![]() ![]() Moreover, raising just $5.7 million (before commissions) would only provide Flux Power with an additional 90 days of runway, insufficient to remove the going concern language in the quarterly report. Wrainwright but with an average daily trading volume of just 105k shares, the impact on the stock price would likely be devastating. Given this issue, a near-term capital raise appears to be in the cards.Īt the end of Q2, the company had approximately $5.7 million left under its $20 million at-the-market offering program with H.C. ![]() With supply chain issues and associated cost inflation unlikely to go away anytime soon, Flux Power's working capital needs will likely remain elevated for the next couple of quarters.Įven when assuming the company returning to its previous quarterly cash burn rate of approximately $5 million, Flux Power would be out of funds at the end of June. As of December 31, 2021, the Company had a cash balance of $7,855,000 and may need to raise additional capital in the near future. These events have placed pressure on the Company’s margins and cash resources and raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months following the filing date of this Quarterly Report on Form 10-Q. The massive liquidity drain resulted in the requirement to include a going-concern warning in the company's quarterly report on form 10-Q (emphasis added by author):ĭelays in the receipt of key component parts due in part to supply chain disruptions as well as recent changes in the design of the product offering have impacted the Company’s ability to fulfill the backlog of sales orders as planned. Our goal is to monetize our existing backlog of $31.4 million in the months ahead and improve our working capital and cash flow needs. We ended the second quarter with $7.9 million in cash, and $19.6 million in product inventory. This combination of factors increased our operating expenses and reduced gross profit.Ĭash usage in the second quarter of 2022 was also elevated due to global supply chain disruptions leading to high levels of inventory as well as new strategic initiatives that include new product designs, production facility improvements and better supply chain management. To address the unprecedented level of supply chain uncertainty, we elected to build inventory levels of key component parts. We experienced higher costs to obtain key components of our energy solutions and delays in the receipt of such parts which led to manufacturing and shipping delays. #Flux capital inc free#While the company's top- and bottom line results largely matched analyst expectations, Flux Power's cash usage reached new all-time highs.Ĭost inflation and ongoing supply chain disruptions resulted in negative free cash flow of $11.3 million for the quarter thus causing cash and cash equivalents to decline to just $7.9 million despite an initial $3.5 million drawdown under the company's $6.0 million revolving credit facility with Silicon Valley Bank.Īlthough customer demand was strong during the second quarter, our profitability was negatively impacted by continued disruption in our supply chain. On Thursday, lithium-ion battery manufacturer Flux Power Holdings ( NASDAQ: FLUX) or "Flux Power" reported less-than-stellar Q2/FY2022 results. Past performance is not an indicator of future results.Stock photo and footage/iStock via Getty Images Note: The awards shown above may not be representative of any one client’s experience. ![]()
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