Flux Power Holdings, Inc. Liquidation Value

Flux Power Holdings (FLUX) as of March 31, 2026 presents a deeply stressed recovery posture under a liquidation lens. MFFAIS pegs cash liquidation value at negative $21.2 million, liquid liquidation value at negative $17.3 million, and operating liquidation value at negative $0.6 million — all deeply negative, consistent with a balance sheet that cannot cover liabilities even under the most optimistic asset recovery assumptions.

Asset side: Total assets of $25.6 million are dominated by inventory ($16.7 million, or 65% of total assets) and accounts receivable ($3.9 million net of $86K allowance). Applying standard liquidation haircuts — 60% on inventory yields approximately $10.0 million, 90-95% on AR yields approximately $3.5-3.7 million, 50-70% on PP&E of $1.3 million yields approximately $0.65-0.93 million, and cash at $0.37 million at par — produces estimated gross liquidation proceeds of roughly $14.5-15.0 million. Operating lease ROU asset ($748K) and other non-cash assets receive zero recovery under the liquidation lens.

Liability side: Total liabilities of $21.0 million are held at face value. Current liabilities of $20.6 million include: revolving line of credit ($5.7 million drawn, though $0 tagged as long-term LineOfCredit), accounts payable ($8.3 million), accrued liabilities ($5.6 million), product warranty accrual ($2.8 million), and operating lease current ($0.6 million). Critically, on March 31, 2026 the company triggered an event of default under the GBC Credit Facility by failing the minimum EBITDA covenant. GBC issued a formal Notice of Default on April 3, 2026. The revolving facility (drawn balance approximately $5.7 million) is immediately callable by GBC at its option. GBC holds a first-priority security interest over substantially all tangible and intangible assets. In a liquidation, GBC would be paid first, ahead of other unsecured trade creditors.

After applying haircuts, estimated asset recovery of approximately $14.5-15.0 million falls short of $21.0 million in face-value liabilities, yielding a recovery shortfall to equity of approximately $6-7 million — consistent with the MFFAIS CLV of negative $21.2 million (which also incorporates prior-period losses and accumulated deficit of $111.5 million). Stockholders' equity of $4.6 million on book is illusory under liquidation assumptions.

Since the prior filing (December 31, 2025), the credit facility deteriorated from anticipated covenant breach to actual default. Cash declined from $0.9 million to $0.4 million. Revenue dropped a further 61% year-over-year in Q3 FY2026 ($6.6 million vs. $16.7 million). Inventory remains elevated at $16.7 million against sharply reduced revenue run-rate, raising excess and obsolescence risk. The company remains Form S-3 ineligible, constraining equity capital access. Going-concern language is explicitly included. Backlog as of March 31, 2026 was $5.3 million, down from $9.9 million at June 30, 2025 and $16.9 million at March 31, 2025, signaling continued demand deterioration. The securities class action settled for $1.75 million (company portion approximately $600K) and derivative settlement includes $425K in fees; both are substantially resolved. Filing discusses E&O reserve increase in Q3 FY2026 cost of sales but does not separately XBRL-tag the E&O reserve balance.