Flux Power Holdings, Inc. 10-K

ITEM 9A - CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of the end of the period covered by this Form we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Act of 1934. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be included in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, relating to the Company, including our consolidated subsidiaries, and was made known to them by others within those entities, particularly during the period when this Form was being prepared. Previously, and as of June 30, 2025, our procedures were judged not effective because of the material weaknesses identified in our internal control over financial reporting. However, based upon our current evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2026. Management’s Report on Internal Control over Financial Reporting The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurances with respect to financial statement preparation and presentation. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on management’s evaluation of our disclosure controls and procedures as of June 30, 2025, we determined material weaknesses existed in our internal control over financial reporting. The material weaknesses were based on a lack of sufficient personnel resources with technical accounting expertise related to certain aspects of the financial reporting process as well as the evaluation that our controls over internal control were ineffective, including controls over the timing of inventory audits, the review of inventory for obsolescence and the completeness of data compilation used to estimate warranty liability. The weaknesses were remediated with the addition of a new Chief Financial Officer and additional highly qualified accounting personnel, as well as by the implementation of specific and effective procedures. 50 Table of Contents Under the supervision of management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission – Integrated Framework (2013) and subsequent guidance prepared by the Commission specifically for smaller public companies as of June 30, 2026. Based on that evaluation, our management concluded that our internal control over financial reporting were effective as of June 30, 2026. The Company’s management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Additionally, controls can be circumvented by collusion or improper management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected, and there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. This Form does not include an attestation report of the Company’s independent registered public accounting firm regarding the effectiveness of the Company’s internal control over financial reporting, as such report is not required due to the Company’s status as a smaller reporting company. Change in Internal Control over Financial Reporting Except as set forth above, there have been no changes in the Company’s internal control over financial reporting during the fiscal year ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. ITEM 9B - OTHER INFORMATION None . ITEM 9C - DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENTS INSPECTIONS Not Applicable. 51 Table of Contents PART III ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The following table and text set forth the names and ages of our current directors, executive officers and significant employees as of August 14, 2026. Our Board of Directors (“Board”) is comprised of only one class. All of the directors will serve until the next annual meeting of stockholders or until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. There are no family relationships among any of the directors and executive officers. From time to time, our directors have received compensation in the form of cash and equity grant for their services on the Board. Age Position Krishna C. Vanka (1) 43 Director, Chief Executive Officer Kevin S. Royal 62 Chief Financial Officer Jeffrey C. Mason (2) 56 Chief Operating Officer Lisa Walters-Hoffert (3)(4) 67 Director Dale Robinette (3)(5) 62 Director Michael Johnson 78 Director Mark F. Leposky (3)(6) 62 Director (1) Mr. Vanka was appointed as our Director, Chief Executive Officer and President, effective March 10, 2025. (2) Mr. Mason was promoted from Vice President of Operations to Chief Operating Officer effective August 1, 2025. (3) Independent Director. (4) Chairperson of the Audit Committee, Member of the Compensation Committee and the Nominating and Governance Committee. (5) Chairman of the Board, Chairperson of the Compensation Committee, Member of the Audit Committee and the Nominating and Governance Committee. (6) Chairperson of the Nominating and Governance Committee, Member of the Audit Committee and the Compensation Committee. There are no arrangements or understandings between our directors and executive officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer. Business Experience Krishna Vanka, Chief Executive Officer and President and Director . Mr. Vanka was appointed as our Chief Executive Officer and President and a director effective March 10, 2025. Mr. Vanka has over 18 years of experience in building, scaling, managing and transforming technology companies in sectors including renewable energy, electric vehicle charging, and others. Mr. Vanka has served as SVP & Chief Digital Officer (CEO of Digital Division) at Fluence Energy, Inc. (Nasdaq: FLNC), from August 2022 to January 2024. In this role, he was responsible for the company’s strategic growth, profitability, and operational execution, achieving a 300% increase in Annual Recurring Revenue (ARR) and overseeing a fivefold expansion in Assets Under Management (AUM). He played a key role in integrating product lines of two cloud-based software offerings, Mosaic and Nispera, into a unified platform, driving innovation in Fluence’s software offerings, including Battery Management Systems (BMS), IoT devices, and Core OS. Mosaic was recognized for its state-of-the-art machine learning algorithms and AI-driven capabilities, winning Time magazine’s 2022 Best Innovations award in the software category. Prior to joining FLNC, Mr. Vanka was a founding team member and Chief Product Officer at InCharge Energy from November 2020 to August 2022, where he led product development and technology strategy for EV fleet charging solutions. From April 2018 to November 2020, he was the founder and Chief Executive Officer of MyShoperoo Inc, an enterprise-focused on-demand shopping platform that optimized last-mile delivery efficiency through intelligent aggregation algorithms. Mr. Vanka holds a Bachelor of Applied Science in Computer Engineering from the University of Ottawa and an MBA from Georgia State University. He has also completed executive leadership programs at UC Berkeley, including coursework in Artificial Intelligence for Business Strategies. Based on Mr. Vanka’s executive and management experience, plus his experience with the operations and strategy of the Company, the Company believes Mr. Vanka is qualified to be on the Board. 52 Table of Contents Kevin S. Royal, Chief Financial Officer and Secretary. Mr. Royal was appointed as our Chief Financial Officer and Secretary effective March 4, 2024. Mr. Royal has over 20 years of experience with publicly traded companies, leading Finance, Accounting, IT, HR, Legal, Investor Relations, and M&A. Since 2023, Mr. Royal has served as a consultant for MCA Financial group. Prior to joining the Company, Mr. Royal served as Executive Vice President and Chief Financial Officer of Zovio Inc. (f/k/a Bridgepoint Education, Inc.) from October 2015 until September 2022. Mr. Royal also previously served as Senior Vice President, Chief Financial Officer, Treasurer and Secretary of Maxwell Technologies, Inc., a developer, manufacturer and marketer of energy storage and power delivery solutions from April 2009 to May 2015. Mr. Royal has held a series of senior finance positions, including appointments as senior vice president and chief financial officer within the semiconductor industry. Mr. Royal has also served as an auditor for 10 years with Ernst & Young LLP, where he became a certified public accountant. Mr. Royal received his Bachelor of Business Administration in Accounting from Harding University and is a Certified Public Accountant in the State of California (inactive). Jeffrey C. Mason, Chief Operating Officer. Mr. Mason has served as our Chief Operating Officer since August 2025, our Vice President of Operations from December 2021 to July 2025 and our Director of Manufacturing from January 2021 to December 2021. Prior to joining the Company, Mr. Mason was the plant manager at NEO Tech from March 2017 to January 2021 after being promoted from Director of Operations from December 2013 to March 2017. Mr. Mason has also worked for Sumitomo Electric Interconnect Products, Inc., Radio Design Labs, Inc., and Motorola Inc. during his career. Mr. Mason received his Master of Business Administration in International Business in 2015 and his Bachelor of Business Administration/Management in 2013 from North Central University. Mr. Mason is also Total Productive Maintenance (TPM) Instructor Certified by the Japan Institute of Plant Maintenance, Tokyo, Japan. Lisa Walters-Hoffert, Director. Ms. Walters-Hoffert was appointed to our Board on June 28, 2019. Ms. Walters-Hoffert was a co-founder of Daré Bioscience, Inc. and following the company’s merger with Cerulean Pharma, Inc. in July of 2017, became Chief Financial Officer of the surviving public company (Nasdaq: DARE) and served in this role until January of 2024. For over twenty-five (25) years, Ms. Walters-Hoffert was an investment banker focused on small-cap public companies in the technology and life science sectors. From 2003 to 2015, Ms. Walters-Hoffert worked at Roth Capital Partners as Managing Director in the Investment Banking Division. Ms. Walters-Hoffert has held various positions in the corporate finance and investment banking divisions of Citicorp Securities in San José, Costa Rica and Oppenheimer & Co, Inc. in New York City, New York. Ms. Walters-Hoffert has served as a member of the Board of Directors of the San Diego Venture Group, as Past Chair of the UCSD Librarian’s Advisory Board, and as Past Chair of the Board of Directors of Planned Parenthood of the Pacific Southwest. Ms. Walters-Hoffert currently serves as a member of the Board of Directors of The Elementary Institute of Science in San Diego. Ms. Walters-Hoffert graduated magna cum laude from Duke University with a B.S. in Management Sciences. As a senior financial executive with over twenty-five years of experience in investment banking and corporate finance and based on Ms. Walters-Hoffert’s expertise in audit, compliance, valuation, equity finance, mergers, and corporate strategy, the Company believes Ms. Walters-Hoffert is qualified to be on the Board. Dale T. Robinette, Director . Mr. Robinette was appointed to our Board on June 28, 2019 and our Chairman on March 10, 2025. Mr. Robinette previously served as our lead independent director from September 10, 2021 to March 10, 2025. Mr. Robinette has been a CEO Coach and Master Chair since 2013 as an independent contractor to Vistage Worldwide, Inc., an executive coaching company. In addition, since 2013 Mr. Robinette has been providing business consulting related to top-line growth and bottom-line improvement through his company EPIQ Development. From 2013 to 2019, Mr. Robinette was the Founder and CEO of EPIQ Space, a marketing website for the satellite industry, a member-based community of suppliers promoting their offerings. Mr. Robinette was with Peregrine Semiconductor, Inc., a manufacturer of high-performance RF CMOS integrated circuits, from 2007 to 2013 in two roles as a Director of Worldwide Sales as well as the Director of the High Reliability Business Unit. Mr. Robinette started his career from 1991 to 2007 at Tyco Electronics Ltd. (known today as TE Connectivity Ltd.), a passive electronics manufacturer, in various sales, sales leadership and product development leadership roles. Mr. Robinette received a Bachelor of Science degree in Business Administration, Marketing from San Diego State University. Based on Mr. Robinette’s executive and management experience, plus his experience building companies, the Company believes Mr. Robinette is qualified to be on the Board. 53 Table of Contents Michael Johnson, Director. Mr. Johnson has been our director since July 12, 2012. Mr. Johnson has been a director of Flux Power since it was incorporated. Since 2002, Mr. Johnson has been a director and the chief executive officer of Esenjay Petroleum Corporation (Esenjay Petroleum), a Delaware company located in Corpus Christi, Texas, which is engaged in the business oil exploration and production. Mr. Johnson’s primary responsibility at Esenjay Petroleum is to manage the business and company as chief executive officer. Mr. Johnson is a director and beneficial owner of Esenjay Investments LLC, a Delaware limited liability company engaged in the business of investing in companies, and an affiliate of the Company beneficially owning approximately 26% of our outstanding shares, including common stock underlying options, and warrants that were exercisable or convertible or which would become exercisable or convertible within sixty (60) days. Mr. Johnson received a Bachelor of Science degree in mechanical engineering from the University of Southwestern Louisiana. As a result of Mr. Johnson’s leadership and business experience, he is an industry expert in the natural gas exploration industry and brings a wealth of management and successful company building experience to the board. Based on the foregoing, the Company believes Mr. Johnson is qualified to be on the Board. Mark F. Leposky, Director. Mr. Leposky was elected to our Board on April 18, 2024. Mr. Leposky has over 30 years of executive experience in operations, engineering, supply chain, product and commercial roles. Mr. Leposky is currently the Executive Vice President and Chief Supply Chain Officer at Topgolf Callaway Brands and has led the company’s supply chain, engineering, and operations organization among other responsibilities since 2012. From 2018 to 2022, he also served as the EVP of Global Operations, Accessories and Licensing, and previously served as Senior Vice Present of Global Operations, Accessories and Licensing from 2012 and 2018 for Topgolf Callaway Brands. Prior to joining Topgolf Callaway Brands, Mr. Leposky was the Co-Founder, President and Chief Executive Officer of Gathering Storm dba Tmax Gear from 2005 to 2011, Chief Supply Chain Officer at Fisher Scientific International from 2004 to 2005 and Chief Operations Officer at TaylorMade Adidas Golf from 2002 to 2004, and has held executive roles at The Coca-Cola Company and United Parcel Service. Mr. Leposky holds a Bachelor of Sciences degree in Industrial Technology from Southern Illinois University, and an MBA from the Keller Graduate School of Management. In addition, Mr. Leposky is also a 16-year infantry veteran of the US Army and Army National Guard, and an avid golfer. Based on the above qualifications, the Board believes Mr. Leposky’s extensive executive experience within the consumer product and service industry qualifies Mr. Leposky to serve on the Board. Involvement in Certain Legal Proceedings To the best of our knowledge, during the past ten years, none of our directors or executive officers were involved in any of the following: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. Board Leadership Structure and Role in Risk Oversight Our Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure to provide independent oversight of management. Our Board is currently led by a Chairman of the Board who also serves as our Chief Executive Officer. The Board understands that the right Board leadership structure may vary depending on the circumstances, and our independent directors periodically assess these roles and the Board leadership to ensure the leadership structure best serves the interests of the Company and stockholders. 54 Table of Contents On September 10, 2021, the Board adopted the Lead Independent Director Guidelines (“Guidelines”). The Guidelines provide that when the positions of Chief Executive Officer and Chairman of the Board are combined or the Chairman is not an independent director, the independent directors will appoint a lead independent director to serve with the authority and responsibility described in such Guidelines, and as the Board and/or the independent directors may determine from time to time. The Guidelines are available on our website at www.fluxpower.com. The responsibilities of the Lead Independent Director, if required under the Guidelines, include, among others: (i) serving as primary intermediary between non-employee directors and management; (ii) working with the Chairman of the Board to approve the agenda and meeting schedules for the Board; (iii) working with the Chairman of the Board as to the quality, quantity and timeliness of the information provided to directors; (iv) in consultation with the Nominating and Governance Committee, reviewing and reporting on the results of the Board and Committee performance self-evaluations; (v) calling additional meetings of independent directors; and (vi) serving as liaison for consultation and communication with stockholders. Prior to March 10, 2025, Mr. Dutt, previously held the Chairman and Chief Executive Officer roles, and Mr. Robinette previously served as the Lead Independent Director elected by the majority of the Board on September 10, 2021. On March 10, 2025, Mr. Dutt, our former chairman and Chief Executive Officer, notified the Company’s Board of his decision to retire and resign from his position as director, Chairman of the Board, Chief Executive Officer and President of the Company and its wholly owned subsidiary, Flux Power, effective March 10, 2025. Mr. Dutt’s stepping down is for personal reasons and not due to any disagreement with the Company’s management team or the Company’s Board on any matter relating to the operations, policies or practices of the Company or any issues regarding the Company’s accounting policies or practices. In light of the anticipated transition, the Nominating and Governance Committee of the Board determined that it would be in the best interest of the Company and its stockholders if the position of Chairman of the Board was held by a non-executive member of the Board on a going forward basis. Accordingly, upon Mr. Dutt’s retirement on March 10, 2025, the Board appointed Mr. Dale T. Robinette as the new Chairman of the Board, effective March 10, 2025. Since Mr. Robinette is an independent director, we do not and will not have a Lead Independent Director until required to have one under our Independent Director Guidelines. In connection with Mr. Dutt’s retirement, the Board appointed Mr. Robinette as the new Chairman of the Board, effective March 10, 2025. Mr. Robinette also currently serves as an independent director, chairperson of the Compensation Committee, and a member of both the Audit Committee and the Nominating and Governance Committee. In addition, the Board appointed Mr. Vanka as director, Chief Executive Officer and President of the Company and Flux Power, effective March 10, 2025. Mr. Robinette possesses understanding and knowledge of the business and affairs of the Company and has the ability to devote a substantial amount of time to serve as our Chairman. The Board believes the appointment of a strong independent director as Chairman and the use of regular executive sessions of the non-management directors, along with a majority of the Board being composed of independent directors, allow the Board to maintain effective oversight of management. In addition, our Board as a whole has responsibility for risk oversight. Our Board exercises this risk oversight responsibility directly and through its committees. The risk oversight responsibility of our Board and its committees is informed by reports from our management teams to provide visibility to our Board about the identification, assessment and management of key risks, and our management’s risk mitigation strategies. Our Board has primary responsibility for evaluating strategic and operational risk, including related to significant transactions. Our audit committee has primary responsibility for overseeing our major financial and accounting risk exposures, and, among other things, discusses guidelines and policies with respect to assessing and managing risk with management and our independent auditor. Our compensation committee has responsibility for evaluating risks arising from our compensation and people policies and practices. Our nominating and corporate governance committee has responsibility for evaluating risks relating to our corporate governance practices. Our committees and management provide reports to our Board on these matters. 55 Table of Contents In its governance role, and particularly in exercising its duty of care and diligence, our Board is responsible for ensuring that appropriate risk management policies and procedures are in place to protect the Company’s assets and business. Our Board has broad and ultimate oversight responsibility for our risk management processes and programs and executive management is responsible for the day-to-day evaluation and management of risks to the Company. Board Composition, Committees and Independence Under the rules of Nasdaq, “independent” directors must make up a majority of a listed company’s Board of Directors. In addition, applicable Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit and compensation committees be independent within the meaning of the applicable Nasdaq rules. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. Our Board has undertaken a review of the independence of each director and considered whether any director has a material relationship with us that could compromise the director’s ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board determined that Ms. Walters-Hoffert, and Messrs. Robinette and Leposky are independent directors as defined in the listing standards of Nasdaq and SEC rules and regulations. A majority of our directors are independent, as required under applicable Nasdaq rules. As required under applicable Nasdaq rules, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. Board Committees Our Board has established an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee. The composition and responsibilities of each of the committees is described below. Our Board has determined that each member of the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee meets the applicable rules and regulations regarding “independence” and also that each member of our Audit Committee, the Compensation Committee, and the Nominating and Governance Committee is free of any relationship that would interfere with his or her individual exercise of independent judgment with regard to the Company. Audit Committee The Audit Committee of the Board of Directors currently consists of three independent directors of which at least one, the Chairperson of the Audit Committee, Ms. Walters-Hoffert, qualifies as an audit committee financial expert within the meaning of SEC regulations. Messrs. Robinette and Leposky serve as members of the Audit Committee. The Audit Committee’s duties are to recommend to our Board of Directors the engagement of the independent registered public accounting firm to audit our consolidated financial statements and to review our accounting and auditing principles. The Audit Committee reviews the scope, timing and fees for the annual audit and the results of audit examinations performed by any internal auditors and independent public accountants, including their recommendations to improve the system of accounting and internal controls. The Audit Committee will at all times be composed exclusively of directors who are, in the opinion of our Board of Directors, free from any relationship that would interfere with the exercise of independent judgment as a committee member and who possess an understanding of consolidated financial statements and generally accepted accounting principles. Our Audit Committee operates under a written charter, which is available on our website at www.fluxpower.com. 56 Table of Contents Compensation Committee The Compensation Committee currently consists of three independent directors. The Compensation Committee establishes our executive compensation policy, determines the salary and bonuses of our executive officers and recommends to the Board stock option grants or other incentive equity awards for our executive officers. Mr. Robinette is the Chairperson of the Compensation Committee, and Ms. Walters-Hoffert and Mr. Leposky are members of the Compensation Committee. Each of the members of our Compensation Committee are independent under Nasdaq’s independence standards for compensation committee members. Our chief executive officer often makes recommendations to the Compensation Committee and the Board concerning compensation of other executive officers. The Compensation Committee seeks input on certain compensation policies from the chief executive officer. Our Compensation Committee operates under a written charter, which is available on our website at www.fluxpower.com. Nominating and Governance Committee The Nominating and Governance Committee currently consists of three independent directors. The Nominating and Governance Committee is responsible for matters relating to the corporate governance of our Company and the nomination of members of the Board and committees of the Board. Mr. Leposky is the Chairperson of the Nominating and Governance Committee. Ms. Walters-Hoffert and Mr. Robinette are members of the Nominating and Governance Committee. Each of the members of our Nominating and Governance Committee is independent under Nasdaq’s independence standards. The Nominating and Governance Committee operates under a written charter, which is available on our website. We seek directors with established strong professional reputations and experience in areas relevant to the strategy and operations of our business. We seek directors who possess the qualities of integrity and candor, who have strong analytical skills and who are willing to engage management and each other in a constructive and collaborative fashion. We also seek directors who have the ability and commitment to devote significant time and energy to serve on the Board and its committees. We believe that all of our directors meet the foregoing qualifications. We do not have a formal policy with respect to diversity. Code of Business Conduct and Ethics Our Board has adopted a Code of Business Conduct and Ethics (the “Code”) that applies to all of our directors, officers, and employees. Any waivers of any provision of this Code for our directors or officers may be granted only by the Board or a committee appointed by the Board. Any waivers of any provisions of this Code for an employee or a representative may be granted only by our chief executive officer or principal accounting officer. We have filed a copy of the Code with the SEC and have made it available on our website at https://www.fluxpower.com/corporate-governance. In addition, we will provide any person, without charge, a copy of this Code. Requests for a copy of the Code may be made by writing to the Company at is c/o Flux Power Holdings, Inc., 2685 S. Melrose Drive, Vista, California 92081. 57 Table of Contents Indemnification Agreements We execute a standard form of indemnification agreement (“Indemnification Agreement”) with each of our Board members and executive officers (each, an “Indemnitee”). Pursuant to and subject to the terms, conditions and limitations set forth in the Indemnification Agreement, we agreed to indemnify each Indemnitee, against any and all expenses incurred in connection with the Indemnitee’s service as our officer, director and or agent, or is or was serving at our request as a director, officer, employee, agent or advisor of another corporation, partnership, joint venture, trust, limited liability company, or other entity or enterprise but only if the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interest, and in the case of a criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. In addition, the indemnification provided in the indemnification agreement is applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven. Additionally, the Indemnification Agreement establishes processes and procedures for indemnification claims, advancement of expenses and costs and contribution obligations. Insider Trading Policy and Rule 10b5-1 Trading Programs We have adopted an Insider Trading Policy which prohibits directors, officers and all other employees, or consultants or contractors, as well as family members of such persons (or any other person subject to the policy) from engaging in any transaction involving a purchase or sale of our securities, including any offer to purchase or offer to sell, based on material nonpublic information regarding the Company (“Material Nonpublic Information”). Under our Insider Trading Policy and pursuant to SEC Rule 10b5-1, directors, officers and employees may establish written programs which permit (i) automatic trading of the Company’s stock through a third-party broker or (ii) trading of the Company’s stock by an independent person (such as an investment bank) who is not aware of Material Nonpublic Information at the time of a trade. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director, executive officer, or other employee when entering into the plan, without further direction from such insider. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and Annual Reports concerning their ownership, of common stock and other of our equity securities on Forms 3, 4, and 5, respectively. Executive officers, directors and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of Forms 3, 4 and 5 and amendments thereto filed electronically with the SEC during the most recent fiscal year, we believe that all reports required by Section 16(a) for transactions in the fiscal year ended June 30, 2026 were timely filed. 58 Table of Contents ITEM 11 - EXECUTIVE COMPENSATION Compensation for our Named Executive Officers The following table sets forth information concerning all forms of compensation earned by our named executive officers during fiscal 2026 and fiscal 2025 for services provided to the Company and its subsidiary. Non-Equity Incentive Stock Option Plan All Other Name Fiscal Salary Bonus Awards Awards (1) Compensation Compensation Total and Principal Position Year ($) ($) ($) ($) ($) ($) ($) Krishna C. Vanka (2) 2026 $ 400,000 $ – $ – $ – $ – $ – $ 400,000 Chief Executive Officer and President 2025 $ 400,000 $ – $ – $ – $ – $ – $ 400,000 Kevin S. Royal 2026 $ 346,698 $ 100,980 $ – $ – $ – $ – $ 446,901 Chief Financial Officer and Corporate Secretary 2025 $ 336,600 $ – $ – $ – $ – $ – $ 336,600 Jeffrey C. Mason (3) 2026 $ 300,000 $ 70,125 $ – $ – $ – $ – $ 370,125 Chief Operating Officer 2025 $ 300,000 $ – $ – $ – $ – $ – $ 300,000 (1) The grant date fair value was determined in accordance with the provisions of FASB ASC Topic No. 718 using the Black-Scholes valuation model with assumptions described in more detail in the notes to our audited financial statements included in this prospectus. (2) Mr. Vanka was appointed as the Company’s Chief Executive Officer and President, as well as a member of the Board, effective March 10, 2025. (3) Mr. Mason was promoted from Vice President of Operations to Chief Operating Officer, effective August 1, 2025. Narrative Explanation of Compensation Arrangements with Named Executive Officers Base Salary. On August 1, 2025, pursuant to the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), the Board approved the following salaries (the “Fiscal 2026 Annual Salary”) for the following named executive officers, effective for fiscal 2026: Salary for Salary for Position Fiscal 2025 Fiscal 2026 Krishna C. Vanka Chief Executive Officer $ 400,000 $ 400,000 Kevin S. Royal Chief Financial Officer $ 336,600 $ 346,698 Jeffrey C. Mason Chief Operating Officer $ 300,000 $ 300,000 Annual Bonus Plan. On November 5, 2020, the Board approved an annual cash bonus plan (the “Annual Bonus Plan”) which allows the Compensation Committee and/or the Board of the Company to set the amount of bonus each fiscal year and the performance criteria. Executive officers and all employees (other than part-time employees and temporary employees) are eligible to participate in the Annual Bonus Plan (“Participants”) as long as the Participant remains an active regular employee of the Company. The Annual Bonus Plan was effective for the fiscal year ended June 30, 2021 and is effective each fiscal year thereafter (the “Plan Year”). For each Plan Year, the Compensation Committee establishes an aggregate amount of allocable Bonus under the Annual Bonus Plan and determines the performance goals applicable to a bonus during a Plan Year (the “Participation Criteria”). The Participation Criteria may differ from Participant to Participant and from bonus to bonus. The Participation Criteria for each Plan Year is based on the Company achieving certain performance targets based on annual revenue, gross margin, operating expense and new business development. All of the Company’s executive officers are eligible to participate in the Annual Bonus Plan. 59 Table of Contents On October 20, 2023, the Board approved an amended and restated annual cash bonus plan (the “Amended Annual Bonus Plan”) which allows the Compensation Committee and/or the Board of the Company to set the amount of bonus each fiscal year and the performance criteria. Executive officers and all employees (other than part-time employees and temporary employees) are eligible to participate in the Amended Annual Bonus Plan (“Participants”) as long as the Participant remains an active regular employee of the Company. The Amended Annual Bonus Plan is effective for fiscal year 2024 and each fiscal year thereafter (the “Plan Year”). For each Plan Year, the Compensation Committee will establish an aggregate amount of allocable Bonus under the Amended Annual Bonus Plan and determine the performance goals applicable to a bonus during a Plan Year (the “Participation Criteria”). The Participation Criteria may differ from Participant to Participant and from bonus to bonus. All of the Company’s executive officers are eligible to participate in the Amended Annual Bonus Plan. The Amended Annual Bonus Plan was approved by the Board in anticipation of the Company adopting its “clawback” policy applicable to its executive officers as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Fiscal 2026 Bonuses Under the Amended Bonus Plan. On August 1, 2025, pursuant to the recommendation of the Compensation Committee, the Board also approved the bonus pool and performance criteria for the Amended Annual Bonus Plan for Fiscal 2026 (the “2026 Bonus”). For fiscal 2026, the performance goals applicable to a bonus are based on the Company achieving certain targets based on the Company’s full year revenue, Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization and stock-based compensation) for fiscal 2026, and functional goals (the “Financial Targets”), in addition to individual performance objectives and goals (the “2026 Performance Matrix”). The Board approved the following cash bonuses under the 2026 Bonus for the following executive officers. Maximum Position Payout (1) Krishna C. Vanka Chief Executive Officer $ 1,600,000 Kevin S. Royal Chief Financial Officer $ 832,422 Jeffrey C. Mason Chief Operating Officer $ 650,250 (1) Full maximum payout includes stock option grants and assumes targets reached as set forth in the 2026 Performance Matrix. Equity Incentive Awards. We did not grant any stock options or other equity awards to any of our named executive officers in fiscal 2025. On August 1, 2025 (the “Fiscal 2026 Grant Date”), pursuant to the recommendation of the Compensation Committee, the Board approved the grant of (i) time-based restricted stock units (“Time RSUs”) and performance-based restricted stock units (“PSUs”) to Mr. Vanka under the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) and (ii) stock options (the “Fiscal 2026 Options”) under the 2021 Plan to certain of the Company’s then-current named executive officers, in each case, as set forth in the table below. Name Number of and Principal Position Award Shares Vesting Schedule Krishna C. Vanka RSUs 121,951 Annually over 3 years, with the first vesting date on July 1, 2026 Chief Executive Officer and President PSUs 182,927 (1) Cliff vest on the third anniversary of July 1, 2025, subject to achievement of performance goals Kevin S. Royal Chief Financial Officer and Corporate Secretary Options 84,150 Annually over 3 years from the date of grant Jeffrey C. Mason Chief Operating Officer Options 56,100 Annually over 3 years from the date of grant (1) Represents the maximum number of shares eligible to vest assuming achievement of the applicable performance goals. 122,562 shares would become eligible to vest upon achievement of the applicable revenue and net income goals. 60,365 shares would become eligible to vest upon achievement of the applicable market price goals. 60 Table of Contents Benefit Plans. We do not have any profit-sharing plan or similar plans for the benefit of our officers, directors or employees. However, we may establish such a plan in the future. Under their respective employment agreements, as described in further detail below, Messrs. Vanka and Royal, among other things, are entitled to reimbursement for all reasonable business expenses incurred in performing services. They are also eligible to participate in all customary employee benefit plans or programs generally made available to the senior executive officers. Outstanding Equity Awards at 2026 Fiscal Year End The following table sets forth certain information concerning unexercised options and unvested RSUs and PSUs held by our named executive officers as of June 30, 2026. Our named executive officers did not hold any other types of equity awards as of June 30, 2026. Award Grant Award Expiration Number of Securities Underlying Unexercised Options Number of Securities Underlying Unexercised Options Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Option Exercise Price Number of Securities That Have Not Market Value of Securities That Have Not Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Date Date Exercisable Unexercisable Options ($) Vested Vested (1) Vested Krishna C. Vanka 8/1/2025 (2) – – – – 121,951 $ 104,878 – 8/1/2025 (3) 6/30/2028 – – – – 182,927 $ 157,317 – Kevin S. Royal (4) 3/4/2024 3/4/2034 36,666 18,337 – $ 5.00 – – – 8/1/2025 8/1/2035 – 84,150 – $ 1.88 – – – Jeffrey C. Mason (5) 10/31/2022 10/31/2032 26,239 8,747 – $ 3.43 – – – 10/20/2023 10/20/2033 36,619 18,313 – $ 3.36 – – – 8/1/2025 8/1/2035 – 56,100 – $ 1.88 – – – (1) Market value is based on the fair market value of our common stock at the close of trading on June 30, 2026, the last trading day of fiscal 2026, which was $0.86. (2) Mr. Vanka’s outstanding RSUs vest annually over 3 years on each of July 1, 2026, July 1, 2027 and July 1, 2028. (3) Mr. Vanka’s outstanding PSUs become eligible to vest based on the achievement of revenue performance, net income performance and market price goals. Any PSUs eligible to vest will cliff vest on the third anniversary of July 1, 2025. As of June 30, 2026, achieving the performance conditions is considered not probable. (4) From date of grant, Mr. Royal’s 2024 option grant vests annually over 3 years and his 2025 option grant vests annually over two years. (5) From date of grant, Mr. Mason’s 2022 option grant vests annually over 4 years, his 2023 option grant vests annually over three years and his 2024 option grant vests annually over two years. Equity Compensation Plan Information. On February 17, 2015, our stockholders approved our 2014 Equity Incentive Plan (“2014 Plan”), which was amended on July 23, 2018 and on November 5, 2020. The 2014 Plan authorizes the issuance of awards for up to 1,000,000 shares of our common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units, restricted stock awards and unrestricted stock awards to officers, directors and employees of, and consultants and advisors to, the Company or its affiliates. We granted 100,192 stock options under the 2014 Plan during fiscal 2024. We granted 51,171 restricted stock units under the 2014 Plan during fiscal 2024. The 2014 Plan expired on November 26, 2024, at which time no future stock or stock option awards could be granted. On April 29, 2021, at the Company’s annual stockholders meeting, the 2021 Equity Incentive Plan (the “2021 Plan”) was approved by our stockholders. The 2021 Plan authorizes the issuance of awards for up to 2,000,000 shares of our common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units, restricted stock awards and unrestricted stock awards to officers, directors and employees of, and consultants and advisors to, the Company or its affiliates. We granted 934,012 stock options under the 2021 Plan during fiscal 2024. We did not grant any stock options under the 2021 Plan during fiscal 2025. We granted 200,000 and 17,057 restricted stock units under the 2021 Plan during fiscal 2025 and fiscal 2024, respectively. On May 28, 2025, our stockholders approved the 2025 Equity Incentive Plan (the “2025 Plan”). The 2025 Plan authorizes the issuance of awards for up to 1,000,000 shares of common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units, restricted stock awards and unrestricted stock awards to officers, directors and employees of, and consultants and advisors to, the Company or its affiliates. As of June 30, 2026, we had 368,997 options outstanding and exercisable and 121,951 RSUs outstanding under the 2025 Plan, the 2021 Plan and the 2014 Plan. 61 Table of Contents Summary of Employment Agreement with Mr. Krishna Vanka. On March 10, 2025, we entered into an executive employment agreement with Mr. Vanka, pursuant to which he agreed to serve as our Chief Executive Officer and President (the “Vanka Employment Agreement”). Pursuant to the terms of the Vanka Employment Agreement, Mr. Vanka receives an annual base salary of $400,000, subject to annual performance reviews by the Board or Compensation Committee. As an initial incentive for achieving key financial milestones, we agreed to award Mr. Vanka a cash bonus of $100,000 if the Company’s average EBITDA is net positive over the next nine months (end of the calendar year). Beginning fiscal year 2026, Mr. Vanka will have the ability to achieve a cash bonus of up to 150% of base salary based on budget performance goals as determined by the Board or the Compensation Committee. Beginning in fiscal year 2026, Mr. Vanka will be granted Time RSUs equivalent to 50% of his base salary, which are eligible to vest in three (3) equal annual installments over three (3) years. He will also be eligible for PSUs, with a target of 50% of his base salary and a maximum of 150%, based on budget performance goals. Any earned PSUs will cliff-vest on the third (3 rd ) anniversary of the grant date. Additionally, the Vanka Employment Agreement provides that Mr. Vanka may be terminated at any time by the Company with or without cause. If Mr. Vanka is terminated without cause or upon a Change in Control (as defined in the Vanka Employment Agreement), he will receive: (a) twelve (12) months of base salary paid in a lump sum; and (b) twelve (12) months of continued life, medical, and dental insurance coverage, with the Company covering the cost subject to the same employee contribution as active employees. Additionally, in the event of a Change in Control termination, Time RSUs and any PSUs, for which the performance criteria are satisfied, will be subject to double-trigger acceleration. Mr. Vanka is subject to a non-compete obligation during the term of his employment and confidentiality obligations that extend beyond termination. The Vanka Employment Agreement also includes other customary clauses and arrangements. Summary of Employment Agreement with Mr. Kevin S. Royal. On February 22, 2024, we entered into an Employment Agreement with Mr. Kevin S. Royal, in connection with Mr. Royal’s appointment as Chief Financial Officer and Corporate Secretary, which provides for an annual base salary of $330,000, effective March 4, 2024 (the “Royal Employment Agreement”). The Royal Employment Agreement includes terms relating to change in control, termination, severance, benefits and the acceleration of vesting of options and restricted stock units upon certain events. In addition, Mr. Royal will be eligible for a 60% cash bonus, as a percentage of base salary, and incentive stock options to purchase up to 55,000 shares of the Company’s common stock (the “Options”) under the 2021 Plan. The Options will be subject to the terms and conditions provided in the form of Incentive Stock Option Agreement under the 2021 Plan, will have an exercise price based on the Company’s 10-day volume weighted average price on the grant date, and will expire ten (10) years from the grant date and vest in four (4) equal annual instalments commencing one year after the grant date. Clawback Policy To comply with Section 10D of the Securities Exchange Act of 1934, as amended, Rule 10D-1 promulgated under the Securities Exchange Act of 1934, as amended, and Nasdaq Listing Rule 5608 applicable to incentive-based compensation for executive officers of listed companies, in November 2023, the Board adopted a Policy for the Recovery of Erroneously Awarded Compensation (the “Clawback Policy”) with an effective date of October 2, 2023. Current executive officers of the Company have agreed in writing to the terms and conditions of the Clawback Policy. Under the Clawback Policy, if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the federal securities laws, the Company will recoup any erroneously awarded incentive-based compensation from the Company’s current and former executive officers. Administration of the Clawback Policy will be by the Compensation Committee of the Company. 62 Table of Contents Director Compensation Below is a summary of the total compensation of our non-employee directors during fiscal 2026. Mr. Vanka, our chief executive officer and president, received no compensation for his service as a director and is not included in the below table. The compensation Mr. Vanka received as an employee of the Company is included in the section titled “Executive Compensation” above. Fees Earned or Paid In Cash Stock Awards (1) All Other Compensation Total $ $ $ $ Lisa Walters-Hoffert $ 62,500 $ 80,000 $ - $ 142,500 Dale Robinette $ 81,250 $ 80,000 $ - $ 161,250 Michael Johnson $ 50,000 $ 80,000 $ - $ 130,000 Mark F. Leposky $ 61,250 $ 80,000 $ - $ 141,250 (1) Represents the fair value of the RSUs granted. As of June 30, 2026, our non-employee directors held RSUs. Lisa Walters-Hoffert and Dale Robinette each held 3,948 exercisable options and Michael Johnson held 9,948. Non-Employee Director Compensation Policy Cash Compensation Pursuant to the compensation program for our non-employee directors that was approved by the Board on March 1, 2025 for fiscal 2026 and 2027, each member of our Board of Directors who is not an employee is eligible to receive the following annual cash retainers for their service on our Board: Annual Retainer Board Member $ 50,000 Plus (as applicable): Lead Independent Director $ 20,000 Audit Committee Chair $ 7,500 Compensation Committee Chair $ 5,000 Nominating/Governance Committee Chair $ 5,000 Audit Committee Member $ 3,750 Compensation Committee Member $ 2,500 Nominating/Governance Committee Member $ 2,500 Equity Compensation In addition, our non-employee directors are eligible to receive an annual equity grant of RSUs or stock options, at their option, equal to the amount of $80,000 divided by the fair market value of the equity grant, with all grants subject to a one year vesting requirement subject to their continued service on our Board. The fair market value of the grants is based upon the closing stock price on the grant issuance date. On May 28, 2025, each of our non-executive directors was granted 50,000 RSUs under the 2021 Plan, which fully vested on May 28, 2026. On July 31, 2026, each of our non-executive directors was similarly granted RSUs or options under the 2021 Plan, which are scheduled to vest in full on March 26, 2027. 63 Table of Contents ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS As used in this section, the term beneficial ownership with respect to a security is defined by Rule 13d-3 under the Exchange Act, as consisting of sole or shared voting power (including the power to vote or direct the vote) and/or sole or shared investment power (including the power to dispose of or direct the disposition of) with respect to the security through any contract, arrangement, understanding, relationship or otherwise, subject to community property laws where applicable. As of June 30, 2026, we had a total of 21,621,642 shares of common stock issued and outstanding. The following table sets forth, as of June 30, 2026, information concerning the beneficial ownership of shares of our common stock held by our directors, our named executive officers, our directors and executive officers as a group, and each person known by us to be a beneficial owner of more than five percent (5%) of our outstanding common stock. Unless otherwise indicated, the business address of each of our directors, executive officers and beneficial owners of more than five percent (5%) of our outstanding common stock is c/o Flux Power Holdings, Inc., 2685 S. Melrose Drive, Vista, California 92081. Each person has sole voting and investment power with respect to the shares of our common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated. Name and Address of Beneficial Owner (1) Shares Beneficially Owned Percentage of Ownership Officers and Directors Michael Johnson, Director 4,506,045 (2) 20.3 % Krishna Vanka, Chief Executive Officer, President, and Director 77,100 (3) * Kevin S. Royal, Chief Financial Officer and Secretary 43,961 (4) * Jeffrey C. Mason, Chief Operating Officer 96,983 (5) * Mark F. Leposky, Director 67,057 (6) * Lisa Walters-Hoffert, Director 98,055 (7) * Dale Robinette, Director 128,484 (8) * All Officers and Directors as a group (7 people) 5,017,685 22.4 % 5% Stockholders Esenjay Investments LLC 4,061,799 (2) 18.8 % Cleveland Capital Management L.L.C. 1,521,809 (9) 7.1 % 1250 Linda Street, Suite 304 Rocky River, OH 44116 Formidable Asset Management, LLC 3,013,948 (10) 14.0 % 221 E Fourth Street, Suite 2700 Cincinnati OH 45202 * Represents less than 1% of shares outstanding. (1) All addresses above are 2685 S. Melrose Drive, Vista, California 92081, unless otherwise stated. (2) Includes (i) 106,311 shares of common stock held by Mr. Johnson, (ii) 9,948 shares of common stock issuable upon exercise of stock options,(iii) 218,658 shares of common stock issuable upon the conversion of 23,233 shares of Series A Preferred Stock (as defined herein) issuable upon the exercise of 23,233 Prefunded Warrants (as defined herein) held by Mr. Johnson, (iv) 109,329 shares of common stock issuable upon the exercise of 109,329 Common Warrants (as defined herein) held by Mr. Johnson, and (v) 4,061,799 shares of common stock held by Esenjay Investments LLC, of which Mr. Johnson is the sole director and beneficial owner. (3) Mr. Vanka was appointed Chief Executive Officer, President and director on March 10, 2025. Includes (i) 24,300 shares of common stock issuable upon the conversion of 2,582 shares of Series A Preferred Stock issuable upon the exercise of 2,582 Prefunded Warrants, and (ii) 12,150 shares of common stock issuable upon the exercise of 12,150 Common Warrants and (iii) 40,650 shares of common stock issuable to Mr. Vanka pursuant to restricted stock units vesting within 60 days. (4) Includes (i) 36,663 shares of common stock issuable upon exercise of stock options exercisable within 60 days, (ii) 4,865 shares of common stock issuable upon the conversion of 517 shares of Series A Preferred Stock issuable upon the exercise of 517 Prefunded Warrants and (iii) 2,433 shares of common stock issuable upon the exercise of 2,433 Common Warrants. (5) Mr. Mason was promoted from Vice President of Operations to Chief Operating Officer effective August 1, 2025. Includes (i) 8,127 shares of common stock, (ii) 62,858 shares of common stock issuable upon exercise of stock options, (iii) 4,865 shares of common stock issuable upon the conversion of 517 shares of Series A Preferred Stock issuable upon the exercise of 517 Prefunded Warrants, and (iv) 2,433 shares of common stock issuable upon the exercise of 2,433 Common Warrants and (v) 81,558 shares of common stock issuable upon exercise of stock options exercisable within 60 days. (6) Consists of 67,057 shares of common stock. (7) Includes (i) 94,107 shares of common stock and (ii) 3,948 shares of common stock issuable upon exercise of stock options. (8) Includes (i) 106,311 shares of common stock, (ii) 3,948 shares of common stock issuable upon exercise of stock options, (iii) 12,150 shares of common stock issuable upon the conversion of 1,291 shares of Series A Preferred Stock issuable upon the exercise of 1,291 Prefunded Warrants and (iv) 6,075 shares of common stock issuable upon the exercise of 6,075 Common Warrants. (9) Based on Amendment No. 10 to Schedule 13G filed jointly by Cleveland, Rocky River Specific Opportunities Fund LLC, Wade Massad, John Shiry and Cleveland Capital Management, L.L.C. with the SEC on July 24, 2026, reporting information as of June 30, 2026, reflects (i) 1,450,736 shares of common stock held by certain private funds managed by Cleveland Capital Management, L.L.C., or by its principals, and hold shared voting and dispositive power with respect to such shares, which includes (a) 1,272,522 shares of common stock beneficially owned by Cleveland Capital L.P. and (b) 178,214 shares of common stock beneficially owned by Rocky River Specific Opportunities Fund LLC, (ii) 71,073 shares of common stock individually held by Mr. Massad and (iii) 50,000 shares of common stock individually held by Mr. Shiry. (10) Based on Amendment No. 4 to Schedule 13G filed by Formidable Asset Management, LLC with the SEC on December 16, 2025. Includes (i) 666,571 shares of common stock held by Formidable Asset Management, LLC and (ii) 2,347,377 shares of common stock held by certain accounts managed by Formidable Asset Management, LLC, which hold shared dispositive power with respect to such shares. Based on Schedule 13D filed by Formidable Asset Management, LLC with the SEC on October 31, 2023 and additional information available to the Company from the Private Placement (as defined herein). Includes (i) 548,226 shares of common stock held by Formidable Asset Management, LLC, (ii) 2,726,099 shares of common stock held by certain accounts managed by Formidable Asset Management, LLC, and hold shared voting and dispositive power with respect to such shares, (iii) 242,899 shares of common stock issuable upon the conversion of 25,809 shares of Series A Preferred Stock issuable upon the exercise of 25,809 Prefunded Warrants held by certain accounts managed by Formidable Asset Management, LLC and (iv) 124,649 shares of common stock issuable upon the exercise of 124,649 Common Warrants held by certain accounts managed by Formidable Asset Management, LLC. 64 Table of Contents Equity Compensation Plan Information The following table provides certain information with respect to our equity compensation plans in effect as of June 30, 2026: Number of securities to be issued upon exercise of outstanding options, and settlement of RSUs Weighted-average exercise price of outstanding options, and issuance price of RSUs Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) (a) (b) (c) Equity compensation plans approved by stockholders (1) 129,148 $ 5.66 - Equity compensation plans approved by stockholders (2) 265,237 $ 3.61 180,130 Equity compensation plans approved by stockholders (3) - - 1,000,000 Equity compensation plans approved by stockholders (4) - - 214,560 Total 996,660 4.18 1,765,060 (1) Represents shares of common stock reserved for issuance under the 2014 Equity Incentive Plan (the “2014 Plan”) which was approved by our stockholders on February 17, 2015, amended on October 25, 2017 and expired on November 26, 2024. No shares of the Company’s common stock are available for future grants under the 2014 Plan. (2) Represents shares of common stock reserved for issuance under the 2021 Equity Incentive Plan (the “2021 Plan”) which was approved by our stockholders on April 29, 2021. (3) Represents shares of common stock reserved for issuance under the 2025 Equity Incentive Plan (the “2025 Plan”) which was approved by our stockholders on May 28, 2025. (4) Represents the number of shares of common stock reserved as authorized for the grant of options under the Flux Power Holdings, Inc. 2023 Employee Stock Purchase Plan (the “2023 ESPP”), which was approved by our stockholders on April 20, 2023. 65 Table of Contents ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The following includes a summary of certain relationships and transactions since July 1, 2024 and any currently proposed transactions, to which we were or are to be a participant, in which (1) the amount involved exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent (1%) of the average of our total assets for the last two completed fiscal years, and (2) any of our directors, executive officers or holders of more than five percent (5%) of our capital stock, or any affiliate or member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest other than compensation and other arrangements that are described under the section titled “Executive Compensation.” Pursuant to the Audit Committee’s written charter, our Audit Committee has the responsibility to review, approve and oversee transactions between the Company and any related person (as defined in Item 404 of Regulation S-K) and any potential conflict of interest situations on an ongoing basis, in accordance with our policies and procedures, and to develop policies and procedures for the Audit Committee’s approval of related party transactions. Line of Credit Facility and Subordinated Unsecured Promissory Note On November 2, 2023, we entered into a Credit Facility Agreement (the “Credit Facility”) with Cleveland, a related party due to equity ownership. The Credit Facility provides us with a line of credit of up to $2,000,000 for working capital purposes. In connection with the Subordinated LOC, we issued a subordinated unsecured promissory note for $2,000,000 (the “Commitment Amount”) in favor of Cleveland. Pursuant to the terms of the Credit Facility, Cleveland agreed to make loans (each such loan, an “Advance”) up to such Lender’s Commitment Amount to us from time to time, until July 31, 2027 (the “Due Date”). The Revolving Note accrues interest at Secured Overnight Financing Rate plus nine percent (9%) per annum on each Advance from and after the date of disbursement of such Advance. All of our indebtedness, obligations and liabilities to Cleveland are subject to the rights of GBC, pursuant to a Subordination Agreement dated on or about November 2, 2023, by and between Cleveland and GBC (the “Subordination Agreement”). Subject to the Subordination Agreement, we may, from time to time, prior to the Due Date, draw down, repay, and re-borrow on the Note, by giving notice to Cleveland of the amount to be requested to be drawn down. Subject to the Subordination Agreement, the Note is payable upon the earlier of (i) the Due Date or (ii) on occurrence of an event of Default (as defined in the Revolving Note). As consideration of Cleveland’s commitment to provide the Advances to us, we issued Cleveland warrants to purchase 41,196 shares of common stock (the “Advance Warrants”) which rights are represented by a warrant certificate (“Warrant Certificate”). Subject to certain ownership limitations, the Advance Warrants are exercisable immediately from the date of issuance, expire on the five (5) year anniversary of the date of issuance and have an exercise price of $3.24 per share. The exercise price of the Advance Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the common stock. In the event of a Triggering Event (as defined in the Warrant Certificate), the holder of the Advance Warrants will be entitled to exercise the Advance Warrants and receive the same amount and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such Triggering Event if such holder had exercised the rights represented by the Warrant Certificate immediately prior to the Triggering Event. Additionally, upon the holder’s request, the continuing or surviving corporation as a result of such Triggering Event will issue to such holder a new warrant of like tenor evidencing the right to purchase the adjusted amount of securities, cash or property and the adjusted warrant price. See Note 10 – Stockholders’ Equity (Deficit) in our audited consolidated financial statements included in this Report. On July 16, 2025, we and Cleveland entered into a First Amendment to the Original Note (the “Note Amendment”). The Note Amendment amended the due date set forth in the Original Note issued by us to Cleveland in connection with the Subordinated LOC. Pursuant to the Note Amendment, the due date under the Original Note was changed from August 15, 2025 to September 30, 2025. 66 Table of Contents On September 15, 2025, concurrent with the closing of the $5.0 million private placement described below, Cleveland purchased 89,323 Preferred Stock Warrants and 420,335 Common Stock Warrants for approximately $1,730,000. This purchase was partially funded by the conversion of the carrying value of the outstanding principal and accrued interest of the Credit Facility on September 14, 2025, of $1,173,000. Cleveland entered into a Debt Satisfaction Agreement with us pursuant to which Cleveland represented full payment and satisfaction of any and all of our obligations due to Cleveland under the Cleveland Note. Cleveland paid the remaining amount it owed pursuant to the Private Placement Purchase Agreement of $557,000 in cash. Private Placement On July 18, 2025, we entered into the Private Placement Purchase Agreement with the Initial Purchaser(s) pursuant to which we agreed to sell an initial aggregate amount of approximately $2.9 million in Preferred Stock Warrants at a purchase price equal to $19.369 per warrant. Each Preferred Stock Warrant entitled the holder to purchase one share of the Series A Preferred Stock for $0.001 per share. Purchasers of Preferred Stock 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. On September 15, 2025, we entered into the Amended and Restated Private Placement Purchase Agreement with certain of the Initial Purchasers and certain additional investors pursuant to which, among other things, the Purchasers agreed to subscribe for and purchase, and we agreed to issue and sell to the Purchasers, an aggregate of 258,144 Preferred Stock Warrants and 1,214,766 Common Stock Warrants at the Purchase Price for gross proceeds of approximately $5.0 million. The Purchase Price was paid in cash or, in lieu of cash, cancellation of certain existing debt of the Company. The closing of the Private Placement contemplated by the Amended and Restated Private Placement Purchase Agreement occurred simultaneously on September 15, 2025 upon the satisfaction of certain customary conditions. As of June 30, 2026, 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. The Preferred Stock Warrants and the Common Stock Warrants were offered to a small select group of accredited investors, as defined in Rule 501 of Regulation D, all of whom had a substantial pre-existing relationship with us. Certain of our affiliates 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, which beneficially owns approximately 7.1% of our common stock as of June 30, 2026. Preferred Stock Warrant and Common Stock Warrant Each Preferred Stock Warrant has an exercise price per share of Series A Preferred Stock equal to $0.001 per share. The Preferred Stock 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 Preferred Stock 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 Stock. Each Common Stock Warrant has an initial exercise price of $1.715, which is equal to the 20-day VWAP per share of common stock immediately preceding the closing of the Private Placement (subject to adjustment therein), is exercisable immediately following issuance and has a term of five (5) years from the initial issuance date. The Common Stock Warrant has a “cashless exercise” provision which provides that the Common Stock Warrant can be exercised without further payment to us. The exercise price and the number of shares of common stock issuable upon exercise of each Common Stock 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. In 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. Private Placement Registration Rights Agreement In connection with the Amended and Restated Private Placement Purchase Agreement, we entered into the Private Placement Registration Rights Agreement with the Purchasers, pursuant to which we agreed to prepare and file a registration statement with the SEC covering the resale of a number of shares of common stock underlying (i) the Series A Preferred Stock underlying the Preferred Stock Warrants and (ii) the Common Stock Warrants issued pursuant to the Amended and Restated Private Placement Purchase Agreement, and to use our 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. We filed the registration statement in October 2025, which became effective in November 2025. 67 Table of Contents ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES Independent Auditor for Fiscal Years 2026 and 2025 For the fiscal years ended June 30, 2026 and 2025, the Company’s independent public accounting firm was Haskell & White LLP. Fees Paid to Principal Independent Registered Public Accounting Firm The aggregate fees billed by our Independent Registered Public Accounting Firm, for the fiscal years ended June 30, 2026 and 2025 are as follows: Fiscal year ended June 30, 2026 2025 Audit fees (1) $ 102,500 $ 303,000 Audit related fees (2) 216,650 - Tax fees (3) - - All other fees (4) - - Total $ 319,150 $ 303,000 (1) Audit fees represent fees for professional services provided in connection with the audit of our annual financial statements and the review of our quarterly financial statements and those services normally provided in connection with statutory or regulatory filings or engagements including comfort letters, consents and other services related to SEC matters. This information is presented as of the latest practicable date for this Report. (2) Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported above under “Audit Fees.” (3) Haskell & White LLP has not provided us with tax compliance, tax advice or tax planning services. (4) All other fees include fees billed by our independent auditors for products or services other than as described in the immediately preceding three categories. No such fees were incurred during the fiscal years ended June 30, 2026 or 2025. Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm Our audit committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm, the scope of services provided by our independent registered public accounting firm and the fees for the services to be performed. These services may include audit services, audit-related services, tax services and other services. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Our independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by our independent registered public accounting firm in accordance with this preapproval, and the fees for the services performed to date. All of the services relating to the fees described in the table above were approved by our audit committee. 68 Table of Contents PART IV ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) (1) Financial Statements The following financial statements of Flux Power Holdings, Inc., Report of Haskell & White, LLP, independent registered public accounting firm, are included in this Form: Page Report of Independent Registered Public Accounting Firm – Haskell & White, LLP, Irvine, CA (PCAOB Firm ID# 200 ) F-1 Consolidated Balance Sheets as of June 30, 2026 and 2025 F-2 Consolidated Statements of Operations for the Years Ended June 30, 2026 and 2025 F-3 Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended June 30, 2026 and 2025 F-4 Consolidated Statements of Cash Flows for the Years Ended June 30, 2026 and 2025 F-5 Notes to Consolidated Financial Statements F-6 (2) Financial Statement Schedules: All schedules have been omitted because the required information is included in the financial statements or notes thereto or because they are not required. 69 Table of Contents (3) Exhibits: The exhibits required by Item 601 of Regulation S-K are listed in subparagraph (b) below. (b) The following exhibits are filed as part of this Form Exhibit No. Description 2.1 Securities Exchange Agreement dated May 18, 2012. Incorporated by reference to Exhibit 2.1 on Form 8-K filed with the SEC on May 24, 2012. 2.2 Amendment No. 1 to the Securities Exchange Agreement dated June 13, 2012. Incorporated by reference to Exhibit 2.2 on Form 8-K filed with the SEC on June 18, 2012. 3.1 Second Amended and Restated Articles of Incorporation. Incorporated by reference to Exhibit 3.1 on Form 8-K filed with the SEC on September 15, 2025. 3.2 Amended and Restated Bylaws of Flux Power Holdings, Inc. Incorporated by reference to Exhibit 3.1 on Form 8-K filed with the SEC on May 31, 2012. 4(vi) Description of Securities. Incorporated by reference to Exhibit 4(vi) on Form 10-K filed on August 20, 2026. 4.1 Form of Warrant. Incorporated by reference to Exhibit 4.1 on Form 8-K filed with the SEC on September 23, 2021. 4.2 Form of Warrant Certificate. Incorporated by reference to Exhibit 4.1 on Form 8-K filed with the SEC on May 13, 2022. 4.3 Warrant to Purchase Stock issued to Silicon Valley Bank, dated June 23, 2022. Incorporated by reference to Exhibit 4.1 on Form 8-K filed with the SEC on June 28, 2022. 4.4 Form of Warrant. Incorporated by reference to Exhibit 4.1 on Form 8-K filed with the SEC on November 3, 2023. 4.5 Form of Prefunded Warrant (PIPE). Incorporated by reference to Exhibit 4.1 on Form 8-K filed with the SEC on September 16, 2025. 4.6 Form of Common Warrant (PIPE). Incorporated by reference to Exhibit 4.2 on Form 8-K filed with the SEC on September 16, 2025. 10.1# Form of Indemnification Agreement. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on April 9, 2019. 10.2 Lease Agreement dated April 25, 2019. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on April 30, 2019. 10.3 First Amendment to Standard Industrial/Commercial Multi-Tenant Lease with Accutek dated March 1, 2020. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on March 5, 2020. 10.4# Flux Power Holdings, Inc. 2010 Stock Plan: Form of Stock Option Agreement. Incorporated by reference to Exhibit 10.6 on Form 8-K filed with the SEC on June 18, 2012. 10.5# 2014 Equity Incentive Plan. Incorporated by reference to Exhibit 10.23 on Form 10-Q filed with the SEC on May 15, 2015. 10.6# Amendment to the Flux Power Holdings Inc. 2014 Equity Incentive Plan. Incorporated by reference to Exhibit 10.20 on Form 10-K filed with the SEC on September 27, 2018. 10.7# Amendment No. 2 to the Flux Power Holdings Inc. 2014 Equity Incentive Plan Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on November 9, 2020. 10.8# Form of Restricted Stock Unit Award Agreement. Incorporated by reference to Exhibit 10.2 on Form 8-K filed with the SEC on November 9, 2020. 10.9# Form of Performance Restricted Stock Unit Award Agreement. Incorporated by reference to Exhibit 10.3 on Form 8-K filed with the SEC on November 9, 2020. 10.10# Annual Cash Bonus Plan. Incorporated by reference to Exhibit 10.4 on Form 8-K filed with the SEC on November 9, 2020. 70 Table of Contents Exhibit No. Description 10.11# 2021 Equity Incentive Plan. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on May 4, 2021. 10.12# Form of Restricted Stock Unit Award Agreement – Non-Executive Director. Incorporated by reference to Exhibit 10.2 on Form 8-K filed with the SEC on May 4, 2021. 10.13# Form of Performance Restricted Stock Unit Award. Incorporated by reference to Exhibit 10.3 on Form 8-K filed with the SEC on November 2, 2021. 10.14 Flux Power Holdings, Inc. 2023 Employee Stock Purchase Plan. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on April 21, 2023. 10.15 Loan and Security Agreement. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on August 3, 2023. 10.16 Intellectual Property Security Agreement. Incorporated by reference to Exhibit 10.2 on Form 8-K filed with the SEC on August 3, 2023. 10.17 Form of Revolving Note. Incorporated by reference to Exhibit 10.3 on Form 8-K filed with the SEC on August 3, 2023. 10.18 Amended and Restated Annual Bonus Plan. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on October 24, 2023. 10.19 Credit Facility Agreement dated November 2, 2023. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on November 3, 2023. 10.20 Form of Subordinated Unsecured Promissory Note (Cleveland). Incorporated by reference to Exhibit 10.2 on Form 8-K filed with the SEC on November 3, 2023. 10.21 Amendment No. 2 to Loan and Security Agreement (GBC). Incorporated by reference to Exhibit 10.1 on Form 8-K filed on February 1, 2024. 10.22# Employment Agreement (Kevin S. Royal). Incorporated by reference to Exhibit 10.3 on Form 8-K filed on February 23, 2024. 10.23 Waiver Agreement dated May 8, 2024. Incorporated by reference to Exhibit 10.5 on Form 10-Q filed on May 13, 2024. 10.24 Amendment No. 3 to Loan and Security Agreement (GBC). Incorporated by reference to Exhibit 10.1 on Form 8-K filed on August 14, 2024. 10.25 Waiver to Loan and Security Agreement dated August 30, 2024. Incorporated by reference to Exhibit 10.30 on Form 10-K filed on January 29, 2025. 10.26 Waiver to Loan and Security Agreement dated January 17, 2025. Incorporated by reference to Exhibit 10.31 on Form 10-K filed on January 29, 2025. 10.27 Amendment No. 4 to Loan and Security Agreement (GBC). Incorporated by reference to Exhibit 10.1 on Form 8-K filed on January 28, 2025. 10.28# Executive Employment Agreement with Krishna Vanka. Incorporated by reference to Exhibit 10.1 on Form 8-K filed on March 10, 2025. 10.29# Flux Power Holdings, Inc. 2025 Equity Incentive Plan. Incorporated by reference to Exhibit 10.1 on Form 8-K filed on May 30, 2025. 10.30 Form of Settlement Term Sheet. Incorporated by reference to Exhibit 99.1 on Form 8-K filed on July 16, 2025. 10.31 Amendment No.5 to Loan and Security Agreement (GBC). Incorporated by reference to Exhibit 10.1 on Form 8-K filed on July 22, 2025. 10.32 First Amendment to Subordinated Unsecured Promissory Note. Incorporated by reference to Exhibit 10.2 on Form 8-K filed on July 22, 2025. 10.33 Amendment No. 6 to Loan and Security Agreement (GBC). Incorporated by reference to Exhibit 10.1 on Form 8-K filed on September 5, 2025. 10.34 Form of Amended and Restated Securities Purchase Agreement. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on September 16, 2025. 10.35 Form of Registration Rights Agreement. Incorporated by reference to Exhibit 10.2 on Form 8-K filed with the SEC on September 16, 2025. 10.36 Form of Escrow Agreement. Incorporated by reference to Exhibit 10.3 on Form 8-K filed with the SEC on September 16, 2025. 10.37 Debt Satisfaction Agreement. Incorporated by reference to Exhibit 10.4 on Form 8-K filed with the SEC on September 16, 2025. 10.38 Common Stock Purchase Agreement, dated May 15, 2026, by and between Flux Power Holdings, Inc. and Roth Principal Investments, LLC. Incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on May 18, 2026. 10.39 Registration Rights Agreement, dated May 15, 2026, by and between Flux Power Holdings, Inc. and Roth Principal Investments, LLC. Incorporated by reference to Exhibit 10.2 on Form 8-K filed with the SEC on May 18, 2026. 14.1 Code of Business Conduct and Ethics. Incorporated by reference to Exhibit 99.4 on Form 8-K filed with the SEC on July 2, 2019. 19.1 Insider Trading Compliance Program Policy. Incorporated by reference to Exhibit 19.1 to Form 10-K filed with the SEC on January 29, 2025. 21.1 Subsidiaries. Incorporated by reference to Exhibit 21.1 on Form 8-K filed with the SEC on June 18, 2012. 23.1* Consent of Haskell & White LLP, Independent Registered Public Accounting Firm. 31.1* Certifications of the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act. 31.2* Certifications of the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act. 32.1** Certifications of the Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act. 32.2** Certifications of the Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act. 97.1 Policy for the Recovery of Erroneously Awarded Compensation. Incorporated by reference to Exhibit 97.1 on Form 10-K filed on January 29, 2025. 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase. 104 Cover Page Interactive Data File, formatted in Inline XBRL (included as Exhibit 101). * Filed herewith. ** Furnished herewith. # Indicates management contract or compensatory plan or arrangement. ITEM 16 – FORM 10-K SUMMARY None . 71 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this Form to be signed on its behalf by the undersigned, thereunto duly authorized. Flux Power Holdings, Inc. Dated: August 20, 2026 By: /s/ Krishna Vanka Krishna Vanka Chief Executive Officer (Principal Executive Officer) By: /s/ Kevin S. Royal Kevin S. Royal Chief Financial Officer ( Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this Form has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Krishna Vanka Director, Chief Executive Officer, August 20, 2026 Krishna Vanka President and Director (Principal Executive Officer) /s/ Kevin S. Royal Chief Financial Officer August 20, 2026 Kevin S. Royal (Principal Financial Officer) /s/ Michael Johnson Director August 20, 2026 Michael Johnson /s/ Mark Leposky Director August 20, 2026 Mark Leposky /s/ Lisa Walters-Hoffert Director August 20, 2026 Lisa Walters-Hoffert /s/ Dale Robinette Director August 20, 2026 Dale Robinette 72 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Flux Power Holdings, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Flux Power Holdings, Inc. (the “Company”) as of June 30, 2026 and 2025, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the two years in the period ended June 30, 2026, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt About the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses from operations, an accumulated deficit, expects to incur losses for the foreseeable future and requires additional working capital to achieve its operating plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provides a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Haskell & White LLP HASKELL & WHITE LLP We have served as the Company’s auditor since 2025. Irvine, California August 20, 2026 F- 1 Table of Contents FLUX POWER HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS June 30, 2026 June 30, 2025 ASSETS Current assets: Cash $ 305,000 $ 1,334,000 Accounts receivable, net of allowance for credit losses of $ 70,000 and $ 68,000 at June 30, 2026 and 2025, respectively 4,862,000 11,374,000 Inventories, net 14,752,000 17,231,000 Other current assets 781,000 1,865,000 Total current assets 20,700,000 31,804,000 Right of use assets, net 2,167,000 1,275,000 Fixed assets, net of accumulated depreciation of $ 2,034,000 and $ 1,700,000 at June 30, 2026 and 2025, respectively 476,000 708,000 Intangible assets, net of accumulated amortization of $ 2,459,000 and $ 1,969,000 at June 30, 2026 and 2025, respectively 763,000 846,000 Other assets 92,000 119,000 Total assets $ 24,198,000 $ 34,752,000 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ 8,473,000 $ 16,295,000 Accrued expenses 4,124,000 7,058,000 Line of credit 6,303,000 13,627,000 Subordinated debt - 1,000,000 Deferred revenue 144,000 459,000 Customer deposits 31,000 38,000 Finance leases payable, current portion 52,000 80,000 Office leases payable, current portion 862,000 815,000 Accrued interest 58,000 246,000 Total current liabilities 20,047,000 39,618,000 Long term liabilities: Finance leases payable, less current portion 19,000 32,000 Office leases payable, less current portion 1,274,000 506,000 Deferred revenue, less current portion 300,000 - Total liabilities 21,640,000 40,156,000 Commitments and contingencies (Note 9 and 13) - Stockholders’ equity (deficit): Preferred stock, $ .001 par value; 3,000,000 and 500,000 shares authorized at June 30, 2026 and 2025, respectively; none issued and outstanding - - Common stock, $ 0.001 par value; 75,000,000 shares authorized; 21,580,992 and 16,835,698 issued and outstanding at June 30, 2026 and 2025, respectively 22,000 17,000 Additional paid-in capital 116,370,000 100,965,000 Accumulated deficit ( 113,834,000 ) ( 106,386,000 ) Total stockholders’ equity (deficit) 2,558,000 ( 5,404,000 ) Total liabilities and stockholders’ equity (deficit) $ 24,198,000 $ 34,752,000 The accompanying notes are an integral part of these consolidated financial statements. F- 2 Table of Contents FLUX POWER HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS 2026 2025 Fiscal year ended June 30, 2026 2025 Revenues $ 42,132,000 $ 66,434,000 Cost of sales 29,415,000 44,694,000 Gross profit 12,717,000 21,740,000 Operating expenses: Selling, general and administrative 16,377,000 22,304,000 Research and development 2,814,000 4,464,000 Total operating expenses 19,191,000 26,768,000 Operating loss ( 6,474,000 ) ( 5,028,000 ) Other expense, net ( 121,000 ) ( 81,000 ) Interest expense, net ( 853,000 ) ( 1,565,000 ) Net loss $ ( 7,448,000 ) $ ( 6,674,000 ) Net loss per share - basic and diluted $ ( 0.38 ) $ ( 0.40 ) Weighted average number of common shares outstanding - basic and diluted 19,826,095 16,717,761 The accompanying notes are an integral part of these consolidated financial statements. F- 3 Table of Contents FLUX POWER HOLDINGS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) Shares Amount Capital Deficit Total Common Stock Additional Paid-in Accumulated Shares Amount Capital Deficit Total Balance at June 30, 2024 16,682,465 $ 17,000 $ 99,889,000 $ ( 99,712,000 ) $ 194,000 Issuance of common stock – RSUs 102,896 - - - - Issuance of common stock – ESPP 50,337 - 97,000 - 97,000 Stock-based compensation - - 979,000 - 979,000 Net loss - - - ( 6,674,000 ) ( 6,674,000 ) Balance at June 30, 2025 16,835,698 $ 17,000 $ 100,965,000 $ ( 106,386,000 ) $ ( 5,404,000 ) Issuance of Preferred Stock Warrants and Common Stock Warrants under Private Placement, net of offering costs of $ 652,000 - - 4,348,000 - 4,348,000 Issuance of common stock – Public Offering, net of offering costs of $ 1,280,000 4,416,000 5,000 9,756,000 - 9,761,000 Issuance of common stock – Public Offering, net of offering costs 4,416,000 5,000 9,756,000 - 9,761,000 Issuance of common stock – CEF, net of offering costs of $ 2,000 19,609 - 17,000 - 17,000 Issuance of common stock – CEF, net of offering costs 19,609 - 17,000 - 17,000 Issuance of common stock – RSUs 200,000 - - - - Issuance of common stock – ESPP 47,560 - 56,000 - 56,000 Issuance of common stock – Exercise of options 62,125 - 255,000 - 255,000 Stock-based compensation - - 973,000 - 973,000 Net loss - - - ( 7,448,000 ) ( 7,448,000 ) Balance at June 30, 2026 21,580,992 $ 22,000 $ 116,370,000 $ ( 113,834,000 ) $ 2,558,000 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Table of Contents FLUX POWER HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS 2026 2025 Fiscal year ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 7,448,000 ) $ ( 6,674,000 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 824,000 849,000 Stock-based compensation (See F-24) 973,000 979,000 Amortization of debt issuance costs 71,000 164,000 Allowance for credit losses 4,000 23,000 Non-cash lease expense 894,000 820,000 Inventory write downs (See F-8) 658,000 534,000 Changes in operating assets and liabilities: Accounts receivable 6,508,000 ( 1,746,000 ) Inventories 1,821,000 ( 788,000 ) Other assets ( 247,000 ) ( 1,085,000 ) Accounts payable ( 7,820,000 ) 5,022,000 Accrued expenses ( 2,934,000 ) 3,132,000 Accrued interest ( 15,000 ) 120,000 Office leases payable 815,000 ( 734,000 ) Deferred revenue ( 15,000 ) ( 26,000 ) Customer deposits ( 7,000 ) 20,000 Net cash (used in) provided by operating activities ( 5,918,000 ) 610,000 Cash flows from investing activities: Purchases of equipment ( 509,000 ) ( 653,000 ) Net cash used in investing activities ( 509,000 ) ( 653,000 ) Cash flows from financing activities: Proceeds from issuance of preferred and common stock warrants under Private Placement 3,826,000 - Offering costs for issuance of preferred and common stock warrants ( 652,000 ) - Proceeds from issuance of common stock under Public Offering 11,041,000 - Offering costs for issuance of common stock under the Public Offering ( 1,280,000 ) - Proceeds from the issuance of common stock under the CEF 19,000 - Offering costs for issuance of common stock under the CEF ( 389,000 ) - Proceeds from subordinated debt borrowing - 1,000,000 Proceeds from stock option exercises and employee stock purchase plan purchases 311,000 97,000 Proceeds from revolving line of credit 54,445,000 64,463,000 Payment of revolving line of credit ( 61,769,000 ) ( 64,670,000 ) Cost to amend line of credit agreement ( 113,000 ) - Payment of finance leases ( 41,000 ) ( 156,000 ) Net cash provided by financing activities 5,398,000 734,000 - Net change in cash ( 1,029,000 ) 691,000 Cash, beginning of period 1,334,000 643,000 Cash, end of period $ 305,000 $ 1,334,000 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Right-of-use asset recognition $ 1,787,000 $ - Preferred and common stock warrants issued under Private Placement in exchange for settlement of subordinated debt, including interest accrued $ 1,173,000 $ - Common stock issued for vested RSUs $ 224,000 $ 161,000 Supplemental Cash Flow Information: Cash paid for income taxes, net of refunds, by jurisdiction is as follows: State (California) $ 800 $ 800 Interest paid $ 1,044,000 $ 1,235,000 The accompanying notes are an integral part of these consolidated financial statements. F- 5 Table of Contents FLUX POWER HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2026 and June 30, 2025 NOTE 1 – NATURE OF BUSINESS Nature of Business Flux Power Holdings, Inc. (“Flux”) was incorporated in 1998 in the State of Nevada, and Flux’s operations are conducted through its wholly owned subsidiary, Flux Power, Inc. (“Flux Power”), a California corporation (collectively, the “Company”). We 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”). We believe our mobile energy storage solutions provide our customers with 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 battery pack performance. We believe that the growing demand for lithium-ion energy storage solutions and more environmentally friendly energy storage solutions across a range of industrial and commercial sectors should continue to drive our growth in the markets we serve. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the Company’s significant accounting policies which have been consistently applied in the preparation of the accompanying consolidated financial statements follows. Principles of Consolidation The consolidated financial statements include Flux Power Holdings, Inc. and its wholly-owned subsidiary Flux Power, Inc. after elimination of all intercompany accounts and transactions. Liquidity and Financial Condition The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists. Historically, the Company’s revenues and operating cash flows have not been sufficient to sustain its operations and the Company has relied on debt and equity financing for additional funds. The Company has incurred an accumulated deficit of $ 113.8 million through June 30, 2026, and for the year ended June 30, 2026, has generated negative cash flows from operations of $ 5.9 million and incurred a net loss of $ 7.4 million. As of June 30, 2026, the Company had a cash balance of $ 0.3 million. In addition, the Company’s operations have been impacted by delays in new orders of its energy storage solutions due to corresponding deferrals of new forklift purchases mainly caused by lower capital spending in the market sector that the Company serves and by interest rate variability. These conditions have affected selected large customer fleets, thereby impacting the Company’s ability to meet projected revenue targets and to generate cash from operations. Management has evaluated the Company’s expected cash requirements, including investments in additional selling and marketing and in research and development, expected capital expenditures and expected working capital requirements. Management believes the Company’s existing cash, forecasted gross margins, additional cash proceeds that management believes are available from the Committed Equity Facility (as defined herein) and additional funding that the management believes is available under the GBC Credit Facility (as defined herein) will not be sufficient to meet the Company’s anticipated capital requirements to fund planned operations for the next twelve months following the filing date of this Form, which raises substantial doubt about its ability to continue as a going concern over the 12 months following the filing date of this Form. F- 6 Table of Contents The Company has implemented reductions in labor and overhead costs and has increased selling prices of energy storage solutions, however, management is evaluating strategies to further improve profitability of operations and to obtain additional funding. These steps include planned further price increases for our energy storage solutions, and the implementation of a number of cost saving initiatives including product cost efficiencies and planned operational cost savings. Based on the Company’s existing backlog and customer orders, management anticipates increased revenues which, together with improvements in gross margin, would move the Company closer to profitability. The planned gross margin improvement tasks include, but are not limited to, a plan to drive bill of material costs down while further increasing price of the Company’s products for new orders. The Company also continues to execute cost reduction, sourcing and pricing recovery initiatives in efforts to increase gross margins and improve cash flow from operations. Unforeseen factors beyond management’s control, including economic uncertainty and the impact of global tariff initiatives could potentially have negative impact on the planned gross margin improvement plan. Management is continuing to evaluate other sources of capital to fund the Company’s operations and growth. However, there can be no assurance that the Company will be able to realize its plans for improved operations or to access necessary additional financing on terms favorable to the Company or at all when needed for sufficient liquidity in order to continue operations over the next twelve months. If such liquidity is not available when required, management will be required to curtail investments in new product development, which may have a material adverse effect on future cash flows and results of operations and the Company’s ability to continue operating as a going concern. The accompanying consolidated financial statements do not include any adjustments that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to liquidate its assets and discharge its liabilities in other than the normal course of business and at amounts that may differ from those reflected in the accompanying consolidated financial statements. Reclassification Adjustments were made to the Company’s previously reported Financial Statements for the period ended June 30, 2025 in accordance with FASB ASC 250 – Accounting Changes and Error Corrections. Such reclassifications consist of certain previously reported amounts in order to conform on a comparable basis with the Company’s current Financial Statement presentation. The reclassifications had no effect on previously reported net income, total assets, stockholders’ equity or cash flows. Management presents current and comparative results of operations with a disaggregation of intangible assets from other fixed assets and a disaggregation of interest expense from other expense. F- 7 Table of Contents Cash and Cash Equivalents As of June 30, 2026 and 2025, cash was approximately $ 0.3 million and $ 1.3 million, respectively. Cash consists of funds held in a non-interest-bearing bank deposit account. The Company considers all liquid short-term investments with maturities of less than three months when acquired to be cash equivalents. The Company had no cash equivalents at June 30, 2026 and 2025. Fair Values of Financial Instruments The carrying amount of the Company’s cash, accounts payable, accounts receivable, and accrued liabilities approximate their estimated fair values due to the short-term maturities of those financial instruments. The carrying amount of the line of credit approximates fair value as interest approximates current market interest rates for similar instruments. Management has concluded that it is not practical to determine the estimated fair value of subordinated debt due to related parties because the transactions cannot be assumed to have been consummated at arm’s length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs. The Company does not have any other assets or liabilities that are measured at fair value on a recurring or non-recurring basis. Accounts Receivable Accounts receivable are evaluated according to the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 326-20 and Accounting Standards Update No. 2016-13 of Current Expected Credit Losses (“CECL”). Under the CECL model, the Company estimates expected credit losses over the lifetime of accounts receivable using forward-looking data. Accounts receivable are carried at their estimated collectible amounts. The Company has not experienced significant issues related to the collection of its accounts receivable. As of June 30, 2026 and 2025, the Company had an allowance for credit losses of $ 70,000 and $ 68,000 , respectively. Inventories Inventories consist primarily of battery management systems and the related subcomponents and are stated at the lower of cost (first-in, first-out) or net realizable value. The Company evaluates inventories to determine if write-downs are necessary due to obsolescence or if the inventory levels are in excess of anticipated demand at market value based on consideration of historical sales and product development plans. The Company recorded an adjustment related to obsolete inventory in the amount of approximately $ 658,000 and $ 534,000 during the years ended June 30, 2026 and 2025, respectively. Inventories at June 30, 2026 and 2025 are net of inventory obsolescence and reserve write-downs of $ 1,607,000 and $ 1,531,000 , respectively. Tariffs The Company does not pay any tariffs directly to the US Government. The increased costs of inventory acquired from suppliers as a result of tariffs are accounted for in the Company’s cost of inventory on the balance sheet and expensed in cost of goods sold. Shipping Inbound shipping costs are added to the cost of inventory on the balance sheet and expensed as a cost of goods sold. Outbound shipping costs are expensed in the period incurred and are recoded in selling, general and administrative expense. F- 8 Table of Contents Fixed Assets Machinery and equipment, office equipment and furniture and equipment are stated at cost, net of accumulated depreciation. Depreciation and amortization are expensed using the straight-line method over the estimated useful lives of the related assets ranging from 3 three to five years . Leasehold Improvements are amortized over the lesser of the useful life of the related asset or the lease term. Intangible Assets Software consists primarily of internally developed software incorporated into manufactured product, is stated at capitalized cost and is amortized over five years . Impairment of Long-lived Assets In accordance with authoritative guidance for the impairment or disposal of long-lived assets, if indicators of impairment exist, the Company assesses the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through the undiscounted future operating cash flows. If impairment is indicated, the Company measures the amount of such impairment by comparing the carrying value of the asset to the present value of the expected future cash flows associated with the use of the asset. Management determined that no impairment indicators were present and, accordingly, no impairment losses were recognized during the fiscal years ended June 30, 2026 and 2025. Leases The Company reports leases on its consolidated financial statements in conformance with ASC 842 - Leases, which are classified as operating leases and finance leases. The Company has two operating leases for its warehouse facilities and three finance leases for a vehicle and manufacturing equipment. Product Warranties The Company evaluates its exposure to product warranty obligations based on historical experience. Our products, primarily lift equipment packs, are warrantied for five years unless modified by a separate agreement. As of June 30, 2026 and 2025, the Company carried warranty liability of approximately $ 2.8 million and $ 3.4 million, respectively, included in accrued expenses on the Company’s consolidated balance sheets. Revenue Recognition The Company recognizes revenue in accordance to the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all contracts. The Company derives its revenue from the sale of products to customers. The Company sells its products primarily through a distribution network of equipment dealers, OEMs and battery distributors located primarily in North America. The Company recognizes revenue for the products when all significant risks and rewards have been transferred to the customer, there exists no continuing managerial involvement associated with ownership of the goods sold is retained, no effective control over the goods sold is retained, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transactions will flow to the Company and the costs incurred or to be incurred with respect to the transaction can be measured reliably. Product revenue is recognized as a distinct single performance obligation which represents the point in time that a customer receives delivery of products. Customers do have a right to return product, but returns have historically been minimal. Research and Development The Company is actively engaged in new product development efforts. Research and development costs relating to possible future products are expensed as incurred. Advertising Costs of advertising and promotion consist primarily of trade show expenses. Advertising is expensed as incurred and was $ 134,000 and $ 117,000 for the years ending June 30, 2026 and 2025, respectively. F- 9 Table of Contents Stock-based Compensation Pursuant to the provisions of the Financial Accounting Standards Board (“FASB”) ASC Topic No. 718-10, Compensation-Stock Compensation , which establishes accounting for equity instruments exchanged for employee service, we utilize the Black-Scholes option pricing model to estimate the fair value of employee stock option awards at the date of grant, which requires the input of highly subjective assumptions, including expected volatility and expected life. Changes in these inputs and assumptions can materially affect the measure of estimated fair value of our share-based compensation. These assumptions are subjective and generally require significant analysis and judgment to develop. When estimating fair value, some of the assumptions will be based on, or determined from, external data, and other assumptions may be derived from our historical experience with stock-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment based on relevant facts and circumstances. Stock-based compensation expense for the fiscal years ended June 30, 2026 and 2025 represents the estimated fair value of stock options and RSUs at the time of the grant, and ESPP shares at the beginning of each offering period, amortized under the straight-line method over the expected vesting period and reduced for estimated forfeitures of options and RSUs. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from original estimates. Common stock or equity instruments such as warrants issued for services to non-employees are valued at their estimated fair value at the measurement date (the date when a firm commitment for performance of the services is reached, typically the date of issuance, or when performance is complete). If the total value exceeds the par value of the stock issued, the value in excess of the par value is added to the additional paid-in-capital. Income Taxes Pursuant to FASB ASC Topic No. 740, Income Taxes, deferred tax assets or liabilities are recorded to reflect the future tax consequences of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each year-end. These amounts are adjusted, as appropriate, to reflect enacted changes in tax rates expected to be in effect when the temporary differences reverse. The Company has analyzed filing positions in all of the federal and state jurisdictions where the Company is required to file income tax returns, as well as all open tax years in these jurisdictions. As a result, no unrecognized tax benefits have been identified as of June 30, 2026 and 2025, and, accordingly, no additional tax liabilities were recorded. The Company records deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities and on operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Net Loss Per Common Share The Company calculates basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted loss per common share includes the impact from all dilutive potential common shares relating to outstanding convertible securities. F- 10 Table of Contents For the fiscal years ended June 30, 2026 and 2025, basic and diluted weighted-average common shares outstanding were 19,826,095 and 16,717,761 , respectively. The Company incurred a net loss for the fiscal years ended June 30, 2026 and 2025; therefore, basic and diluted loss per share for each fiscal year was the same because potential common share equivalents would have been anti-dilutive. The potentially dilutive common shares outstanding at June 30, 2026 and 2025 excluded from diluted weighted-average common shares outstanding represent shares underlying outstanding stock options, RSUs and warrants, as follows: SCHEDULE OF DILUTIVE WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2026 2025 June 30, 2026 2025 Stock options 928,882 796,660 RSUs (1) 304,878 200,000 Common Stock Warrants convertible to common stock 2,496,198 1,413,110 Preferred Stock Warrants convertible to common stock 2,429,523 - Total potentially dilutive securities 6,159,481 2,409,770 (1) RSUs presented include performance stock units with goals that management determined are not probable to be achieved. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires retrospective disclosure of significant segment expenses and other segment items on an annual and interim basis. Additionally, it requires disclosure of the title and position of the Company’s Chief Operating Decision Maker (“CODM”). This ASU is effective annually beginning with the Company’s fiscal year ended June 30, 2025 and for interim periods thereafter. The Company adopted this standard for the year ended June 30, 2025 and the adoption did not have a material impact on the Company’s consolidated financial statements. See Note 14 – Segment Information. Management has considered all recent accounting pronouncements not yet adopted in the Company’s consolidated financial statements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements . The ASU is effective for public business entities for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is allowed. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , to incorporate several SEC disclosure requirements into a variety of Topics in the FASB Codification. When effective, ASU 2023-06 will not significantly affect the disclosure requirements for entities subject to SEC’s existing disclosure requirements, given those entities’ requirement to comply with Regulation S-X. The effective date of each amendment of the ASU will be the date of the SEC’s removal of the related disclosure from its regulations, to prevent duplication. Early adoption is prohibited. In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses , which requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations, as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for our fiscal year ending June 30, 2028 and interim periods thereafter. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is evaluating the disclosure requirements related to the new standard. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures , which requires more detailed income tax disclosures. The standard is effective for this fiscal year ending June 30, 2026 and the financial statements contained herein. F- 11 Table of Contents NOTE 3 – INVENTORIES Inventories consist of the following: SCHEDULE OF INVENTORIES 2026 2025 June 30, 2026 2025 Raw materials $ 13,222,000 $ 15,022,000 Work in process 438,000 513,000 Finished goods 2,699,000 3,247,000 Less: reserve for excess and obsolete inventory ( 1,607,000 ) ( 1,551,000 ) Total inventory $ 14,752,000 $ 17,231,000 Inventories consist primarily of the Company’s energy storage systems and the related subcomponents, and are stated at the lower of cost or net realizable value. NOTE 4 – OTHER CURRENT ASSETS Other current assets consist of the following: SCHEDULE OF OTHER CURRENT ASSETS 2026 2025 June 30, 2026 2025 Lawsuit insurance receivable $ - $ 1,486,000 Prepaid computer support service 105,000 111,000 Prepaid insurance 109,000 104,000 Prepaid advertising, promotion and trade show 4,000 5,000 Prepaid expenses 460,000 17,000 Prepaid professional and consulting 61,000 15,000 Other 42,000 127,000 Total other current assets $ 781,000 $ 1,865,000 NOTE 5 – FIXED AND INTANGIBLE ASSETS, NET Fixed assets, net, consist of the following: SCHEDULE OF FIXED ASSETS, NET 2026 2025 June 30, 2026 2025 Machinery and equipment $ 1,611,000 $ 1,534,000 Office equipment 457,000 447,000 Furniture and equipment 274,000 274,000 Leasehold improvements 168,000 149,000 Construction in process - 4,000 Property, plant and equipment 2,510,000 2,408,000 Less: accumulated depreciation ( 2,034,000 ) ( 1,700,000 ) Total fixed assets, net $ 476,000 $ 708,000 Depreciation expense on property, plant and equipment was approximately $ 334,000 and $ 359,000 for the fiscal years ended June 30, 2026 and 2025, respectively, and is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. Depreciation expense is computed on a straight-line basis with useful lives between three 3 and five years . Leasehold improvements are amortized over the expected term of the lease. F- 12 Table of Contents Intangible Assets, net, consist of the following: SCHEDULE OF INTANGIBLE ASSETS, NET 2026 2025 June 30, 2026 2025 Software $ 3,222,000 $ 2,815,000 Less: accumulated amortization ( 2,459,000 ) ( 1,969,000 ) Total intangible assets, net $ 763,000 $ 846,000 Software consisting primarily of internally developed software for resale is amortized over three years. Software amortization expense is approximately $ 490,000 and $ 490,000 for the fiscal years ended June 30, 2026 and 2025, respectively. NOTE 6 – ACCRUED EXPENSES Accrued expenses consist of the following: SCHEDULE OF ACCRUED EXPENSES 2026 2025 June 30, 2026 2025 Warranty liability $ 2,811,000 $ 3,377,000 Lawsuit settlements liability 573,000 2,175,000 Payroll and bonus accrual 273,000 1,024,000 Paid time off accrual 467,000 482,000 Total accrued expenses $ 4,124,000 $ 7,058,000 NOTE 7 – LINE OF CREDIT Gibraltar Business Capital Credit Facility On July 28, 2023, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Gibraltar Business Capital (“GBC”) (the “GBC Credit Facility”). The Loan and Security Agreement provides the Company with a senior secured revolving loan facility for up to $ 15.0 million, which was increased by amendment, see below (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 Loan and Security Agreement). The GBC Credit Facility is evidenced by a revolving note, which was to mature on July 28, 2025 (the “Maturity Date”), and was extended prior to maturity by amendment, see below (the “Revolving Note”). Concurrently, the Company entered into an Intellectual Property Security Agreement. In addition, subject to conditions and terms set forth in the Loan and Security Agreement, the Company 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: (a) the requested increase is in a minimum amount of $ 1,000,000 , and (b) the total increases do not exceed $ 5,000,000 and no more than five (5) increases are made. On January 30, 2024, the Company entered into Amendment No. 2 to the Loan and Security Agreement with GBC, pursuant to which, among other things, the Revolving Loan Commitment was increased to $ 16.0 million. Outstanding principal under the GBC Credit Facility accrues interest at Secured Overnight Financing Rate (“SOFR”, as defined in the Loan and Security 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 and Security Agreement bear interest at a rate per annum equal to three percent ( 3.0 %) above the rate that is otherwise applicable to such amounts. The Company paid GBC a non-refundable closing fee for the GBC Credit Facility of $ 112,500 upon the execution of the Loan and Security Agreement. In addition, the Company is 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. F- 13 Table of Contents On January 22, 2025, the Company entered into Amendment No. 4 to the Loan and Security Agreement (the “Fourth Amendment”) with GBC which amended certain terms of the Loan and Security Agreement, 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 paid on March 1, 2025, and (ii) $ 25,000 paid on April 1, 2025. On July 16, 2025, the Company entered into Amendment No. 5 to the Loan and Security Agreement (the “Fifth Amendment”) with GBC which amended certain terms relating to the maturity date set forth under the Loan and Security Agreement, as amended. Pursuant to the Fifth Amendment, GBC and the Company agreed to amend the of the maturity date to August 31, 2025 , unless otherwise extended pursuant to the terms of the Loan and Security Agreement, provided however, upon the occurrence of either (i) an extension of the due date of the 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 Company, the maturity date will automatically extend to July 31, 2027. In consideration for the Fifth Amendment, the Company agreed to pay GBC a non-refundable amendment fee of $ 112,500 . On September 4, 2025, the Company entered into Amendment No. 6 to the Loan and Security 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 towards satisfaction of the subscription by Cleveland in the Private Placement. Upon the conversion of all the outstanding obligations under the Cleveland Note into equity of the Company, the Maturity Date of the Loan and Security Agreement was automatically extended to July 31, 2027 according to the Fifth Amendment. The 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 both the July 31, 2023 Loan and Security Agreement and the Intellectual Property Security Agreement. During the year ended June 30, 2026, the Company’s multiple drawdowns and repayments under the GBC Credit Facility resulted in a net $ 7.3 million repayment. As of June 30, 2026, the outstanding balance under the GBC Credit Facility was approximately $ 6.3 million. The Company’s borrowing base changes as qualified collateral fluctuates and, therefore, available funding under the GBC Credit Facility could be substantially lower. On March 31, 2026, the Company notified GBC that the Company failed to comply with the minimum EBITDA financial covenant for the trailing three-month period ended February 28, 2026 under the GBC Credit Facility, which resulted in an “event of default” under the GBC Credit Facility. The Company is working with GBC to negotiate an amendment to the GBC Credit Facility or otherwise obtain a waiver from GBC, however, there can be no assurance that it will be able to do so or that the Company will be able to obtain a waiver from GBC on terms favorable to the Company or at all. GBC has allowed the Company to continue to use its line of credit under the GBC Credit Facility while negotiations continue, however, GBC can choose to limit or discontinue availability at any time. In addition, due to the Company’s event of default under the GBC Credit Facility, GBC may, at its option, declare its commitments to the Company terminated and all the Company’s obligations under the GBC Credit Facility 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, which include, among other things, its rights as a secured party under the GBC Credit Facility. NOTE 8 – SUBORDINATED DEBT Related Party Credit Facility - Cleveland Capital, L.P. On November 2, 2023, the Company entered into a Credit Facility Agreement (the “Cleveland Credit Facility”) with Cleveland Capital, L.P. (“Cleveland”). The Cleveland Credit Facility provides the Company with a line of credit of up to $ 2,000,000 for working capital purposes and the Company issued a Subordinated Unsecured Promissory Note for $ 2,000,000 (the “Commitment Amount”) in favor of Cleveland (the “Cleveland Note”). F- 14 Table of Contents Pursuant to the terms of the Cleveland Credit Facility, Cleveland agreed to make loans (each such loan, an “Advance”) up to such Lender’s Commitment Amount to the Company from time to time, until August 15, 2025 (the “Due Date”). The Cleveland Note accrues interest at Secured Overnight Financing Rate plus nine percent ( 9 %) per annum on each Advance from and after the date of disbursement of such Advance. All indebtedness, obligations and liabilities of the Company to Cleveland are subject to the rights of GBC, pursuant to a Subordination Agreement dated on or about November 2, 2023, by and between Cleveland and GBC (the “Subordination Agreement”). Subject to the Subordination Agreement, the Company may, from time to time, prior to the Due Date, draw down, repay, and re-borrow on the Cleveland Note, by giving notice to Cleveland of the amount to be requested to be drawn down. Subject to the Subordinated Unsecured Promissory Note, the Cleveland Note is payable upon the earlier of (i) the Due Date or (ii) on occurrence of an event of Default (as defined in the Cleveland Note). As consideration of Cleveland’s commitment to provide the Advances to the Company, the Company issued 41,196 Common Stock Warrants to Cleveland (the “Cleveland Warrants”) which rights are represented by a warrant certificate (“Warrant Certificate”) entitling Cleveland to purchase 41,196 shares of common stock for an exercise price of $ 3.24 per share. Subject to certain ownership limitations, the Cleveland Warrants are exercisable immediately from the date of issuance and expire on the 5 five-year anniversary of the date of issuance of November 2, 2023. The exercise price of the Cleveland Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the common stock. In the event of a Triggering Event (as defined in the Warrant Certificate), the holder will be entitled to exercise and receive the same amount and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such Triggering Event if such holder had exercised the rights represented by the Warrant Certificate immediately prior to the Triggering Event. Additionally, upon the holder’s request, the continuing or surviving corporation as a result of such Triggering Event will issue to such holder a new warrant of like tenor evidencing the right to purchase the adjusted amount of securities, cash or property and the adjusted warrant price. (See Note 10 – Stockholders’ Equity (Deficit)). On September 15, 2025, concurrent with the closing of the $ 5.0 million private placement described in Note 10 – Stockholders Equity (Deficit), Cleveland purchased 89,323 Preferred Stock Warrants and 420,335 Common Stock Warrants for approximately $ 1,730,000 . This purchase was partially funded by the conversion of the carrying value of the outstanding principal and accrued interest of the Cleveland Credit Facility on September 14, 2025, of $ 1,173,000 . Cleveland entered into a Debt Satisfaction Agreement with the Company pursuant to which Cleveland represented full payment and satisfaction of any and all obligations of the Company due to Cleveland under the Subordinated Unsecured Promissory Note dated November 2, 2023, as amended. Cleveland paid the remaining amount due under the placement of $ 557,000 in cash. The outstanding balance of the Cleveland Credit Facility subordinated debt was zero and $ 1,000,000 as of June 30, 2026 and 2025, respectively. NOTE 9 – COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in any legal proceedings that may arise from time to time may harm the Company’s business. To the best of its knowledge, except for the legal proceedings disclosed below, there are no other material legal proceedings pending against the Company. F- 15 Table of Contents Securities Class Action On July 11, 2025, we entered into a settlement term sheet to fully resolve the previously disclosed class action litigation captioned Kassam v. Flux Power Holdings, Inc. et al. (Case No. 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, heard by the Court on October 23, 2025. In settling the class action, the Company is not admitting any liability and the settlement agreement constitutes no admission of liability or any admission regarding the accuracy of any allegation made by the plaintiffs. The 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. Our liability insurers directly funded the full $ 1.75 million settlement amount, which was released from the escrowed settlement fund pursuant to the Order and Final Judgement. Stockholder Derivative Action On January 7, 2025, plaintiff Ronald Pearl filed a stockholder derivative complaint in the United States District Court, District of Nevada, captioned Pearl v. Dutt, et al . (Case No. 2:25-cv-00042), against current and former officers and directors of the Company, naming the Company as a nominal defendant. The complaint generally arises out of the same allegations contained in the above securities class action and alleges claims for breach of fiduciary duties and related claims. Following a mediation, on July 11, 2025 the parties reached an agreement to resolve the derivative complaint in exchange for the Company implementing and maintaining certain corporate governance reforms and enhancements. In connection with the settlement, defendants agreed to a payment of attorneys’ fees and reimbursement of expenses for plaintiff’s counsel in the total amount of $ 425,000 . On April 7, 2026, the Court issued its Order and Final Judgement and thereby dismissed all claims with prejudice. In settling the derivative complaint, the defendants are not admitting any liability, and the settlement does not constitute an admission regarding the accuracy of any allegation made by the plaintiffs. As of June 30, 2026, the Company’s liability insurers directly funded $ 187,000 of the agreed upon attorneys’ fees. Employment-Related Litigation On April 30, 2024, a former employee (the “Employee”) filed a class action complaint against the Company and Insperity, its third-party payroll service provider, in San Diego County Superior Court for various claims which he has purported to assert on behalf of himself and all other individuals who worked for the Company or Insperity, amended to include a representative action complaint for Violation of Private Attorneys’ General Act (“PAGA”), seeking an unspecified amount of penalties and attorneys’ fees based on allegations that the Company violated certain California employment laws. A Motion to Compel Arbitration was granted and arbitration was scheduled for March 26, 2026 wherein the parties agreed to a settlement of $ 164,000 . Final 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. Final 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. F- 16 Table of Contents Lease Obligations Operating Leases On April 25, 2019 the Company signed a Standard Industrial/Commercial Multi-Tenant Lease with Accutek to rent approximately 45,600 square feet of industrial space at 2685 S. Melrose Drive, Vista, California. Under the terms of the original lease, the monthly rental rate escalates at 3% each year. The Company has since signed additional amendments and extensions, most recently an extension through November 2028. The Company rents 63,200 square feet of industrial space for a monthly rent of approximately $ 70,000 . On December 16, 2022, the Company signed a Lease Agreement with MM Parker Court Associates, LLC to rent approximately 4,900 square feet of office space at Building 1959 Parker Court, Suite E, Atlanta, Georgia, set to expire in April 2028, with the monthly rate increasing 5 % each year. Currently, the Company pays a monthly rent of approximately $ 6,000 . Total rent expense was approximately $ 975,000 and $ 929,000 for the fiscal years ended June 30, 2026 and 2025, respectively. Finance Leases The Company has three finance leases outstanding as of June 30, 2026 as follows: SCHEDULE OF FINANCE LEASES Lease / Renewal Date Property Leased Lease Term (months) Monthly Payment (1) 9/2/2022 Vehicle 60 $ 1,200 10/17/2025 Manufacturing equipment 11 $ 5,500 10/3/2025 Manufacturing equipment 16 $ 6,700 (1) Excludes sales tax and other fees. For operating and finance leases, lease costs are amortized on a straight-line basis over their respective lease terms. Lease amortization related to leased assets was approximately $ 155,000 and $ 153,000 for the years ended June 30, 2026 and 2025, respectively. Interest expense was approximately $ 9,000 and $ 17,000 for the years ended June 30, 2026 and 2025, respectively. On May 20, 2026, the Company notified its equipment lessor of the exercise of its option to purchase two items of Manufacturing Equipment currently under leases renewable in fiscal year 2027. The first, exercisable in August 2026, is for a payment of $ 20,000 for transfer of ownership. The second, exercisable in January 2027, is for a payment of $ 17,000 for transfer of ownership. F- 17 Table of Contents Lease Commitments Future minimum lease payments as of June 30, 2026 are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Operating Leases Finance Leases Fiscal years ending June 30, 2027 $ 956,000 $ 54,000 2028 980,000 21,000 2029 387,000 - Total future minimum lease payments 2,323,000 75,000 Less: discount ( 187,000 ) ( 4,000 ) Total lease liability 2,136,000 71,000 Less: leases payable, current portion ( 862,000 ) ( 52,000 ) Leases payable, noncurrent portion $ 1,274,000 $ 19,000 The weighted average remaining lease term for operating leases was 2.3 years and 1.6 years as of June 30, 2026 and 2025, respectively. The weighted average discount rate for operating leases was 7.2 % and 8.5 % as of June 30, 2026 and 2025, respectively. The weighted average remaining lease term for finance leases was 0.5 years and 0.8 years as of June 30, 2026 and 2025, respectively. The weighted average discount rate for finance leases was 8.2 % and 3.4 % as of June 30, 2026 and 2025, respectively. Product Warranty Obligations The Company provides product warranties for goods sold. Product warranties are negotiated separately with each customer. Generally, the Company’s product warranties have a five year term for electronics components and an eight year term for battery cells. Other product components have separate warranty periods, and all warranties are voided when the product is used outside certain defined limits. The Company evaluates its exposure to product warranty obligations based on historical experience. As of June 30, 2026 and 2025, a warranty liability of approximately $ 2,811,000 and $ 3,377,000 , respectively, is included in accrued expenses on the consolidated balance sheets. Additionally, the Company granted a certain customer a five-year right of return for goods purchased as a percentage of the original purchase price upon return of the goods to the Company’s warehouse. Management believes that, during the entire five-year period, the anticipated fair value of the purchased goods will exceed the amount committed as a refund, it therefore being disadvantageous for the customer to so exercise its right. As such, management neither presently expects, nor in the future will expect, the customer to demand such a right of return and refund, and no liability was accrued on our consolidated balance sheets therefor. F- 18 Table of Contents NOTE 10 – STOCKHOLDERS’ EQUITY (DEFICIT) Private Placement On July 18, 2025, the Company entered into a securities purchase agreement, which was amended and restated on September 15, 2025 (the “Amended and Restated Purchase Agreement”) with certain accredited 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 Preferred Stock Warrants and 1,214,766 Common Stock Warrants at the aggregate purchase price of approximately $ 5.0 million (the “Private Placement”). The purchase price was paid in cash or, in the case of purchaser Cleveland, cash and the cancellation of certain existing debt of the Company held by Cleveland. See Note 8 – Subordinated Debt for additional information. The 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, including certain executives and affiliates of the Company. The closing of the Private Placement contemplated by the Amended and Restated Purchase Agreement occurred simultaneously on September 15, 2025 upon the satisfaction of certain customary conditions. Proceeds received, net of offering costs of approximately $ 652,000 , were approximately $ 4,348,000 consisting of $ 3,175,000 cash and the aforementioned cancellation of $ 1,173,000 of outstanding debt and accrued interest. The Private Placement Common Stock Warrants and Preferred Stock Warrants are classified as equity. Accordingly, proceeds, net of offering costs, are included in additional paid-in capital on the Company’s consolidated balance sheets. Public Offering On November 3, 2025, the Company completed an underwritten public offering (the “Public Offering”) of 3,840,000 shares of its common stock at a public offering price of $ 2.50 per share, and the Company granted the underwriter a 30-day option to purchase up to an additional 576,000 shares of common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments and which was subsequently exercised in full. The Company received net proceeds of approximately $ 9,760,000 , after offering costs of approximately $ 1,280,000 . Committed Equity Facility On May 15, 2026, the Company entered into a common stock purchase agreement (the “CEF Purchase Agreement”) and related registration rights agreement (the “CEF Registration Rights Agreement”) with Roth Principal Investments, LLC (“Roth Principal Investments”), providing a discretionary committed equity facility of up to $ 40.0 million (the “Committed Equity Facility”). Beginning June 4, 2026, the Company may, at its option over 36 months, sell shares of common stock to Roth Principal Investments at a price based on the volume weighted average price of the Company’s common stock as reported on the Nasdaq during a specific valuation period, less a fixed 3.0% discount in the case of a “Market Open Purchase” or an “Intraday Purchase” or less a fixed 5.25% discount in the case of a “Pre-Market Purchase” or a “Post-Market Purchase”, subject to ownership and other limitations set forth in the CEF Purchase Agreement, including the requirement that the closing sale price of the Company’s common stock on the trading day immediately prior to the applicable purchase date is not less than a threshold price of $0.50. Pursuant to the CEF Registration Rights Agreement, the Company filed a registration statement on Form S-1 to register the resale by Roth Principal Investments of up to 38,461,538 shares of common stock that the Company may direct Roth Principal Investments to purchase pursuant to the CEF Purchase Agreement. As consideration for Roth Principal Investments’ commitment, the Company paid a $ 25,000 structuring fee and agreed to pay a cash commitment fee of up to $ 800,000 , payable over time by Roth Principal Investments withholding cash amounts equal to 10 % of the total aggregate purchase price payable by Roth Principal Investments to the Company in connection with each purchase of shares of the Company’s common stock effected under the CEF Purchase Agreement. The Company also agreed to reimburse Roth Principal Investments’ legal fees in the amounts specified in the CEF Purchase Agreement. As of June 30, 2026, the Company issued and sold 19,609 shares of common stock at an average price of $ 0.98 per share under the Committed Equity Facility. The Company received net proceeds of approximately $ 17,000 , after offering costs of approximately $ 2,000 . Additionally, the Company expended an additional $ 389,000 in costs associated with the CEF, recorded as a current asset on the balance sheet. F- 19 Table of Contents Preferred Stock Authorized Shares of Preferred Stock On August 29, 2025, the Company’s stockholders approved the amendment and restatement of the Articles of Incorporation 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, and (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, with rights, preferences, privileges and restrictions all as set forth in the Second Amended and Restated Certificate of Incorporation. The Second Amended and Restated Certificate of Incorporation was filed with the State of Nevada on September 10, 2025. As of June 30, 2026 and 2025, there were no shares of preferred stock outstanding. Preferred Stock Warrants In September 2025 and in conjunction with the Private Placement, the Company issued Preferred Stock Warrants to purchase up to 258,144 shares of the Company’s Series A Preferred Stock at an exercise price of $ 0.001 per share which are then convertible to 2,429,523 shares of common stock, subject to certain adjustments. The Preferred Stock Warrants do not expire. Activity during the year ended June 30, 2026 is reflected below: SCHEDULE OF STOCK WARRANT ACTIVITY Number of Preferred Warrants Weighted Average Exercise Price per Warrant Convertible to Common Shares Weighted Average Remaining Contract Term (years) Outstanding and exercisable at June 30, 2025 - Issued 258,144 $ 0.001 2,429,523 N/A Exercised - Expired and cancelled - Outstanding and exercisable at June 30, 2026 258,144 $ 0.001 2,429,523 N/A Common Stock Authorized Shares of Common Stock On May 28, 2025, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment of its Articles of Incorporation to increase the number of shares of common stock to 75,000,000 from the 30,000,000 shares previously authorized. As of June 30, 2026 and 2025, there are 21,580,992 and 16,835,698 shares, respectively, of the Company’s common stock outstanding, par value $ 0.001 . Common Stock Warrants In connection with the Company’s Registered Direct Offering (“RDO”) in September 2021, the Company issued 5 five-year warrants to the RDO investors to purchase up to 1,071,430 shares of the Company’s common stock at an exercise price of $ 7.00 per share with an estimated fair value of approximately $ 3,874,000 . The warrants were exercisable immediately and are limited to beneficial ownership of 4.99 % at any point in time in accordance with the warrant agreement. In May 2022 and in conjunction with entry into a credit facility with Cleveland, HPO and other lenders, the Company issued 5 five-year warrants to the lenders to purchase up to 128,000 shares of the Company’s common stock at an exercise price of $ 2.53 per share with a fair value of approximately $ 173,000 . F- 20 Table of Contents In June 2022 and in conjunction with the entry into the Second Amendment to the Loan and Security Agreement with SVB, the Company issued 12 twelve-year warrants to SVB and its designee, SVB Financial Group, to purchase up to 40,806 shares of the Company’s common stock at an exercise price of $ 2.23 per share with a fair value of approximately $ 80,000 . In November 2023 and in conjunction with the entry into the 2023 Subordinated LOC, the Company issued five-year warrants to Cleveland Capital, L.P. to purchase up to 41,196 shares of the Company’s common stock at an exercise price of $ 3.24 per share with a fair value of approximately $ 92,000 . In September 2025 and in conjunction with the Private Placement, the Company issued Common Stock Warrants to purchase up to 1,214,766 shares of the Company’s common stock at an exercise price of $ 1.715 per share and exercisable for 5 five years from date of issuance with a fair value of $ 2,144,000 . All of the above issued common stock warrants are outstanding and exercisable as of June 30, 2026. Activity in the Company’s Common Stock Warrants during the year ended June 30, 2026 and 2025 are reflected below: SCHEDULE OF STOCK WARRANT ACTIVITY Number of Common Stock Warrants Weighted Average Exercise Price Per Warrant Weighted Average Remaining Contract Term (years) Outstanding and exercisable at June 30, 2024 1,413,110 $ 6.14 1.73 Issued - Exercised - Expired and cancelled - 2.48 Outstanding and exercisable at June 30, 2025 1,413,110 $ 6.14 1.48 Issued 1,214,766 $ 1.72 4.21 Exercised - Expired and cancelled ( 131,678 ) $ 4.80 Outstanding and exercisable at June 30, 2026 2,496,198 $ 4.06 2.37 The Company uses the Black-Scholes valuation model to calculate the fair value of common stock. The fair value of warrants was measured at the issuance date using the assumptions in the table below: SCHEDULE OF FAIR VALUE ASSUMPTIONS OF WARRANTS Fiscal year ended June 30, 2026 2025 (1) Expected volatility 88.0 % - Risk free interest rate 3.7 % - Dividend yield 0.0 % - Expected term (years) 5.00 - (1) No common stock warrants were issued during the twelve months ended June 30, 2025. Equity Award Plans On February 17, 2015, the Company’s stockholders approved the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan offers certain employees, directors, and consultants the opportunity to acquire the Company’s common stock subject to vesting requirements and serves to encourage such persons to remain employed by the Company and to attract new employees. The 2014 Plan expired on November 26, 2024, at which time no future stock or stock option awards could be granted. F- 21 Table of Contents On April 29, 2021, the Company’s stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan authorizes the issuance of awards for up to 2,000,000 shares of common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units, restricted stock awards and unrestricted stock awards to officers, directors and employees of, and consultants and advisors to, the Company or its affiliates. As of June 30, 2026, 180,130 shares of the Company’s common stock were available for future grants under the 2021 Plan. On May 28, 2025, the Company’s stockholders approved the 2025 Equity Incentive Plan (the “2025 Plan”). The 2025 Plan authorizes the issuance of awards for up to 1,000,000 shares of common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units, restricted stock awards and unrestricted stock awards to officers, directors and employees of, and consultants and advisors to, the Company or its affiliates. As of June 30, 2026, 1,000,000 shares of the Company’s common stock were available for future grants under the 2025 Plan. The Company awards stock options, restricted stock units and performance stock units. Stock Options Activity in stock options during the year ended June 30, 2026 and 2025 and related balances outstanding are reflected below: SCHEDULE OF STOCK OPTIONS ACTIVITY Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (years) Aggregate intrinsic Value Weighted Average Grant Date Fair Value Outstanding at June 30, 2024 1,605,060 $ 4.85 Granted - Exercised - Forfeited and cancelled ( 808,400 ) $ 5.60 Outstanding at June 30, 2025 796,660 $ 4.10 $ 3.08 Granted 536,239 $ 1.88 $ 1.23 Exercised ( 62,125 ) $ 4.10 $ 3.40 Forfeited and cancelled ( 341,892 ) $ 3.43 $ 115,095 $ 2.53 Outstanding at June 30, 2026 928,882 $ 3.06 7.75 $ 2.20 Exercisable at June 30, 2026 368,997 $ 4.18 6.53 $ 3.14 Compensation recorded for stock options was $ 558,000 and $ 605,000 for the fiscal year ended June 30, 2026 and 2025, respectively. The Company uses the Black-Scholes valuation model to calculate the fair value of stock options. Weighted average annualized percentages and expected term inputs used in Black-Scholes valuations during the periods are listed below. No stock options were issued during the twelve months ended June 30, 2025. SCHEDULE OF FAIR VALUE ASSUMPTIONS OF STOCK OPTIONS Fiscal year ended June 30, 2026 2025 (1) Expected volatility 95.5 % - Risk free interest rate 3.9 % - Dividend yield 0.0 % - Expected term (years) 5.87 - (1) No stock options were issued during the twelve months ended June 30, 2025. F- 22 Table of Contents Restricted Stock Units and Performance Stock Units The Company’s Equity Award Plans allows for grants of Restricted Stock Units (“RSUs”), which include performance-based stock units (“PSUs”). The awards are subject to the terms and conditions provided in (i) the Restricted Stock Unit Award Agreement for time-based awards, and (ii) the Performance Restricted Stock Unit Award Agreement for PSUs. Subject to vesting requirements set forth in the applicable RSU or PSU award agreement, one share of common stock is issuable for one vested RSU or PSU, as applicable. The fair value of time-based RSUs and PSUs without a market condition is the closing stock price of the Company’s common stock on the date of grant. The fair value of PSUs with market conditions is determined using the Monte Carlo valuation method. Compensation recorded for RSUs and PSUs was $ 385,000 and $ 322,000 for the fiscal year ended June 30, 2026 and 2025, respectively. Management determined as of June 30, 2026 that achieving the performance conditions required for vesting of performance-based PSUs is not probable. On May 28, 2025, a total of 200,000 time-based RSUs were granted under the 2021 Plan to the Company’s Board of Directors as director compensation for the fiscal year ended June 30, 2026. The RSUs vested on May 28, 2026 at a grant date fair value of $ 320,000 . On August 1, 2025, a total of 121,951 time-based RSUs were granted by the Company’s Board of Directors under the 2021 Plan to the Company’s Chief Executive Officer (“CEO”). Also on August 1, 2025, a total of 182,927 PSUs were granted by the Company’s Board of Directors under the 2021 Plan to the Company’s CEO, of which 122,561 PSUs contained only performance conditions and 60,366 PSUs contained a stock appreciation condition. The grants had a grant date fair value of $ 494,000 . Activity in RSUs and PSUs during the year ended June 30, 2026 and 2025 and related balances outstanding are reflected below: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contract Term (years) Outstanding at June 30, 2024 114,666 $ 5.56 Granted 200,000 $ 1.60 Vested and settled ( 102,896 ) $ 5.28 Forfeited and cancelled ( 11,770 ) $ 8.00 Outstanding at June 30, 2025 200,000 $ 1.60 1.60 Granted 304,878 $ 1.62 1.60 Vested and settled ( 200,000 ) $ 1.60 Forfeited and cancelled - Outstanding at June 30, 2026 304,878 $ 1.62 1.60 Employee Stock Purchase Plan On March 6, 2023, the Company’s Board of Directors approved the 2023 Employee Stock Purchase Plan (the “2023 ESPP”), and on April 20, 2023, the 2023 ESPP was approved by the Company’s stockholders. The 2023 ESPP enables eligible employees of the Company and certain of its subsidiaries (a “Participating Subsidiary”) to use payroll deductions to purchase shares of the Company’s common stock and acquire an ownership interest in the Company. The maximum aggregate number of shares of the Company’s common stock that have been reserved as authorized for the grant of options under the 2023 ESPP is 350,000 shares, subject to adjustment as provided for in the 2023 ESPP. Participation in the 2023 ESPP is voluntary and is limited to eligible employees (as such term is defined in the 2023 ESPP) of the Company or a Participating Subsidiary who (i) has been employed by the Company or a Participating Subsidiary for at least 90 days and (ii) is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year. Each eligible employee may authorize payroll deductions of 1% to 15% of the eligible employee’s compensation on each pay day to be used to purchase up to 1,500 shares of common stock for the employee’s account occurring during an offering period. The 2023 ESPP has a term of ten (10) years commencing on April 20, 2023, the date of approval by the Company’s stockholders, unless otherwise earlier terminated. F- 23 Table of Contents Under the provisions of the 2023 ESPP, participants purchase common stock at 85% of the closing price of the Company’s common stock at the start or end of each six-month offering period, whichever is lower. Compensation expense recorded for the ESPP was $ 32,000 and $ 52,000 for the fiscal year ended June 30, 2026 and 2025, respectively. Common stock purchases under the 2023 ESPP are reflected below: SCHEDULE OF EMPLOYEE STOCK PURCHASE PLAN Shares of Common Stock Price per Share Shares authorized under the 2023 ESPP 350,000 Purchase - March 28, 2024 37,543 $ 2.80 Purchase - September 30, 2024 20,987 $ 2.58 Purchase - March 31, 2025 29,350 $ 1.46 Purchase - September 30, 2025 26,312 $ 1.39 Purchase - March 31, 2026 21,248 $ 0.91 Available under the 2023 ESPP as of June 30, 2026 214,560 NOTE 11 – STOCK-BASED COMPENSATION EXPENSE Stock-based compensation (“SBC”) expense represents the estimated fair value of stock options, RSUs, PSUs and ESPP shares at the beginning of each offering period, amortized under the straight-line method over the requisite service period and reduced for estimated forfeitures. For PSUs with only performance conditions, recognition of SBC expense is delayed until the performance-based vesting conditions are deemed probable of being achieved, at which time the unrecognized SBC to date is recognized. For PSUs with market conditions, SBC expense is recognized beginning on the date of grant over the requisite service period regardless of whether the market condition is ultimately satisfied. At June 30, 2026, none of the PSUs with performance only conditions were deemed to be probable of achievement and no related stock-based compensation has been recognized to date. The following table summarizes SBC expense: SCHEDULE OF STOCK-BASED COMPENSATION EXPENSES 2026 2025 Fiscal year ended June 30, 2026 2025 Selling and administrative $ 912,000 $ 852,000 Research and development 61,000 127,000 Total stock-based compensation expense $ 973,000 $ 979,000 At June 30, 2026 and 2025, the unamortized stock-based compensation expense relating to outstanding stock options, RSUs and PSUs (excluding PSUs with performance conditions deemed “not probable”) was approximately $ 1,060,000 and $ 312,000 , respectively, which are expected to be expensed over the weighted-average remaining term of 1.4 years and 0.9 years, respectively. F- 24 Table of Contents NOTE 12 – INCOME TAXES Pursuant to the provisions of FASB ASC Topic No. 740 Income Taxes (“ASC 740”), deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss and tax credit carryforwards. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets, a valuation allowance of approximately $ 27,656,000 and $ 27,508,000 has been established to offset the net deferred tax assets as of June 30, 2026 and 2025, respectively, The Company is subject to taxation in the United States, California and Georgia. The Company’s tax years from 2010 and forward are subject to examination by the federal and state taxing authorities due to the carry forward of unutilized net operating losses and research and The Company has incurred losses since inception. A state income tax provision of $ 1,000 has been recorded for the year ended June 30, 2026 for state minimum and net worth taxes. The provision for the previous year was $ 4,000 , as follows: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) 2026 2025 Fiscal year ended June 30, 2026 2025 Current provision: Federal $ - $ - State 1,000 4,000 Total current 1,000 4,000 Deferred income tax provision: Federal State - - Total deferred - - Total income tax provision $ 1,000 $ 4,000 The provision for income taxes on earnings subject to income taxes differs from the statutory federal rate at June 30, 2026, due to the following: SCHEDULE OF PROVISION FOR INCOME TAXES Amount % of net loss before income taxes Fiscal year ended June 30, 2026 Amount % of net loss before income taxes Net loss before income taxes 7,448,000 U.S. federal statutory tax rate $ ( 1,564,000 ) 21.00 % State income taxes, net of federal benefit (1) 1,000 ( 0.01 )% Permanent differences and other Other true ups Non-taxable or non-deductible items Stock-based compensation 105,000 ( 1.41 )% Other adjustments 17,000 ( 0.23 )% Changes in valuation allowance 317,000 ( 4.26 )% Other - - Prior period adjustments 1,125,000 ( 15.11 )% Provision for income taxes $ 1,000 ( 0.01 )% (1) State taxes in California make up the majority of the tax effect in this category. F- 25 Table of Contents As previously disclosed for the year ended June 30, 2025, prior to the adoption of ASU 2023-09, the provision for income taxes on earnings subject to income taxes differs from the statutory federal rate, due to the following: Fiscal year ended June 30, 2025 Federal income taxes at 21 % $ ( 1,401,000 ) U.S. federal statutory tax rate $ ( 1,401,000 ) State income taxes, net ( 223,000 ) State income taxes, net of federal benefit ( 223,000 ) Permanent differences and other 178,000 Other true ups 425,000 Change in valuation allowance 1,025,000 Changes in valuation allowance 1,025,000 Provision for income taxes $ 4,000 Significant components of the Company’s net deferred tax assets are shown in the table below. SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2026 2025 Fiscal year ended June 30, 2026 2025 Deferred tax assets: Net operating loss carryforwards $ 23,674,000 $ 22,222,000 Research and development credit carryforward 27,000 27,000 Capitalized research and development expenses 1,405,000 2,323,000 Stock compensation 68,000 20,000 Disallowed interest expense 879,000 740,000 Lease liability 516,000 322,000 Other, net 1,610,000 2,138,000 Gross deferred tax assets 28,179,000 27,792,000 Less: valuation allowance ( 27,656,000 ) ( 27,508,000 ) Total deferred tax assets 523,000 284,000 Deferred tax liabilities: Capital lease asset ( 22,000 ) - Right of use asset ( 501,000 ) ( 284,000 ) Total deferred tax liabilities ( 523,000 ) ( 284,000 ) Total net deferred tax liabilities $ - $ - At June 30, 2026, the Company had unused net operating loss (“NOL”) carryovers of approximately $ 84,529,000 and $ 86,022,000 available to offset future federal and state taxable income, respectively. Federal NOL carryforwards arising after 2017 of approximately $ 62,122,000 do not expire. Federal NOL carryforwards arising before 2018 of approximately $ 22,408,000 and the California NOL carryforwards of $ 83,234,000 begin to expire in 2030. The Georgia NOL carryforwards of $ 2,789,000 do not expire. Internal Revenue Code Section 382 limits the use of our net operating loss carryforwards if there has been a cumulative change in ownership of more than 50% within a three-year period. The Company has not yet completed a Section 382 study. If such analysis determines there is a limitation on the use of net operating loss carryforwards to offset future taxable income, the recorded deferred tax asset relating to such net operating loss carryforwards will be reduced. However, as the Company has recorded a full valuation allowance against its net deferred tax assets, there would be no impact on the Company’s consolidated financial statements as of June 30, 2026 and 2025. F- 26 Table of Contents Under ASC 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. In accordance with ASC 740, there are no unrecognized tax benefits as of June 30, 2026 and 2025. The One Big Beautiful Bill Act of 2025 (the “2025 Tax Act”) was signed into law on July 4, 2025. The 2025 Tax Act, among other things, allows for immediate expensing for domestic research and development expenditures. These provisions did not have a material effect on the Company’s financial statements for the year ended June 30, 2026. NOTE 13 – CONCENTRATIONS Credit Risk The Company is subject to potential concentrations in credit risk that consist principally of its cash deposits in banking institutions and its unsecured trade accounts receivable. The Company maintains cash balances in non-interest-bearing bank deposit accounts at a California commercial bank. The Company’s cash balance at this institution is secured by the Federal Deposit Insurance Corporation up to $ 250,000 . As of June 30, 2026 and 2025, cash deposited was approximately $ 305,000 and $ 1,334,000 , respectively. The Company has not experienced any losses in its cash accounts, and therefore management believes that the Company is not exposed to any significant credit risk with respect to its cash deposits. As of June 30, 2026, the Company had three major customers that each represented more than 10 % of its accounts receivable on an individual basis, and together represented approximately $ 3,525,000 or 73 % of its total accounts receivable. Of that total, 96 % is outstanding for less than 60 days from invoice date. The Company has not experienced, nor does it expect to experience, any significant losses in such accounts. Management therefore believes that the Company is not exposed to any significant credit risk with respect to its trade accounts receivable. Customer Concentrations During the year ended June 30, 2026, the Company had two major customers that each represented more than 10 % of its revenues on an individual basis, and together represented approximately $ 30,065,000 or 71 % of its total revenues. During the year ended June 30, 2025, the Company had three major customers that each represented more than 10 % of its revenues on an individual basis, and together represented approximately $ 48,288,000 or 73 % of its total revenues. Suppliers/Vendor Concentrations The Company obtains components and supplies included in its products from a group of suppliers. The Company does not manufacture the battery cells used in energy storage solutions. Battery cells, which are an integral part of 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. government on goods imported into the U.S., imports from the battery cell supplier in China were temporarily paused. The 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 the Company’s ability to cost-effectively source from the supplier in China. During the year ended June 30, 2026 the Company had one supplier who accounted for more than 10 % of its total purchases, which represented approximately $ 7,002,000 or 20 % of its total purchases. During the year ended June 30, 2025, the Company had one supplier who accounted for more than 10 % of its total purchases, which represented approximately $ 15,901,000 or 28 % of its total purchases. F- 27 Table of Contents NOTE 14 – SEGMENT INFORMATION The Company has one business activity and derives its revenue from the design, development, manufacturing and sale of 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 stationary energy storage. Accordingly, the Company operates as a single operating and reporting segment. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial information including operating results and assets on a consolidated basis. When evaluating the Company’s financial performance and making strategic decisions, the CODM uses net loss and Adjusted EBITDA to assess performance and allocate financial, capital and personnel resources. Net loss and Adjusted EBITDA are used in the annual operating plan and forecasting process as well as ongoing decisions driven by the monthly or quarterly reviews of the plan versus actual results. The table below is a summary of the segment profit or loss, including significant segment expenses, for the periods presented: SCHEDULE OF SEGMENT INFORMATION 2026 2025 Fiscal year ended June 30, 2026 2025 Revenues $ 42,132,000 $ 66,434,000 Less: Cost of sales 29,415,000 44,694,000 General and administrative 12,485,000 18,337,000 Selling and marketing 2,913,000 2,965,000 Research and development 2,814,000 4,464,000 Depreciation 979,000 1,002,000 Other expense, net 121,000 81,000 Interest expense, net 853,000 1,565,000 Net loss $ ( 7,448,000 ) $ ( 6,674,000 ) Assets provided to the CODM are consistent with those reported on the consolidated balance sheets. All long-lived assets are held in the United States, and revenues and net losses are solely generated from operations in the United States. NOTE 15 – SUBSEQUENT EVENTS Management evaluated events subsequent to June 30, 2026 through the filing date of these consolidated financial statements and concluded there are no material subsequent events to disclose other than those presented as follows. On July 24, 2026, the Listing Qualifications Department (the “Staff”) of Nasdaq notified (the “July 2026 Notice”) the Company that for 30 consecutive business days preceding the date of the July 2026 Notice, the bid price of the Company’s common stock had closed below the $ 1.00 per share minimum required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The July 2026 Notice has no effect on the listing of the Company’s common stock at this time, and the Company’s common stock continues to trade on the Nasdaq Capital Market under the symbol “FLUX”. F- 28 Table of Contents Under Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days following the date of the July 2026 Notice to regain compliance with the Minimum Bid Price Requirement (the “Compliance Period”). If at any time during the Compliance Period the closing bid price of the Company’s common stock is at least $ 1.00 for a minimum of 10 consecutive business days, the Company will regain compliance with the Minimum Bid Price Requirement and the Company’s common stock will continue to be eligible for listing on the Nasdaq Capital Market absent noncompliance with any other requirement for continued listing. If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the Compliance Period, the Company may be afforded an additional 180 calendar days to regain compliance with the Minimum Bid Price Requirement (the “Additional Compliance Period”) if on the last day of the Compliance Period the Company is in compliance with the market value of publicly held shares requirement for continued listing as well as all other standards for initial listing of its common stock on the Nasdaq Capital Market (other than the Minimum Bid Price Requirement), unless the Company does not indicate its intent to cure the deficiency, or if it appears to Nasdaq that it is not possible for the Company to cure the deficiency. If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the Compliance Period, or the Additional Compliance Period, if applicable, the Company’s common stock will be subject to delisting. The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider implementing available options to regain compliance with the Minimum Bid Price Requirement. There can be no assurance that the Company will regain compliance within the Minimum Bid Price Requirement during the Compliance Period, secure an Additional Compliance Period to regain compliance, or maintain compliance with the other Nasdaq continued listing requirements. F- 29