Flux Power Defaults on $6.5M Loan Covenant, Triggering Event of Default

summarizeSummary

Flux Power Holdings, Inc. has triggered an event of default on a $6.5 million loan due to failing an EBITDA covenant, raising significant concerns about its financial stability and ability to continue as a going concern.

check_boxKey Events

• Loan Covenant Breach

  The company failed to meet its minimum EBITDA financial covenant for the trailing three-month period ended March 31, 2026.

• Event of Default Triggered

  This breach resulted in an 'Event of Default' under its Loan and Security Agreement with Gibraltar Business Capital, LLC.

• Substantial Debt at Risk

  Approximately $6.5 million in outstanding debt as of March 31, 2026, is now at risk of being declared immediately due and payable by the lender.

• Ongoing Negotiations

  The company is working with the lender to negotiate an amendment or waiver, with continued access to the line of credit allowed during discussions, but with no assurances of a favorable outcome.

auto_awesomeAnalysis

Flux Power Holdings, Inc. has formally disclosed an Event of Default on its Loan and Security Agreement with Gibraltar Business Capital, LLC. This critical development stems from the company's failure to meet its minimum EBITDA financial covenant for the quarter ended March 31, 2026. Approximately $6.5 million in outstanding debt is now at risk of being declared immediately due and payable, which is a substantial amount for a company of this size. While negotiations for an amendment or waiver are ongoing and the lender has temporarily allowed continued access to the credit line, there are no assurances of a favorable resolution. This event significantly heightens the previously disclosed 'going concern' risk, as the company's ability to maintain liquidity and operations is directly threatened by the potential acceleration of this debt.