or financing.

We may also be required to recognize non-cash expenses in connection

with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition and

results of operations.

Our ability to obtain needed financing may be impaired by such factors as the weakness of capital markets, and

the fact that we have not been profitable, which could impact the availability and cost of future financings.

If such funds are not available

when required, management will be required to curtail investments in additional sales and marketing and product development, which may

have a material adverse effect on future cash flows and results of operations.

may not be indicative of future operating results.

revenue for the Company can be influenced by order backlog.

Backlog represents the dollar amount of revenues we expect to recognize in

the future from contracts awarded and in progress.

Backlog substantially represents new orders.

Backlog is not a measure defined by generally

accepted accounting principles and is not a measure of contract profitability.

Our methodology for determining backlog may not be comparable

to methodologies used by other companies in determining their backlog amounts.

The backlog values we disclose include anticipated revenues

associated with:

(1) the original contract amounts;

(2) change orders for which we have received written confirmations from the applicable

(3) change orders for which we expect to receive confirmations in the ordinary course of business;

and (4) claims that we

have made against customers.

In addition, the timing of order placement, size, and customer delivery dates can create unusual fluctuations

include unapproved change orders for which we expect to receive confirmations in the ordinary course of business in backlog, generally

to the extent of the lesser of the amounts management expects to recover or the associated costs incurred.

Any revenue that would represent

profit associated with unapproved change orders is generally excluded from backlog until written confirmation is obtained from the applicable

However, consideration is given to our history with the customer as well as the contractual basis under which we may be operating.

Accordingly, in certain cases based on our historical experience in resolving unapproved change orders with a customer, the associated

profit may be included in backlog.

However, if an unapproved change order is under dispute or has been previously rejected by the customer,

the associated amount of revenue is treated as a claim.

amounts included in backlog that are attributable to claims, we include unapproved claims in backlog when we have a legal basis to do

so, consider collection to be probable and believe we can reliably estimate the ultimate value.

Claims revenue is included in backlog

to the extent of the lesser of the amounts management expects to recover or associated costs incurred.

may not be indicative of future operating results, and projects in our backlog may be cancelled, modified or otherwise altered by customers.

Our ability to realize revenue from the current backlog is dependent on among other things, the delivery of key parts from our vendors

in a timely manner.

We can provide no assurance as to the profitability of our contracts reflected in backlog.

conditions may adversely affect consumer spending and the overall general health of our customers, which, in turn, may adversely affect

our financial condition, results of operations and cash resources.

about the current and future global economic conditions may cause our customers to defer purchases or cancel purchase orders for our

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our battery products.

a majority of our product sales have been generated from a small number of OEMs and customers, including three (3) customers

who, on an aggregate basis, made up 61% of our sales for the year ended June 30, 2021, and three (3) customers who, on an aggregate

basis, made up 60% of our sales for the year ended June 30, 2020.

As a result, our success depends on continued demand from this small

group of customers and their willingness to incorporate our battery products in their equipment.

The loss of a significant customer would

have an adverse effect on our revenues.

There is no assurance that we will be successful in our efforts to convince end users to accept

our products.

Our failure to gain acceptance of our products could have a material adverse effect on our financial condition and results

of operations.

a majority of our product sales have been generated from a small number of OEMs and customers, including four (4) customers who, on an

aggregate basis, made up 69% of our sales for the year ended June 30, 2022, and three (3) customers who, on an aggregate basis, made

up 61% of our sales for the year ended June 30, 2021.

As a result, our success depends on continued demand from this small group of customers

and their willingness to incorporate our battery products in their equipment.

The loss of a significant customer would have an adverse

effect on our revenues.

There is no assurance that we will be successful in our efforts to convince end users to accept our products.

Our failure to gain acceptance of our products could have a material adverse effect on our financial condition and results of operations.

Additionally,

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adverse impact on our operations and financial condition.

COVID-19 pandemic has spread across the globe and is impacting worldwide economic activity.

COVID-19 and another public health epidemic/pandemic

could pose the risk that we or our employees, contractors, customers, suppliers, third party shipping carriers, government and other

partners may be prevented from or limited in their ability to conduct business activities for an indefinite period of time, including

due to the spread of the disease within these groups or due to shutdowns that may be requested or mandated by governmental authorities.

While it is not possible at this time to estimate the impact that COVID-19 could have on our business, the continued spread of COVID-19

and the measures taken by the governments of states and countries affected could disrupt, among other things, the supply chain and the

manufacture or shipment of our products.

On March 19, 2020, the governor of California, the state where our facility is located, issued

state-wide stay-at-home orders for non-essential workers to help combat the spread of COVID-19.

The Company was deemed to be an essential

business consistent with announcements by Forklift OEMs and related supply chain, who support the logistics industry, critical to delivering

food and supplies during COVID-19 crisis and we have instituted processes, policies and workplace procedures in an effort to keep our

workers safe while productive.

However, in the future, our manufacturing operations may be subject to closure or shut down for a variety

While the Company implemented COVID-19 measures in March 2020 as recommended by the CDC and governmental authorities, since

the start of the pandemic the Company has been notified that a few employees had tested positive for COVID-19.

While manufacturing operations

were not materially impacted, future operations could be affected by the COVID-19 pandemic.

Any substantial disruption in our manufacturing

operations from COVID-19, or its related impacts, would have a material adverse effect on our business and would impede our ability to

manufacture and ship products to our customers in a timely manner, or at all.

and another public health epidemic/pandemic could pose the risk that we or our employees, contractors, customers, suppliers, third party

shipping carriers, government and other partners may be prevented from or limited in their ability to conduct business activities for

an indefinite period of time, including due to the spread of the disease within these groups or due to shutdowns that may be requested

or mandated by governmental authorities.

While it is not possible at this time to estimate the impact that COVID-19 could have on our

business, the continued spread of COVID-19 and the measures taken by the governments of states and countries affected could disrupt,

among other things, the supply chain and the manufacture or shipment of our products.

Our manufacturing operations may be subject to

closure or shut down for a variety of reasons.

While manufacturing operations were not materially impacted, future operations could be

affected by the continued spread of COVID-19.

Any substantial disruption in our manufacturing operations from COVID-19, or its related

impacts, would have a material adverse effect on our business and would impede our ability to manufacture and ship products to our customers

in a timely manner, or at all.

effect of the COVID-19 pandemic and its associated restrictions may adversely impact many aspects of our business, including customer

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of any of the foregoing events and their adverse effect on capital markets and investor sentiment may adversely impact our ability to

raise capital when needed or on terms favourable to us and our stockholders to fund our operations, which could have a material adverse

raise capital when needed or on terms favorable to us and our stockholders to fund our operations, which could have a material adverse

effect on our business, financial condition and results of operations.

The extent to which the COVID-19 outbreak impacts our results,

its effect on near or long-term value of our share price will depend on future developments that are highly uncertain and cannot be predicted,

including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

its effect on near or long-term value of our share price are highly uncertain and cannot be predicted, including new information that

may emerge concerning the severity of the virus and the actions to contain its impact.

do not have long term contracts with our customers.

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Further, any product liability claim we face could be expensive to defend and could divert

management’s attention.

The successful assertion of a product liability claim against us could result in potentially significant

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to reciprocal tariffs being imposed by the European Union and other governments on products imported from the United States.

States government has implemented tariffs on goods imported from China, and additional tariffs on goods imported from China are under

consideration.

States government has implemented tariffs on goods imported from China.

lithium-ion battery industry has been subjected to tariffs implemented by the United States government on goods imported from China.

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Any resulting

escalation of trade tensions, including a “trade war,”

could have a significant adverse effect on world trade and the world

escalation of trade tensions, including a “trade war,” could have a significant adverse effect on world trade and the world

economy, as well as on our results of operations.

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prospects and operating results.

do not manufacture the battery cells used in our LiFT Packs.

Our battery cells, which are an integral part of our battery products and

systems, are sourced from a limited number of manufacturers located in China.

do not manufacture the battery cells used in our energy storage packs.

Our battery cells, which are an integral part of our battery products

and systems, are sourced from a limited number of manufacturers located in China.

While we obtain components for our products and systems

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from our suppliers.

We refer to the battery cell suppliers as our “limited source suppliers.”

Additionally,

our operations are materially dependent upon the continued market acceptance and quality of these manufacturers’

products and their

We refer to the battery cell suppliers as our “limited source suppliers.” Additionally,

our operations are materially dependent upon the continued market acceptance and quality of these manufacturers’ products and their

ability to continue to manufacture products that are competitive and that comply with laws relating to environmental and efficiency standards.

Our inability to obtain products from one or more of these suppliers or a decline in market acceptance of these suppliers’

Our inability to obtain products from one or more of these suppliers or a decline in market acceptance of these suppliers’ products

could have a material adverse effect on our business, results of operations and financial condition.

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suppliers to compensate for such shortages may be time-consuming and costly.

we may have to recertify our UL Listings for the battery cells from new suppliers, which in turn has led to delays in product acceptance.

In addition, we may have to recertify our UL Listings for

the battery cells from new suppliers, which in turn has led to delays in product acceptance.

Similar delays may occur in the future.

Furthermore, the performance of the components from our suppliers as incorporated in our products

may not meet the quality requirements of our customers.

Furthermore, the performance of the components from our suppliers as incorporated in our products may not meet the quality requirements

of our customers.

date, we have no qualified alternative sources for our battery cells although we research and assess cells from other suppliers on an

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in business conditions, wars, regulatory requirements, economic conditions and cycles, governmental changes, pandemic, and other factors

beyond our control could also affect our suppliers’

ability to deliver components to us on a timely basis or cause us to terminate

beyond our control could also affect our suppliers’ ability to deliver components to us on a timely basis or cause us to terminate

our relationship with them and require us to find replacements, which we may have difficulty doing.

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In addition, in order to compete

effectively in the renewable battery industry, we must be able to launch new products to meet our customers’

demands in a timely

effectively in the renewable battery industry, we must be able to launch new products to meet our customers’ demands in a timely

However, we cannot provide assurance that we will be able to install and certify any equipment needed to produce new products

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Our success depends, at least in part, on our ability to protect our core technology and intellectual

To accomplish this, we rely on a combination of patents (two issued patents), patent applications, trade secrets, including

know-how, employee and third-party nondisclosure agreements, copyright laws, trademarks, intellectual property licenses and other contractual

rights to establish and protect our proprietary rights in our technology.

To accomplish this, we rely on a combination of patents, patent applications, trade secrets, including know-how, employee and

third-party nondisclosure agreements, copyright laws, trademarks, intellectual property licenses and other contractual rights to establish

and protect our proprietary rights in our technology.

protections provided by patent laws will be important to our future opportunities.

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by the SEC or other regulatory authorities, which would require additional financial and management resources.

identified material weaknesses in our internal control over financial reporting.

If we are unable to remediate these material weaknesses,

or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls,

we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business

and stock price.

on management’s evaluation of our disclosure controls and procedures as of June 30, 2022, we identified material weaknesses in

our internal controls over financial reporting.

The material weaknesses were based on our ineffective oversight of our internal control

over financial reporting and lack of sufficient review and approval of the underlying data used in the calculation of warranty reserve.

We are taking remedial measures designed to improve our internal control over financial reporting to remediate material weaknesses, We

are implementing additional control procedures to strengthen the oversight of the Company’s internal control over financial reporting

through review and sign off by the senior management of all significant assumptions and estimates being used and the underlying the data

used in producing financial schedules/estimates and financial reporting.

We are also adding a second level of review and approval for

all manual journal entries for significant estimates and assumptions made by management.

are committed to remediating our material weakness.

However, there can be no assurance as to when this material weakness will be remediated

or that additional material weaknesses will not arise in the future.

If we are unable to maintain effective internal control over financial

reporting, our ability to record, process and report financial information timely and accurately could be adversely affected and could

result in a material misstatement in our financial statements, which could subject us to litigation or investigations, require management

resources, increase our expenses, negatively affect investor confidence in our financial statements and adversely impact the trading

price of our common stock.

may face significant costs relating to environmental regulations for the storage and shipment of our lithium-ion battery packs.

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or, depending upon the severity, globally, which could adversely impact our operating results.

Similar disasters occurring at our vendors’

manufacturing facilities could impact our reputation and our consumers’

perception of our brands.

Similar disasters occurring at our vendors’

manufacturing facilities could impact our reputation and our consumers’ perception of our brands.

breaches, loss of data and other disruptions could compromise sensitive information related to our business, prevent us from accessing

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our stock being depressed at a time when you may want to sell.

August 14, 2020, our common stock commenced trading 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.

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, many of which are beyond our control, including, without

limitation, the following:

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, many of which are beyond our control, including, without limitation, the following:

earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the

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or departures of key personnel.

volatility of the trading price of our common stock may impact your ability to sell your shares of common stock at an acceptable price,

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.

ownership of our stock is highly concentrated in our management, and we have one controlling stockholder.

of September 10, 2021, our directors and executive officers, and their respective affiliates beneficially owned approximately 34.8%

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.

Michael Johnson, our director and beneficial owner of Esenjay, beneficially owns

approximately 32.5% 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.

of September 12, 2022, our directors and executive officers, and their respective affiliates beneficially owned approximately 29% 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.

Michael Johnson, our director and beneficial owner of Esenjay, beneficially owns approximately

28% 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.

do not intend to pay dividends on shares of our common stock for the foreseeable future.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors