What changed in this filing

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Item 1. Business

2025-09-17 compared with 2025-01-29 · 491 added, 293 removed, 177 unchanged (82% of the section changed)

design, develop, manufacture, and sell a portfolio of advanced lithium-ion energy storage solutions for electrification of a range

of industrial commercial sectors which include material handling, airport ground support equipment (“GSE”), and other

commercial and industrial applications.

We believe our mobile and stationary energy storage solutions provide our customers a

reliable, high performing, cost effective, and more environmentally friendly alternative as compared to traditional lead acid and

propane-based solutions.

Our modular and scalable design allows different configurations of lithium-ion energy storage solutions to

be paired with our proprietary wireless battery management system to provide the level of energy storage required and “state

of the art” real time monitoring of pack performance.

We believe that the increasing demand for lithium-ion energy storage

solutions and more environmentally friendly energy storage solutions in the material handling sector should continue to drive our

revenue growth.

long-term strategy is to meet the rapidly growing demand for lithium-ion energy solutions and to be the supplier of choice,

targeting large companies having demanding energy storage needs.

We have established selling relationships with equipment OEMs and

customers with large fleets of forklifts and GSE.

We intend to reach this goal by investing in research and development to expand

our product mix, by expanding our sales and marketing efforts, improving our customer support efforts and continuing our efforts to

increase production capacity and efficiencies.

Our research and development efforts will continue to focus on providing adaptable,

reliable and cost-effective energy storage solutions for our customers.

largest sector of penetration thus far has been the material handling sector which we believe is a multi-billion-dollar addressable

We believe the sector will provide us with an opportunity to grow our business as we enhance our product mix and service

levels and grow our sales to large fleets of forklifts and GSE.

Applications of our modular packs for other industrial and

commercial uses, such as mobile energy storage, are providing additional current and future growth opportunities.

continue to expand and diversify our supply chain and customer base and seek further partnerships that provide synergy to

meeting our growth and “building scale” objectives.

Chain Issues and Higher Procurement Costs

from the COVID-19 pandemic over the past several years have been largely abated.

We addressed supply chain challenges with improved

vendor selection, and improved supply chain internal practices.

However, we have experienced recent shipment delays of battery packs

for some forklift models as a result of production delays from our suppliers.

We have seen recent improvements in shipment timing.

there can be no assurance that our price increases, inventory levels or any future steps we take will be sufficient to offset the

rising procurement costs and manage sourcing of raw materials and component parts effectively.

near-term priorities will be to achieve “profitability,” specifically, cash flow breakeven, within our capital constraints.

Accordingly, we will

continue to pursue supply chain improvements, gross margin expansion initiatives, and cost reductions.

In addition, we are focusing

on business expansion to accelerate gross margins by:

design, develop, manufacture, and sell a portfolio of advanced lithium-ion energy storage solutions for electrification of a range of

industrial and commercial sectors which include material handling and airport ground support equipment (“GSE”).

our mobile energy storage solutions provide our customers a reliable, high performing, cost effective, and more environmentally friendly

alternative as compared to traditional lead acid and propane-based solutions.

Our modular and scalable design allows different configurations

of lithium-ion energy storage solutions to be paired with our proprietary wireless battery management system to provide the level of

energy storage required and “state of the art” real time monitoring of pack performance.

We believe that the increasing demand

for lithium-ion energy storage solutions and more environmentally friendly energy storage solutions in the material handling sector should

continue to drive our revenue growth.

long-term strategy is to meet the rapidly growing demand for lithium-ion energy solutions and to be the supplier of choice, targeting

large companies having energy storage needs.

We have established selling relationships with customers with large fleets of forklifts

We intend to reach this goal by investing in research and development to expand our product mix, by expanding our sales and

marketing efforts, improving our customer support efforts and improving production efficiencies.

Our research and development efforts

will continue to focus on providing adaptable, reliable and cost-effective energy storage solutions for our customers.

We have received

two patents, with another patent pending, on advanced technology related to lithium-ion energy storage solutions.

The technology behind

these patents is designed to:

battery life by optimizing the charging cycle,

users a better understanding of the health of their battery in use, and

artificial intelligence to predictively balance the cells for optimal performance.

largest sector of penetration thus far has been the material handling sector, which we believe is a multi-billion-dollar addressable market.

We believe the sector will provide us with an opportunity to grow our business as we enhance our product mix and service levels and grow

our sales to large fleets of forklifts and GSE.

Applications of our modular packs for other industrial and commercial uses, such as mobile

energy storage systems, are providing additional current growth and further opportunities.

We intend to continue to expand our supply

chain and customer partnerships and seek further partnerships and/or acquisitions that provide synergy to meeting our growth and “building

scale” objectives.

near-term priority will be to achieve profitability within our capital constraints.

Accordingly, we will continue to pursue supply chain improvements, gross margin expansion initiatives and cost reductions.

we are focusing on business expansion to accelerate gross margins by:

current high-profile “proven customer relationships” to respond to growing demand of large fleets for lithium-ion value

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on our leadership position with new product offerings, particularly to exploit the rising demand for higher power applications;

we are “agnostic to the type of lithium chemistry,” ensuring our research efforts support other chemistries as they may become

we are “agnostic to the type of lithium chemistry,” ensuring our research efforts support other chemistries as they may

become available.

can be no assurance that these initiatives and efforts will be successful.

Management Transition

On November 20, 2024,

Dutt, our chairman and Chief Executive Officer, notified the Company’s Board of Directors of his intentions to

retire from his positions upon the appointment of a new Chief Executive Officer.

The Board has commenced a search for a new Chief Executive Officer

Dutt will remain with the Company through the search and transition period.

Credit Facility

July 28, 2023, we entered into a certain Loan and Security Agreement (the “Agreement”) with Gibraltar Business Capital, LLC,

a Delaware limited liability company (“GBC”).

The Agreement provides the Company with a senior secured revolving loan facility

(the “GBC Credit Facility”) for up to $15.0 million (the “Revolving Loan Commitment”).

The revolving amount available

under the GBC Credit Facility is equal to the lesser of the Revolving Loan Commitment and the borrowing base amount (as defined in the

The GBC Credit Facility is evidenced by a revolving note, which matures on July 28, 2025 (the “Maturity Date”),

unless extended, modified or renewed (the “Revolving Note”).

Provided that there is no event of default, the Maturity Date

can automatically be extended for one (1) year period upon payment of a renewal fee for each such extension in the amount of three-quarters

of one percent (0.75%) of the Revolving Loan Commitment, which fee will be due and payable on or before the applicable Maturity Date.

In addition, subject to conditions and terms set forth in the Agreement, the Company may request an increase in the Revolving Loan Commitment

Business Developments

We have experienced some delays in new orders of our energy storage solutions

due to corresponding deferrals of new forklift purchases mainly caused by lower capital spending by certain large customer fleets.

we have had very few cancellations of existing purchase orders, some customers have deferred their orders to later periods.

Some customers

have attributed lower capital spending to concerns over the economy and the uncertainty of higher interest rates, as well as broader geopolitical

More recently, the economic impacts and costs of higher global tariffs implemented by the U.S government have affected new

purchase orders.

The impact of deferrals and uncertainties related to new customer orders have required additional selling strategies

to support our targeted sales trajectory.

Some of these issues are discussed in the Business Trends and Uncertainties section in Part

Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report,

have seen improvements in our sourcing and purchasing activity, reflecting our efforts to expand and optimize our vendor strategy.

improvements include more secondary sources to minimize stock-outs, lower costs from increasing sources, and controlled delivery times,

as reflected in our current inventory levels.

With strategic supply chain and profitability improvement initiatives, lower costs and

higher volume purchasing, we are targeting gross margin improvement to continue.

We are highly focused on expanding sales and marketing

initiatives to secure new customer relationships and support continued migration to lithium of current customers.

We recently have added

our second “tier one” OEM private label battery program to supplement our strong OEM relationships and approvals.

This collaboration

marks a significant milestone for our S-Series line, which now includes products with the UL Type EE certification, which provides added

safety and durability capabilities.

We are also working with our distribution network to expand customer acquisition with direct-to-customer

are also expanding our deployment of our telemetry solution providing customers with state of health, better asset management, and a

platform for more timely management of service and maintenance requirements.

also announced a new partnership aimed at enhancing the recycling process for end-of-life lithium-ion batteries with the largest critical

battery components recycling company in the U.S.

This collaboration represents a significant step forward in our ongoing commitment to

environmental responsibility.

Stock Market Notices

On January 31, 2025, the Company received a notice (the “January

Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) 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”).

On March 17, 2025, the Company filed its plan with Nasdaq to regain

compliance with the Stockholders’ Equity Requirement, which included requesting an extension through July 30, 2025.

On February 21, 2025, the Company received a notice (the “February

Notice”) from the Nasdaq Listing Qualifications Department (the “Staff”) stating that because the Company had not yet

filed its Form 10-Q for the period ended December 31, 2024 (the “December Form 10-Q”), the Company does not comply with Nasdaq

Listing Rule 5250(c)(1) (the “Listing Rule”), which requires Nasdaq-listed companies to timely file all required periodic

financial reports with the Securities and Exchange Commission.

The Company filed the December Form 10-Q on March 20, 2025 and is now current

with its required periodic financial reports to be filed with the Securities and Exchange Commission under the Listing Rule.

On July 31, 2025, the Company received a determination letter from the

Staff notifying the Company that based on the Company’s most recent disclosure, the Company’s stockholders’ equity was

a deficit of $4,372,000 as of March 31, 2025 and that the Staff had determined that the Company had not regained compliance with the Stockholders’

Equity Requirement.

The Staff informed the company that trading of the Company’s common stock would be suspended at the opening

of business on August 11, 2025, unless the Company requests an appeal of the Staff’s determination to a Nasdaq Hearings Panel (the

On August 7, 2025, the Company submitted a hearing request to the Panel,

which request will stay suspension of the Company’s securities and the filing of the Form 25-NSE pending the Panel’s decision.

On September 4, 2025, the Company made its presentation to the Panel.

On September 16, 2025, the Panel determined to grant the Company an exception to demonstrate compliance with the

Stockholders’ Equity Requirement and granted the Company’s request for continued listing, which extension is subject to the

(1) the Company shall file a Form 10-K for the period ending June 30, 2025 on or before September 30, 2025, and (2), the Company

shall demonstrate compliance with the Stockholder’s Equity Requirement on or before October 31, 2025 through public disclosures

describing the transactions undertaken by the Company to achieve compliance and demonstrate long-term compliance.

If the Company fails to comply with the Nasdaq listing requirements and does not regain compliance, the Company’s

common stock will be subject to delisting by Nasdaq.

In the event our common stock is delisted, our stock price and market liquidity of

our stock will be adversely affected which will impact the ability of the Company’s stockholders to sell securities in the market.

Further, delisting from Nasdaq could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers

and employees.

Common Stock Share Increase

May 28, 2025, we filed a Certificate of Amendment to our amended and restated articles of incorporation, as amended (the “Articles

of Incorporation”) with the Secretary of State of the State of Nevada to increase the number of authorized shares of common stock

of the Company from 30,000,000 to 75,000,000, effective upon filing.

The Amendment did not have any effect on the par value per share

of the Company’s common stock.

July 11, 2025, we entered into a settlement term sheet (the “Term Sheet”) to fully resolve the previously disclosed class

action litigation captioned Kassam v.

Flux Power Holdings, Inc.

3:25-cv-00113-JO-DDL), against the Company, its former

chief executive officer, Ronald F.

Dutt, and its former chief financial officer, Charles A.

Scheiwe (collectively, the “Defendants”).

The settlement was subsequently memorialized in a definitive settlement agreement, executed on August 27, 2025, which was filed with

the Court on August 28, 2025 in connection with an unopposed motion for preliminary approval of the settlement, which motion will be

heard by the Court on October 23, 2025.

For additional information about the case, see Item 3, “Legal Proceedings,” contained

in Part I of this report.

In settling the class action, the Company is not admitting any liability and neither the Term Sheet nor the

definitive settlement agreement constitutes an admission of liability or an admission regarding the accuracy of any allegation made by

the plaintiffs.

settlement provides for, among other things, the final dismissal of the litigation and a release of claims against the Defendants in

exchange for the Company establishing a $1.75 million escrowed settlement fund to cover payments to the settlement class, attorneys’

fees and settlement administration expenses.

settlement class will consist of all persons or entities who purchased publicly traded common stock of the Company between November 15,

2021 and February 14, 2025, but will exclude (i) persons who suffered no compensable losses;

and (ii) the Defendants;

present and former

officers, directors, or control persons of the Company at all relevant times;

members of their immediate families and their legal representatives,

heirs, successors, predecessors or assigns;

present and former parents, subsidiaries, assigns, successors, and predecessors of the Company;

and any entity in which any of the persons excluded hereunder has or had a controlling or majority ownership interest in the Company

The plaintiff’s motion seeks certification of the settlement class, and, for settlement purposes only, Defendants

will not object to certification of the action as a class action.

settlement is subject to, among other things, court approval of such agreement.

If the settlement does not obtain approval, the parties

agree that the settlement class will be decertified without prejudice, and that all the parties will revert to their pre-settlement positions.

expect our liability insurers to directly fund approximately $1.15 million of the settlement fund.

The Company estimates that it will

contribute approximately $600,000 to the settlement fund as its remaining retention/deductible related to its insurance policy.

Meeting of Stockholders

August 29 2025, at a Special Meeting of Stockholders, our stockholders approved the following proposals:

(1) the amendment and restatement

of the Company’s Amended and Restated Articles of Incorporation as amended and currently in effect (the “Articles”)

to, among other things, (i) increase the aggregate number of authorized shares of preferred stock from 500,000 to 3,000,000, $0.001 par

value per share (“Preferred Stock”), (ii) grant the Board authority to fix the rights and preferences of the preferred stock

by resolution from time to time, and (iii) designate 1,000,000 shares of Preferred Stock as “Series A Convertible Preferred Stock”,

$0.001 par value per share (the “Series A Preferred Stock”), with rights, preferences, privileges and restrictions all as

set forth in the Second Amended and Restated Certificate of Incorporation (the “Restated Articles”) in substantially the

form attached to the Proxy Statement, and (2) the reservation and issuance of such number of shares of common stock issuable in connection with the conversion of the shares

of Series A Preferred Stock which are issuable upon exercise of certain prefunded warrants, and exercise of certain common stock warrants

issued and issuable in the Private Placement, which total issuance could exceed 20% of the amount outstanding of common stock prior to

the Private Placement for purposes of complying with Nasdaq Listing Rule 5635(d).

Amended and Restated Articles of Incorporation

September 10, 2025, the Company filed a Second Amended and Restated Articles

of Incorporation (the “Restated Articles”) with the Secretary of State of the State of Nevada (“Nevada Secretary of

State”) to among other things, (i) increase the aggregate number of authorized shares of preferred stock from 500,000 to 3,000,000,

$0.001 par value per share (“Preferred Stock”), (ii) grant the Board authority to fix the rights and preferences of the preferred

stock by resolution from time to time, and (iii) designate 1,000,000 shares of Preferred Stock as “Series A Convertible Preferred

Stock”, $0.001 par value per share (the “Series A Preferred Stock”), with rights, preferences, privileges and restrictions

set forth therein.

The Restated Articles became effective upon filing with the Nevada Secretary of State on September 10, 2025.

Articles did not have any effect on the par value per share of the Company’s common stock.

A Preferred Stock

Series A Preferred Stock have the following material rights, features, privileges and limitations:

With respect to payment of dividends and distribution of assets upon liquidation, dissolution, or winding up of the Company, whether

voluntary or involuntary, all shares of Series A Preferred Stock rank senior to all the common stock and any other class of securities

that is specifically designated as junior to the Series A Preferred Stock (“Junior Securities”).

The holders of shares of Series A Preferred Stock have a right to vote as a single class with the holders of common stock

on an as-if-converted-to-Common-Stock-basis based on the greater of the (i) Conversion Price, or the (ii) Minimum Price as defined in

Rule 5635(d) of the Nasdaq Listing Rules, except that holders of Series A Preferred Stock shall have the right to vote as a separate

class with respect to certain specified matters.

The holders of each share of the Series A Preferred Stock then outstanding are entitled to receive cumulative cash dividends at an annual

dividend rate of 8.0%, payable quarterly on the last day of March, June, September, and December of each year, which may be payable in

kind or in cash at the option of the Company

Dissolution, or Winding Up .

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”),

bankruptcy event, or change of control, the holders of shares of Series A Preferred Stock will be entitled to receive out of the assets,

whether capital or surplus, of the Company an amount equal to the purchase price per warrant to purchase Series A Preferred Stock paid

for by the holders of Series A Preferred Stock, adjusted for any stock splits, stock dividends, recapitalizations, or similar transaction

with respect to the Series A Preferred Stock (“Liquidation Value”), for each share of Series A Preferred Stock before any

distribution or payment will be made to the holders of any Junior Securities, and if the assets of the Company will be insufficient to

pay in full such amounts, then the entire assets to be distributed to the holders of shares of Series A Preferred Stock will be ratably

distributed among such holders in accordance with the respective amounts that would be payable on such shares if all amounts payable

thereon were paid in full.

The holders of shares of Series A Preferred Stock have the right to convert all or any portion of the outstanding shares

of Series A Preferred Stock held by such holder multiplied by the Liquidation Value into shares of the Company’s common stock at

the initial conversion price equal to 120% of the 20-day volume weighted average price (“VWAP”) per share of common stock

immediately preceding the initial closing in which the warrants to purchase Series A Preferred Stock were first issued to such holders

(the “Initial Conversion Price”), with automatic conversion at the Initial Conversion Price upon (i) the conversion of the

shares of Series A Preferred Stock by a then majority of holders of Series A Preferred Stock (the “Majority Holders”), (ii)

the affirmative vote or written consent by the Majority Holder to convert all outstanding shares of Series A Preferred Stock, and (iii)

on the fifth (5th) anniversary of the initial closing date in which the warrants to purchase Series A Preferred Stock are first issued

to such holders of Series A Preferred Stock.

to Conversion Price and Conversion Shares .

The Conversion Price is subject to standard weighted average anti-dilution protection,

and anti-dilution protection against issuance of securities by the Company in certain incidences, such as (i) in the event of a stock

dividend on, or a subdivision, combination or reclassification of, common stock, and (ii) in the event of any capital reorganization,

reclassification of the capital stock, consolidation or merger of the Company.

July 18, 2025, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors

(the “Initial Purchaser(s)”) pursuant to which the Company agreed to sell an initial aggregate amount of approximately $2.9

million in Prefunded Warrants (the “Prefunded Warrants”) at a purchase price equal to $19.369 per warrant (the “Purchase

Each Prefunded Warrant entitled the holder to purchase one share of the Company’s Series A Convertible Preferred

Stock, par value $0.001 per share (the “Series A Preferred Stock”) for $0.001 per share.

Purchasers of Prefunded Warrants

were also issued an additional five (5) year warrant to purchase a number of shares of common stock, par value $0.001 per share equal

to fifty percent (50%) of the number of shares of common stock issuable upon conversion of the Series A Preferred Stock (the “Common

Warrants,” and together with the Prefunded Warrants, the “Warrants”).

The Warrants, the shares of Series A Preferred

Stock issuable upon exercise of the Prefunded Warrants, and the shares of common stock issuable upon exercise of the Common Warrants

are referred herein as the “Securities”.

On September 15, 2025, the Company entered into an amended and restated securities

purchase agreement (the “Amended and Restated Purchase Agreement”) with certain of the Initial Purchasers and certain additional

investors (collectively, the “Purchasers”) pursuant to which, among other things, the Purchasers agreed to subscribe for

and purchase, and the Company agreed to issue and sell to the Purchasers, an aggregate of 258,144 Prefunded Warrants and 1,214,769 Common

Warrants at the Purchase Price for gross proceeds of approximately $5.0 million (the “Private Placement”).

The Purchase Price

was paid in cash or, in lieu of cash, cancellation of certain existing debt of the Company.

closing of the Private Placement contemplated by the Purchase Agreement occurred simultaneously on September 15, 2025 upon the satisfaction

of certain customary conditions (the “Closing”).

As of the Closing, there were no shares of Series A Preferred Stock issued

or outstanding.

The Company intends to use the net proceeds from the Private Placement for general corporate purposes and growth capital.

Securities were offered to a small select group of accredited investors, as defined in Rule 501 of Regulation D, all of whom have a substantial

pre-existing relationship with the Company.

Certain affiliates of the Company participated in the Private Placement, among which included

Krishna Vanka, our Chief Executive Officer and director, Kevin Royal, our Chief Financial Officer, Jeffrey Mason, our Chief Operating

Officer, Dale Robinette, our director, Michael Johnson, our director, and Cleveland Capital,

(“Cleveland”), which beneficially owns approximately 7.3% of our common stock.

Warrant and Common Warrant

Prefunded Warrant has an exercise price per share of Series A Preferred Stock equal to $0.001 per share.

The Prefunded Warrants are immediately

exercisable upon the Closing of the Private Placement and expire when exercised in full.

The exercise price and the number of shares

of Series A Preferred Stock issuable upon exercise of each Prefunded Warrant is subject to appropriate adjustments in the event of certain

stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Series A Preferred

Common Warrant has an initial exercise price of $1.715, which is equal to the 20-day volume weighted average price (“VWAP’)

per share of common stock immediately preceding the Closing of the Private Placement (subject to adjustment therein), are exercisable

immediately following issuance and have a term of five (5) years from the initial issuance date.

The Common Warrant has a “cashless

exercise” provision which provides that the Common Warrant can be exercised without further payment to the Company.

price and the number of shares of common stock issuable upon exercise of each Common Warrant is subject to appropriate adjustments in

the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting

the common stock.

addition, the Warrants may not be exercised in full and may not be exercised to the extent that immediately following such exercise,

the holder would beneficially own greater than 4.99% or, at the election of the holder, greater than 9.99% of the Company’s outstanding

common stock.

Rights Agreement

connection with the Purchase Agreement, the Company agreed to enter into a registration rights agreement with the Purchasers (the “Registration

Rights Agreement”), pursuant to which the Company will prepare and file a registration statement with the SEC covering the resale

of a number of shares of common stock underlying the Series A Preferred Stock and the Common Warrants issued pursuant to the Purchase

Agreement, and to use its commercially reasonable efforts to cause such registration statement to be declared effective by the SEC within

seventy-five (75) days following the date of the registration statement.

connection with the Closing, the Company entered into an Escrow Agreement (the “Escrow Agreement”), with David L.

on behalf of Hill Innovative Law, LLC, as escrow agent (the “Escrow Agent”), pursuant to which the Escrow Agent agreed to

hold and will disburse the total aggregate purchase price pursuant to the terms of the Escrow Agreement.

Amendment to the Subordinated Unsecured Promissory Note

July 16, 2025, we entered into a First Amendment to the Subordinated Unsecured Promissory Note (“Note Amendment”) with Cleveland

Capital, L.P.

(“Cleveland”).

The Note Amendment amended the due date set forth in the Subordinated Unsecured Promissory Note

dated November 2, 2023 (“Original Note” and as amended by the First Amendment, the “Cleveland Note”) issued by

us to Cleveland in connection with a certain Credit Facility Agreement dated November 2, 2023 (the “Subordinated LOC”).

to the Note Amendment, the due date under the Original Note was changed from August 15, 2025 to September 30, 2025.

Related Party Debt Agreements to the audited consolidated financial statements for additional information regarding the Cleveland

Satisfaction Agreement

September 15, 2025, concurrently with the Closing of the Private Placement, we entered into a Debt Satisfaction Agreement with Cleveland

(the “Debt Satisfaction Agreement”) pursuant to which Cleveland represented that the full subscription price for the Securities

acquired and issued in the Private Placement to Cleveland were in exchange for the full payment and settlement of any and all obligations

of the Company due to Cleveland the Cleveland Note and upon issuance of the Securities in the Private Placement to Cleveland, all obligations

under the Cleveland Note and Subordinated LOC were deemed paid in full and the Subordinated LOC was terminated.

In connection with such termination, the Cleveland Note was cancelled.

July 28, 2023, we entered into a Loan and Security Agreement (the “Loan Agreement”) with Gibraltar Business Capital, LLC

The Agreement provided us with a senior secured revolving loan facility for up to $15.0 million (the “Revolving

Loan Commitment”).

The revolving amount available under the GBC Credit Facility is equal to the lesser of the Revolving Loan Commitment

and the borrowing base amount, as defined in the Agreement.

The GBC Credit Facility is evidenced by a revolving note (the “Revolving

Note”), which maturity date was automatically extended to July 31, 2027 (the “Maturity Date”) upon the conversion of

all the outstanding obligations under the Cleveland Note into equity of the Company at the Closing of the Private Placement on September

Provided that there is no event of default, the Maturity Date can automatically be extended for a one-year period upon payment

of a renewal fee for each such extension in the amount of three-quarters of one percent (0.75%) of the Revolving Loan Commitment, which

fee will be due and payable on or before the applicable Maturity Date.

addition, subject to conditions and terms set forth in the Loan Agreement, we may request an increase in the Revolving Loan Commitment

from time to time upon not less than 30 days’ notice to GBC which increase may be made at the sole discretion of GBC, as long as:

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Outstanding principal under the GBC Credit Facility accrues interest at Secured Overnight Financing Rate

(“SOFR”, as defined in the Agreement) plus five and one half of one percent (5.50%) per annum with such interest payment due monthly on the last day of the month.

In the event of default, the amounts due under the Agreement bears interest at a rate per

(“SOFR”, as defined in the Loan Agreement) plus five and one half of one percent (5.50%) per annum with such interest payment

due monthly on the last day of the month.

In the event of default, the amounts due under the Loan Agreement bear interest at a rate per

annum equal to three percent (3.0%) above the rate that is otherwise applicable to such amounts.

We paid GBC a non-refundable closing

fee for the GBC Credit Facility of $112,500 upon the execution of the Agreement.

In addition, we are required to pay a monthly unused

line fee equal to one-half of one percent (0.50%) per annum on the difference between the Revolving Loan Commitment and the average outstanding

principal balance of the revolving loan(s) for such month.

The obligations under the GBC Credit Facility may be prepaid in whole or in

part at any time upon an exit fee of (a) two percent (2.00%) of the Revolving Loan Commitment if the obligations are paid in full during

the first year after the closing date, or (b) one percent (1.00%) of the Revolving Loan Commitment if the obligations are paid in full

one year after the closing date, provided, that, the exit fee will be waived if such prepayment occurs in connection with the refinancing

of the obligations with Bank of America, N.A., as lender.

In addition, we are required to pay

a monthly unused line fee equal to one-half of one percent (0.50%) per annum on the difference between the Revolving Loan Commitment

and the average outstanding principal balance of the revolving loan(s) for such month.

The obligations under the GBC Credit Facility

may be prepaid in whole or in part at any time upon an exit fee of (a) two percent (2.00%) of the Revolving Loan Commitment if the obligations

are paid in full during the first year after the closing date, or (b) one percent (1.00%) of the Revolving Loan Commitment if the obligations

are paid in full one year after the closing date, provided, that, the exit fee will be waived if such prepayment occurs in connection

with the refinancing of the obligations with Bank of America, N.A., as lender.

loans and other obligations of the Company under the GBC Credit Facility are secured by substantially all of the tangible and intangible

assets of the Company (including, without limitation, intellectual property) pursuant to the terms of the Agreement and the Intellectual

Property Security Agreement entered into by and among the Company and GBC on July 28, 2023.

April 2024, we notified GBC of a certain event of default with respect to the Company’s anticipated failure to maintain the EBITDA

covenant for the trailing three (3) month period ended April 30, 2024, (the “Default”).

On May 8, 2024, the Company received a waiver from GBC, (the “Waiver”) which

waived the Default, subject to satisfaction of the following conditions:

(i) receipt of a counterpart of the Waiver duly executed by

(ii) receipt of the waiver fee of $20,000;

(iii) receipt of the representations and warranties from us that after giving effect to

the Waiver, the representations and warranties contained in the Agreement, the Waiver and the other Loan Documents shall be true and

and (iv) after giving effect to the Waiver, no additional event of default shall have occurred and be continuing on and as of

the effective date of the Waiver.

May 31, 2024, we entered into the Third Amendment to Loan and Security Agreement (the “Third Amendment”) with GBC which amended

certain terms of the Loan and Security Agreement dated July 28, 2023, including but not limited to amending the EBITDA Minimum financial

In consideration for the Third Amendment, the Company agreed to pay GBC a non-refundable amendment fee of $50,000 in cash.

Under the Agreement,

upon an occurrence of an event of default, GBC may, at its option, declare its commitments to the Company to be terminated and all

obligations to be immediately due and payable, all without demand, notice or further action of any kind required on the part of GBC,

and/or exercise other remedies available to it among other things including its rights as a secured party.

On August 30, 2024, GBC

agreed to waive the Company’s non-compliance with, and the effects of its non-compliance under, various representations,

financial covenants and non-financial covenants relating to the Company’s restatement (the “August Waiver”).

On January 17, 2025, GBC agreed to waive our non-compliance with, and the effects of our non-compliance under, various

representations, financial covenants and non-financial covenants relating to our financial restatements and our failure to maintain the

EBITDA Minimum for certain financial periods (the “January Waiver”).

As a result of the August Waiver and January Waiver, the Company expects that its revolving credit facility remains available subject to meeting certain

lending criteria under the Loan Agreement.

On January 22, 2025, we entered into Amendment No.

4 to Loan and Security Agreement (the “Fourth Amendment”)

with GBC which amended certain terms of the Loan and Security Agreement dated July 28, 2023, as amended, relating to the EBITDA Minimum

financial covenant of the Company.

In consideration for the Fourth Amendment, the Company agreed to pay GBC a non-refundable amendment

fee of $50,000 in cash, as follows:

(i) $25,000 shall be due and payable on March 1, 2025, and (ii) $25,000 shall be due and payable on

April 1, 2025.

We rely on our credit

facility with GBC to meet our anticipated capital resources and to fund our operations.

The availability of the GBC Credit Facility

is subject to satisfaction of certain affirmative covenants and financial covenants including maintaining minimum tangible net

worth, and certain limitations on dispositions of assets.

The Agreement also contains usual and customary events of default (with

customary grace periods, as applicable) and provides that, upon the occurrence of an event of default, payment of all amounts

payable under the GBC Credit Facility may be accelerated and/or GBC’s commitment may be terminated by GBC without any action

Due to our inability to satisfy certain financial covenants and other covenants under the agreement with GBC we have

previously needed to obtain waivers from GBC.

In the event we are unable to comply with terms of the Agreement or to obtain a waiver

from GBC, funds will be unavailable to us under the GBC Credit Facility, and our operations, financial condition and business will be

materially and adversely affected.

Stock Market Notices

On October 16, 2024, the Company received a notice (the “October Notice”) from the Listing Qualifications Department (the

“Staff”) of the Nasdaq Stock Market (“Nasdaq”) stating that because the Company had not yet filed its Form 10-K

for the fiscal year ended June 30, 2024 (the “Form 10-K”), the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1)

(the “Listing Rule”), which requires Nasdaq-listed companies to timely file all required periodic financial reports with the

Securities and Exchange Commission.

On November 20, 2024, the Company received a notice (the “November Notice,” together with the October Notice, the “Notices”)

from the Staff of Nasdaq stating that because the Company had not yet filed its Form 10-Q for the period ended September 30, 2024 (the

“Form 10-Q”) and because the Company remains delinquent in filing its Form 10-K (together with the Form 10-Q, the “Delinquent

Reports”), the Company does not comply with the Listing Rule.

The notices stated that the

Company had until December 16, 2024 to submit a plan to regain compliance with the Listing Rule (the “Plan”).

If Nasdaq accepts

the Company’s Plan to regain compliance, then Nasdaq may grant the Company up to 180 calendar days from the Form 10-K filing due

date, or until April 14, 2025, to file the Delinquent Reports to regain compliance.

If Nasdaq does not accept the Company’s Plan, then the

Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel.

The Notice had no immediate effect on the listing of the Company’s common stock on Nasdaq.

On December 16, 2024, the Company filed a plan with Nasdaq to regain Nasdaq compliance, including requesting an extension to file the

Delinquent Reports by no later than April 14, 2025.

If Nasdaq does not accept the Company’s Plan and the Company fails to prevail

in its appeal to Nasdaq, or if the Company fails to meet the Nasdaq listing requirements and do not regain compliance, the Company’s

common stock will be subject to delisting by Nasdaq.

event our common stock is delisted, our stock price and market liquidity of our stock will be adversely affected which will impact the

ability of the Company’s stockholders to sell securities in the market.

Further, delisting from Nasdaq

markets could also have other negative effects, including potential loss of confidence by partners, lenders, suppliers and employees.

assets of the Company (including, without limitation, our intellectual property) pursuant to the terms of the Loan Agreement and the

Intellectual Property Security Agreement dated July 28, 2023.

and Waivers to Credit Facility

November 2, 2023, we entered into Amendment No.

1 to the Loan Agreement (the “First Amendment”) which amended certain definition

of the Subordinated Debt referenced in the Loan Agreement as Subordinated Debt owed by us to Cleveland Capital L.P.

(“Cleveland”)

pursuant to that certain Subordinated Unsecured Promissory Note, dated as of November 1, 2023, in the aggregate principal amount of $2,000,000.

January 30, 2024, we entered into Amendment No, 2 to the Loan Agreement (the “Second Amendment”) which amended certain terms

of the Loan Agreement including but not limited to, (i) increasing the commitment amount from $15.0 million to $16.0 million, (ii) adding

an additional non-refundable closing fee in the amount of $7,500 in cash for the increase in the commitment amount to $16 million, (iii)

amending the definition of “Eligible Accounts;” and (iv) amending the EBITDA Minimum financial covenant.

In consideration

for the Second Amendment, we paid GBC a non-refundable amendment fee of $10,000 in cash, in addition to the $7,500 non-refundable closing

May 8, 2024, we received a waiver from GBC, which waived an event of default with respect to our anticipated failure to maintain the

EBITDA covenant for the trailing three (3) month period ended April 30, 2024.

May 31, 2024, we entered into Amendment No.

3 to the Loan Agreement (the “Third Amendment”) which amended certain terms of

the Loan and Security Agreement dated July 28, 2023, including but not limited to amending the EBITDA Minimum financial covenant.

consideration for the Third Amendment, we paid GBC a non-refundable amendment fee of $50,000 in cash.

August 30, 2024, GBC agreed to waive our non-compliance with, and the effects of its non-compliance under, various representations, financial

covenants and non-financial covenants relating to our financial restatements.

January 17, 2025, we received a waiver which, subject to the satisfaction of certain conditions which were met, waived our non-compliance

with and the effects of our non-compliance under, various representations, financial covenants and non-financial covenants relating to

our financial restatements and our failure to maintain the EBITDA Minimum for certain financial periods.

January 22, 2025, we entered into Amendment No.

4 to the Loan Agreement (the “Fourth Amendment”) which amended certain terms

relating to the EBITDA Minimum financial covenant.

In consideration for the Fourth Amendment, we paid GBC a non-refundable amendment

fee of $50,000.

July 16, 2025, we entered into Amendment No.

5 to the Loan Agreement (the “Fifth Amendment”) which amended the definition

of the maturity date to August 31, 2025, unless otherwise extended pursuant to the terms of the Loan Agreement, provided however, upon

the occurrence of either (i) an extension of the due date of Cleveland Note to a date no earlier than September 29, 2027, or (ii) the

conversion of all of the outstanding obligations under the Cleveland Note into equity of the Registrant, the maturity date will automatically

extend to July 31, 2027.

In consideration for the Fifth Amendment, we paid GBC a non-refundable amendment fee of $112,500.

September 4, 2025, we entered into Amendment No.

6 to Loan Agreement (the “Sixth Amendment”), with the effective date of

August 31, 2025, which amended certain terms of the Loan Agreement, including (i) modifications to the EBITDA minimum financial covenant

of the Company, and (ii) an extension of the maturity date from August 31, 2025 to September 15, 2025, subject to acceleration or further

extension pursuant to the terms of the Loan Agreement.

Upon the closing of the Private Placement on September 15, 2025, all the outstanding

obligations under the Cleveland Note were applied in full satisfaction of the subscription by Cleveland in the Private Placement.

Upon the conversion

of all of the outstanding obligations under the Cleveland Note into equity of the Company, the Maturity Date of the Revolving Note was

automatically extended to July 31, 2027.

a result of the aforementioned waivers and amendments, and extension of the Maturity Date to July 31, 2027, we expect that the revolving

credit facility will remain available subject to meeting certain lending criteria under the Loan Agreement.

OF OUR BUSINESS

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equipment manufacturer (OEM) approvals:

Many of our energy storage packs have been tested and approved for use by Toyota

Material Handling USA, Inc., Crown Equipment Corporation, and The Raymond Corporation, among the top global lift truck manufacturers

by revenue according to Material Handling & Logistics.

We also provide a “private label” Class 3 Walkie Pallet Pack

to two major top 10 forklift OEMs.

Many of our energy storage packs have been tested and approved for use by Toyota Material

Handling USA, Inc., Crown Equipment Corporation, and The Raymond Corporation, among the top global lift truck manufacturers by revenue

according to Material Handling & Logistics.

We also provide a “private label” Class 3 Walkie Pallet Pack to two major

top 10 forklift OEMs.

product offering and scalable design:

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Battery Management System:

Critical to our success is our innovative, proprietary and versatile battery management system

(“BMS’) that optimizes the performance of our lithium-ion energy solutions and provides a platform for adding new

energy storage solution features, including customized telemetry (energy storage solution data and reports available anytime, anywhere) for customers who choose this option.

Critical to our success is our innovative, proprietary and versatile battery management system (“BMS’)

that optimizes the performance of our lithium-ion energy solutions and provides a platform for adding new energy storage solution features,

including customized telemetry (energy storage solution data and reports available anytime, anywhere) for customers who choose this option.

The BMS serves as the brain of the energy storage solution, managing cell balancing, charging, discharging, monitoring and communication

between the pack and the forklift.

Our “next generation” versatile BMS is currently part of our full product lines and

provides significant product features for improved customer productivity.

Our BMS also enables ongoing feature development for

reduced cost and higher performance.

We have included our proprietary telemetry solution, branded “SkyBMS” which

provides real time reports on pack performance, health, and remaining useful life.

Our “next generation” versatile BMS is currently part of our full product lines and provides

significant product features for improved customer productivity.

Our BMS also enables ongoing feature development for reduced cost and

higher performance.

We have included our proprietary telemetry solution, branded “SkyBMS” which provides real time reports

on pack performance, health, and remaining useful life.

design, develop, test and sell our energy storage solutions for use in a broad range of lift trucks, industrial equipment including airport

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Within each of these product segments, we offer a range of power and equipment solutions.

energy storage solution system design is adaptable with three core design modules used in our entire family of small, medium, and

large pack forklift products.

A scalable modular design allows for core modules to be configured to address a variety of unique

power and space requirements.

We also have the capability to offer varying chemistries and configurations based on the specific

Currently, our energy storage packs use lithium iron phosphate (LiFePO4) battery cells, which we source from a single supplier located in China, that meet our power, reliability, safety and other specifications.

Our BMS works with several battery

configurations providing the flexibility to use battery cells developed and manufactured by other suppliers.

We believe we can

readily adapt our energy storage packs to incorporate new chemistries as they become available in the future in order to meet

changing customer preferences and to reduce the cost of our products.

energy storage solution system design is adaptable with three core design modules used in our entire family of small, medium, and large

pack forklift products.

A scalable modular design allows for core modules to be configured to address a variety of unique power and space

requirements.

We also have the capability to offer varying chemistries and configurations based on the specific application.

our energy storage packs use lithium iron phosphate (LiFePO4) battery cells, which we source from a single supplier located in China,

that meet our power, reliability, safety and other specifications.

Our BMS works with several battery configurations providing the flexibility

to use battery cells developed and manufactured by other suppliers.

We believe we can readily adapt our energy storage packs to incorporate

new chemistries as they become available in the future in order to meet changing customer preferences and to reduce the cost of our products.

also offer 24-volt onboard chargers for our Class 3 Walkie Pallet Packs, and smart “wall mounted” chargers for larger applications.

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Product Update

During fiscal 2024, we introduced new product designs to respond to customer requests and to allow for greater operational

efficiencies for us.

Some of the improvements included higher capacities for extra-long and demanding shifts, easier servicing, cost

efficiencies, and other features to solve a variety of existing performance challenges of customer operations.

We intend to continue

to develop and to introduce new product designs for margin enhancement, part commonality and improved serviceability.

fiscal 2024, we also introduced the next generation of Material Handling and GSE products, the G2 line.

These seven new products

greatly extend the reach of Flux packs in the Class 1 and 2 forklift market as well as enhancing our offerings for aircraft ground

support equipment.

Ranging from 36 to 80 volts and capacities between 210 and 840 amp-hours, the G2 systems deliver power and

We also added a second “private label” program for a top 10 OEM for Class 3 products.

This program accelerates

our sales and distribution capabilities including representing a leverage point to sell our larger packs to end customers.

shown to provide wider exposure to new potential customers.

fiscal 2025, we advanced our product portfolio with new designs aimed at addressing customer needs while improving our own

manufacturing and service operations, including lowering costs to improve margins.

These updates emphasized higher energy capacities to support longer and more demanding shifts, simplified service

access and cost efficiencies.

Collectively, these improvements were intended to resolve performance challenges in customer applications

and strengthen our ability to deliver reliable efficient energy solutions.

Looking forward, we plan to continue introducing designs that

enhance margins, increase part commonality and improve serviceability.

2025, we introduced the G96, a higher-voltage battery system with greater capacity for intensive applications in the Airline and Aviation

industry and improved the developed G80 design that simplifies maintenance and enhances usability for GSE.

Beyond hardware, we began developing

and showcasing SkyEMS, our energy management solution, marking a significant step in building a more comprehensive energy ecosystem.

initiatives reflect our commitment to ramping up integrated energy solutions by combining advanced hardware with intelligent software.

Our focus is on creating a connected platform that optimizes performance, improves serviceability, and expands the long-term value we deliver

to customers.

Historically,

lithium-ion battery solutions were unable to compete with lead acid and propane-based solutions in industrial applications on the

basis of cost.

However, the supply of lithium-ion batteries has rapidly expanded, leading to price declines of eighty-five percent

(85%) since 2010 according to BloombergNEF.

BloombergNEF also estimates that lithium-ion battery prices, which averaged $1,160 per

kilowatt hour in 2010, were $156 per kWh in 2019 and dropped to $115 per kWh in 2024.

Lithium metal itself represents well

less than 5% of the cost of our energy storage solutions.

lithium-ion battery solutions were unable to compete with lead acid and propane-based solutions in industrial applications on the basis

However, the supply of lithium-ion batteries has rapidly expanded, leading to price declines of eighty-five percent (85%) since

2010 according to BloombergNEF.

BloombergNEF also estimates that lithium-ion battery prices, which averaged $1,160 per kilowatt hour

in 2010, were $156 per kWh in 2019 and dropped to $115 per kWh in 2024.

Our unit costs to source lithium in 2025 did not materially change

Lithium metal itself represents well less than 5% of the cost of our energy storage solutions.

sharp decline in the price of lithium-ion batteries has made these energy solutions more cost competitive.

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more favorable environmental and performance characteristics.

Reducing our cost per kilowatt of energy enables our value proposition to attract increasing customer demand.

Reducing our cost per kilowatt of energy enables our value proposition

to attract increasing customer demand.

Handling Equipment

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product extensions in the industrial equipment market.

These markets include not only the sale of lithium-ion energy storage solutions for new

equipment but also a replacement market for existing lead acid battery packs.

to Modern Materials Handling, worldwide new lift truck orders reached approximately 1.4 million units in 2017.

The Industrial Truck Association

(“ITA”) has estimated that approximately 200,000 lift trucks had been sold yearly since 2013 in North America (Canada, the

United States and Mexico), with sales relatively evenly distributed between electric rider (Class 1 and Class 2), motorized hand (Class

3), and internal combustion engine powered lift trucks (Class 4 and Class 5).

The ITA estimates that electric products represented approximately

sixty-nine percent (69%) of the North American shipments in 2020, reflecting the long-term trend of increasing mix of electric products

versus internal combustion (propane) engines.

Driven by growth in global manufacturing, e-commerce and construction, Research and Markets

expects that the global lift truck market will grow at a compound annual growth rate of six and four-tenths percent (6.4%) through 2024.

customers include OEMs, lift equipment dealers, battery distributors and end users.

Our customers vary from small companies to Fortune

500 companies.

the year ended June 30, 2024, we had three (3) major customers that each represented more than 10% of our revenues on an individual

basis, and together represented approximately $47,178,000 or 78% of our total revenues.

During the year ended June 30, 2023, we had

three (3) major customers (as restated) that each represented more than 10% of our revenues on an individual basis, and together

represented approximately $53,140,000 (as restated) or 80% (as restated) of our total revenues.

During the year ended June 30, 2022,

the Company had four (4) major customers that each represented more than 10% of its revenues on an individual basis, and together

represented approximately $35,229,000 (as restated) or 83% (as restated) of its total revenues.

These markets include not only the sale of lithium-ion energy storage solutions

for new equipment but also a replacement market for existing lead acid battery packs.

to Worldwide Industrial Truck Statistics (“WITS”), new lift truck sales reached approximately 2.1 million units

worldwide in 2023.

Approximately 431,000 units were sold in the Americas, primarily Canada, the United States and Mexico, spread

relatively evenly between electric rider (Class 1 and Class 2), motorized hand (Class 3) and internal combustion engine

powered lift trucks (Class 4 and Class 5).

The International Truck Association (“ITA”) estimates that electric products represented approximately sixty-seven percent

(67%) of the North American shipments in 2023, reflecting the long-term trend of increasing mix of electric products versus internal

combustion (propane) engines.

Driven by growth in global manufacturing, e-commerce and construction, Research and Markets expects

that the global lift truck market will grow at a compound annual growth rate of 5.7% from 2024 through

customers include OEMs, forklift equipment dealers, battery distributors and end users.

Our customers vary from small companies to

Fortune 500 companies.

the year ended June 30, 2025, we had three major customers that each represented more than 10% of our revenues on an individual basis,

and together represented approximately $48,288,000 or 73% of our total revenues.

During the year ended June 30, 2024, we had three major

customers that each represented more than 10% of our revenues on an individual basis, and together represented approximately $47,178,000

or 78% of our total revenues.

Toward Lithium-ion Battery Technologies

lithium-ion energy storage solutions offer higher performance, environmental benefits, and lower life cycle costs, and these features are driving an

increase in demand for safe and efficient alternatives to lead acid and propane-based power products.

proposition of lithium-ion energy storage solutions includes a number of factors impacting customer preferences:

lithium-ion energy storage solutions offer higher performance, environmental benefits, and lower life cycle costs, and these features

are driving an increase in demand for safe and efficient alternatives to lead acid and propane-based power products.

The value proposition

of lithium-ion energy storage solutions includes a number of factors impacting customer preferences:

of Charge/Run Times :

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the ability to optimize the design of the truck based on a smaller footprint for lithium-ion instead of lead acid.

Lithium-ion energy storage solutions provide power dense solutions with extended cycle life, reduced maintenance and improved operational

performance, resulting in lower total cost of ownership.

Lithium-ion energy storage solutions provide power dense solutions with extended cycle life, reduced maintenance and improved

operational performance, resulting in lower total cost of ownership.

Energy Used :

we believe our lithium-ion energy storage solutions use 20-50% less energy based on our internal studies comparing lithium-ion

to lead acid.

sell our products through several different channels including OEMs, lift equipment dealers and battery distributors as well as

directly to end users.

In the industrial motive market, OEMs sell their lift products through dealer networks and directly to end

Because of environmental issues associated with lead acid batteries and to preserve customer choice, industrial lift

products are typically sold without a battery pack or an energy storage solution.

Equipment dealers source battery packs from battery distributors and battery

pack suppliers based on demand or in response to customer specifications.

End customers may specify a specific type and manufacturer

of battery pack to the equipment dealer or may purchase battery packs from battery distributors or directly from battery

direct sales staff cover major geographies throughout North America and collaborate with our sales partners who have an

established customer base.

we believe our lithium-ion energy storage solutions use 20-50% less energy based on our internal studies comparing

lithium-ion to lead acid.

sell our products through several different channels including OEMs, lift equipment dealers and battery distributors as well as directly

to end users.

In the industrial motive market, OEMs sell their lift products through dealer networks and directly to end customers.

of environmental issues associated with lead acid batteries and to preserve customer choice, industrial lift products are typically sold

without a battery pack or an energy storage solution.

Equipment dealers source battery packs from battery distributors and battery pack

suppliers based on demand or in response to customer specifications.

End customers may specify a specific type and manufacturer of battery

pack to the equipment dealer or may purchase battery packs from battery distributors or directly from battery suppliers.

direct sales staff cover major geographies throughout North America and collaborate with our sales partners who have an established customer

We plan to hire additional sales staff to support our expected sales growth.

In addition, we have

developed a nationwide sales network of relationships with equipment OEMs, their dealers, and battery distributors.

To support our

products, we have a nationwide network of service providers, typically forklift equipment dealers and battery distributors, who

provide local customer service to large customers.

We also maintain a customer support center and provide Tech Bulletins and

training to our service and sales network out of our corporate headquarters.

We have partnered with an experienced GSE distributor

to market our lithium-ion energy storage solutions for airport GSE.

In addition, we have developed a nationwide sales

network of relationships with equipment OEMs, their dealers, and battery distributors.

To support our products, we have a nationwide

network of service providers, typically forklift equipment dealers and battery distributors, who provide local customer service to large

We also maintain a customer support center and provide Tech Bulletins and training to our service and sales network out of

our corporate headquarters.

We have partnered with an experienced GSE distributor to market our lithium-ion energy storage solutions

for airport GSE.

Manufacturing

than manufacture our own battery cells, our battery cells are currently sourced from one manufacturer located in China.

We source the

remainder of the components primarily from numerous vendors in the United States.

the remainder of the components primarily from numerous vendors in the United States.

We developed our BMS to be agnostic to a

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We have made great strides in sourcing alternate suppliers and parts to minimize future global supply chain

We are continuing to monitor and test potential new cell technologies on an ongoing basis to help mitigate our supply

Using Lean Manufacturing principles, our final assembly, testing and shipping of our energy storage solutions are

completed within our ISO 9001 certified facility in Vista, California, which includes six assembly lines.

We are continuing to monitor and test potential new battery cell technologies on an ongoing basis to help mitigate our

supply chain risks.

Using Lean Manufacturing principles, our final assembly, testing and shipping of our energy storage solutions

are completed within our ISO 9001 certified facility in Vista, California, which includes six assembly lines.

buy chargers from several sources, including a U.S.

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engineers design, develop, test, and service our advanced lithium-ion energy storage solutions at our company headquarters in Vista,

We believe our strengths include our core competencies and capabilities in designing and developing proprietary

technology for our BMS, lean manufacturing processes, systems engineering, engineering application, and software engineering for

both energy storage solutions and telemetry.

We believe that our ability to develop new features and technology for our BMS is

essential to our growth strategy.

We believe our strengths include our core competencies and capabilities in designing and developing proprietary technology

for our BMS, lean manufacturing processes, systems engineering, engineering application, and software engineering for both energy storage

solutions and telemetry.

We believe that our ability to develop new features and technology for our BMS is essential to our growth strategy.

we continue to develop and expand our product offerings, we anticipate that research and development will continue to be a substantial

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improving performance, reliability and durability of our energy storage solutions for our customers and on lowering our costs of production.

competitors in the lift equipment market in years past have been primarily major lead acid battery manufacturers, including Stryten

Energy, East Penn Manufacturing Company, EnerSys Corporation, and Crown Battery Corporation.

However, more recently our potential

customer base has become increasingly aware of the performance, lifetime cost, and environmental advantages of lithium-ion

At the same time, our competitor base offering lithium-ion solutions has grown from a number of early-stage businesses

and now includes several larger companies.

The increasing market activity reflects the double-digit sales growth of lithium-ion

based solutions.

competitors in the lift equipment market in years past have been primarily major lead acid battery manufacturers, including Stryten Energy,

East Penn Manufacturing Company, EnerSys Corporation, and Crown Battery Corporation.

However, more recently our potential customer base

has become increasingly aware of the performance, lifetime cost, and environmental advantages of lithium-ion solutions.

At the same time,

our competitor base offering lithium-ion solutions has grown from a number of early-stage businesses and now includes several larger

The increasing market activity reflects the double-digit sales growth of lithium-ion based solutions.

The sales channel includes.

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We believe having the UL Listing covering our core products gives us a significant differentiating competitive

In addition, because our BMS is not reliant on any specific battery cell chemistry, we believe we can adapt rapidly to

changes in advanced battery technology or customer preferences.

In addition, because our BMS is not reliant on any specific battery cell chemistry, we believe we can adapt rapidly to changes

in advanced battery technology or customer preferences.

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

To accomplish this, we rely

on a combination of patents pending, patent applications, trade secrets, including know-how, employee and third-party nondisclosure agreements,

on a combination of patents, patent applications pending, 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

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of June 30, 2025, we have two issued U.S.

We have filed one new U.S.

patent application on advanced technology related to lithium-ion

energy storage solutions.

patents and one U.S.

patent pending pertaining to advanced technology related to

lithium-ion energy storage solutions.

The technology behind these three patents is designed to:

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We have pending applications to register

SkyBMS and SkyEMS.

We also believe that we have common law trademark rights to certain marks in addition to those which we have registered.

obtain a limited number of components and supplies included in our products from a small group of suppliers.

During the year ended June

30, 2024, we had one (1) supplier who accounted for more than 10% of our total purchases, which represented approximately $12,437,000

or 27% of our total purchases.

Company obtains components and supplies included in its products from a group of suppliers.

We do not manufacture the battery cells used

in our energy storage solutions.

Our battery cells, which are an integral part of our energy storage solutions, are sourced from a single

manufacturer located in China.

In response to business uncertainties resulting from tariffs and increased tariff levels imposed by the U.S.

on goods imported into the U.S., as discussed in the previous risk factor, we temporarily paused imports from our supplier in China.

pause was short-lived as both parties quickly agreed to modified terms.

At this time, neither the pause in shipments nor the modified

terms have materially affected the Company’s operations.

However, further escalation of tariffs between the U.S.

and China could

have a material effect on our ability to cost-effectively source from our supplier in China

the year ended June 30, 2025, we had one supplier who accounted for more than 10% of our total purchases, which represented approximately

$15,902,000 or 28% of our total purchases.

During the year ended June 30, 2022 the Company had one (1) supplier who accounted for more than 10% of its total purchases which represented

approximately $13,884,000 or 28% of its total purchases

We currently single

source our battery cells from one Chinese supplier.

We are actively pursuing backup cell suppliers as part of our growth strategy,

efforts to manage the risks of having only one supplier of battery cells and strategies to address potential exposure to tariffs.

addition, with our expanding portfolio of energy storage solutions and expected higher volumes, we will also seek to lower the costs of our component

parts through a network of suppliers

During the year ended June 30, 2024, we had one supplier who accounted for more than 10% of

our total purchases, which represented approximately $12,437,000 or 27% of our total purchases.

Safety Regulations .

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Capital Resources

of June 30, 2024, we had 119 employees.

We engage outside consultants to assist our efforts in business development, operations, finance and other functions from time

None of our employees is currently represented by a trade union.

of June 30, 2025 and August 31, 2025, we had 101 and 99 employees, respectively.

We engage outside consultants to assist our efforts in business

development, operations, finance and other functions from time to time.

None of our employees is currently represented by a trade

corporate headquarters and production facility totals approximately 63,200 square feet and is located in Vista, California.

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Company website Internet address is www.fluxpower.com.

We make available on our website our annual reports on Form 10-K, quarterly

reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or

15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the

Securities and Exchange Commission (“SEC”).

Other than the information expressly set forth in this annual report, the

information contained, or referred to, on our website is not part of this annual report.

We make available on our website our annual reports on Form 10-K, quarterly reports

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1 unchanged sentence

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 1. Business