Flux Power Defaults on Debt Covenant, $6.5M Loan at Risk
FLUX sits 15% above its 52-week low of $0.97 on light trading volume (0.2× avg).
Summary
Flux Power has reported an Event of Default after failing to meet its minimum EBITDA covenant for the quarter ended March 31, 2026, under its loan agreement with Gibraltar Business Capital. Approximately $6.5 million remains outstanding under the loan. This development actualizes the 'substantial doubt about its ability to continue as a going concern due to an impending debt covenant breach' that the company disclosed in its Q2 2026 10-Q filing. While GBC is currently negotiating an amendment or waiver, it retains the right to limit credit line access or declare the entire outstanding obligation immediately due, posing a significant liquidity and operational risk for Flux Power. Investors should closely monitor the outcome of these renegotiations and any potential impact on the company's financial stability.
At the time of this announcement, FLUX was trading at $1.12 on NASDAQ in the Industrial Applications And Services sector, with a market capitalization of approximately $23.9M. The 52-week trading range was $0.97 to $7.55. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Wiseek News.