FLUX · Flux Power Holdings, Inc.

Flux Power Holdings has experienced a significant financial covenant breach under its Loan and Security Agreement with Gibraltar Business Capital, LLC. The company failed to meet the minimum EBITDA requirement for the three-month period ending March 31, 2026, which automatically triggered an event of default. This development gives the lender substantial leverage, including the right to accelerate repayment of the entire $6.5 million outstanding balance immediately. While the company has historically renegotiated terms with this lender and remains optimistic about reaching another agreement, the filing explicitly states there are no assurances of success. The lender's temporary allowance of continued credit line access provides some operational breathing room, but this accommodation can be revoked at any time during negotiations. This covenant failure represents a material deterioration in the company's financial position and creates substantial uncertainty around its near-term liquidity and financing arrangements. The event of default status exposes the company to potential asset seizures or other remedies available to secured creditors under the agreement.