Flux Power hit by loan covenant default

Flux Power Holdings, Inc. reported that it failed to meet the minimum EBITDA financial covenant for the trailing three-month period ended March 31, 2026 under its Loan and Security Agreement with Gibraltar Business Capital, LLC, triggering an Event of Default.

Filing Impact

(Very High)

Filing Sentiment

(Neutral)

Form Type

8-K

Rhea-AI Filing Summary

Flux Power Holdings, Inc. reported that it failed to meet the minimum EBITDA financial covenant for the trailing three-month period ended March 31, 2026 under its Loan and Security Agreement with Gibraltar Business Capital, LLC, triggering an Event of Default.

The company is negotiating an amendment or waiver with Gibraltar, which is currently allowing continued access to the line of credit but may limit access or accelerate repayment. As of March 31, 2026, the outstanding balance under the loan agreement was about $6.5 million.

Positive

None.

Negative

EBITDA covenant default and Event of Default under the Loan and Security Agreement with Gibraltar Business Capital, giving the lender the right to terminate commitments or accelerate approximately $6.5 million in outstanding obligations.

Insights

EBITDA covenant breach creates default risk around a $6.5M credit line.

Flux Power failed the minimum EBITDA covenant for the three months ended March 31, 2026, which constitutes an Event of Default under its Loan and Security Agreement with Gibraltar Business Capital. This gives the lender significant discretion over the facility.

Although Gibraltar is currently permitting access to the line of credit while negotiations proceed, it can restrict borrowing or declare all obligations immediately due and payable. The filing notes an outstanding balance of about $6.5 million, so any acceleration or termination would pressure liquidity.

The company has renegotiated this agreement before and expresses optimism about securing an amendment or waiver, but explicitly cautions that there is no assurance of success or favorable terms. Future disclosures on any amendment, waiver, or changes in credit access will be key to understanding ongoing financing flexibility.

8-K Event Classification

Item 8.01 — Other Events

1 item

Item 8.01 Other Events Other

Voluntary disclosure of events the company deems important to shareholders but not covered by other items.

Key Figures

Outstanding loan balance: $6.5 million Covenant period end date: March 31, 2026 Loan agreement date: July 28, 2023

3 metrics

Outstanding loan balance $6.5 million Outstanding under Loan and Security Agreement as of March 31, 2026

Covenant period end date March 31, 2026 Trailing three-month EBITDA covenant measurement period

Loan agreement date July 28, 2023 Date of Loan and Security Agreement with Gibraltar Business Capital

Key Terms

Event of Default, Loan and Security Agreement, financial covenant, secured party, +1 more

5 terms

Event of Default financial

"which resulted in an “Event of Default” under the Loan Agreement"

An event of default is a specific breach of a loan or bond agreement—such as missed payments or breaking agreed rules—that gives lenders the legal right to act, for example by demanding immediate repayment, seizing collateral, or accelerating other obligations. For investors, it’s a red flag because it can sharply reduce a company’s ability to operate or raise money, like a car lender repossessing a vehicle after missed payments, and often leads to falling share or bond prices.

Loan and Security Agreement financial

"under the Loan and Security Agreement, dated as of July 28, 2023"

A loan and security agreement is a legal contract that sets out the amount, repayment schedule, interest and the rules a borrower must follow, and it names specific assets a lender can claim if the borrower fails to pay. Think of it like a mortgage or car loan where the lender holds a claim on collateral until the debt is repaid. Investors care because it determines a company’s repayment priorities, borrowing costs, operational limits and how easily creditors can seize assets in distress, all of which affect equity value and credit risk.

financial covenant financial

"failed to comply with the minimum EBITDA financial covenant for the trailing three-month period"

A financial covenant is a clause in a loan or credit agreement that requires a borrower to keep specific financial measures—such as cash levels, profit, or debt ratios—within agreed limits. Investors watch these rules because breaking them can let lenders demand immediate repayment, impose penalties, or restrict a company’s ability to pay dividends or take on new projects; think of it as house rules that, if violated, can force sudden, costly changes.

secured party financial

"which include, among other things, its rights as a secured party under the Loan Agreement"

forward-looking statements regulatory

"This on contains “forward-looking statements” relating to the Company’s business"

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What did Flux Power Holdings (FLUX) disclose about its loan covenants?

Flux Power disclosed that it failed to meet the minimum EBITDA financial covenant for the trailing three-month period ended March 31, 2026 under its Loan and Security Agreement, which caused an Event of Default and triggered lender rights under that agreement.

How much does Flux Power (FLUX) owe under the Gibraltar loan agreement?

As of March 31, 2026, Flux Power reported an outstanding balance of approximately $6.5 million under its Loan and Security Agreement with Gibraltar Business Capital. This amount could be declared immediately due and payable following the Event of Default.

What actions can Gibraltar Business Capital take after the Event of Default at FLUX?

Following the Event of Default, Gibraltar Business Capital may terminate its commitments to Flux Power and declare all obligations immediately due and payable, and may exercise other secured-party remedies available under the Loan and Security Agreement without further demand or notice.

Is Flux Power (FLUX) still able to use its line of credit?

Flux Power states that Gibraltar Business Capital is currently allowing continued access to its line of credit while they negotiate an amendment or waiver. However, Gibraltar may choose to limit this access at any time until an amendment or waiver is successfully obtained.

What is Flux Power (FLUX) doing in response to the loan covenant default?

Flux Power is working with Gibraltar Business Capital to negotiate an amendment to the Loan and Security Agreement or obtain a waiver of the covenant breach. The company notes past success renegotiating but cautions there is no assurance of favorable terms or any resolution.

What risks does Flux Power (FLUX) highlight regarding this Event of Default?

Flux Power highlights risks related to its ability to negotiate an amendment or obtain a waiver, and its continued access to the line of credit. The lender’s ability to accelerate obligations or limit access could materially affect liquidity and operations if not resolved favorably.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 04/03/2026 - 09:03 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): March 31, 2026

FLUX POWER HOLDINGS, INC.

(Exact name of registrant as specified in charter)

Nevada

001-31543

92-3550089

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

2685 S. Melrose Drive

Vista, CA 92081

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: 877-505-3589

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

FLUX

The Nasdaq Global Market LLC

(Nasdaq Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01. Other Events.

On March 31, 2026, Flux Power Holdings, Inc. (the “Company”) determined that the Company failed to comply with the minimum EBITDA financial covenant for the trailing three-month period ended March 31, 2026 under the Loan and Security Agreement, dated as of July 28, 2023 (as amended to date, the “Loan Agreement”), by and between the Company and Gibraltar Business Capital, LLC (“GBC”), which resulted in an “Event of Default” under the Loan Agreement. The Company is working with GBC to negotiate an amendment to the Loan Agreement or otherwise obtain a waiver from GBC. GBC has allowed the Company to continue to have access to its line of credit under the Loan Agreement while negotiations continue, however, GBC can choose to limit this access at any time until the Company can successfully negotiate an amendment to the Loan Agreement or obtain a waiver from GBC. While the Company has in the past successfully renegotiated the terms of the Loan Agreement, and is optimistic about its ability to do so again, there can be no assurances that the Company will be able to negotiate an amendment to the Loan Agreement or obtain a waiver from GBC on terms favorable to the Company or at all. In addition, upon the occurrence of an Event of Default under the Loan Agreement, GBC may, at its option, declare its commitments to the Company terminated and all obligations of the Company under the Loan Agreement 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 Loan Agreement. As of March 31, 2026, the outstanding balance under the Loan Agreement was approximately $6.5 million.

Forward-Looking Statements

This Current Report on Form 8-K contains “forward-looking statements” relating to the Company’s business, that are often identified using “believes”, “expects”, or similar expressions. Forward-looking statements involve several estimates, assumptions, risks, and other uncertainties that may cause actual results to be materially different from those anticipated, believed, estimated, expected, etc. Accordingly, statements are not guarantees of future results. Some of the factors that could cause the Company’s actual results to differ materially from those projected in any such forward-looking statements include, but are not limited to, risks and uncertainties related to the Company’s ability to negotiate an amendment to the Loan Agreement or obtain a waiver from GBC and the Company’s continued access to its line of credit under the Loan Agreement. Actual results could differ from those projected due to numerous factors and uncertainties. Although the Company believes that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, the Company can give no assurance that such statements will prove to be correct, and that the Company’s actual results of ‎operations, financial condition and performance will not differ materially from the ‎results of operations, financial condition and performance reflected or implied by these forward-‎looking statements. Undue reliance should not be placed on the forward-looking statements and investors should refer to the risk factors outlined in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and the Company’s subsequent filings with the Securities and Exchange Commission. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update these statements or the reasons why actual results could differ from those projected, except as required by law.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 3, 2026	Flux Power Holdings, Inc.

	By:	/s/ Kevin Royal
		Kevin Royal
		Chief Financial Officer

Source: View Original Filing on SEC EDGAR

Filing Exhibits & Attachments

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Flux Power hit by loan covenant default