After saying it is not sure if it has enough capital for the next 12 months, rechargeable battery maker Flux Power Holdings Inc. has restructured three loan agreements.
Vista, Calif.-based Flux Power announced on Oct. 22 that it had extended the maturity dates on two loan agreements and amended a third. The company extended the maturity date of a $1 million revolving promissory note through Dec. 31, 2015 with Esenjay Investments LLC on Oct. 16. The company extended the maturity date of another note with Esenjay, for $250,000, to Dec. 31, 2015.
Flux Power announced that it modified the terms of a $1.5 million line of credit with Esenjay to lower the interest rate to 6 percent, extend the maturity date to Dec. 31, 2015, increase the line to $2 million and grant Esenjay options to convert $400,000 of the outstanding amount to common stock in Flux Power.
The company has a deficit of $3.98 million. Auditors have raised doubts about Flux Power’s ability to continue as a going concern, it says in an October filing with the SEC. In that filing, Flux Power said that it did not have enough capital to meet its needs over the next 12 months. The company is pursuing additional sources of funding, including distributor relationships, joint operating ventures or M&A.
The company’s total assets have decreased from $4.97 million at the end of June 2012 to about $1.98 million on June 30, 2013.
Since 2010, Flux Power has changed the marketing focus of the business to focus on manufacturers of large equipment, in hopes of achieving higher long-term revenue by focusing on a smaller number of products and on customers that do not require long periods of product development and negotiation. Before the switch, Flux Power focused on lead-acid technologies and energy storage services, such as rechargeable batteries, and will now focus on lift equipment and micro-grid electric storage, including industrial electronic vehicles. The company’s battery systems include cell balancing, monitoring and error-reporting technologies.
Flux power believes that the advanced energy storage market will grow because of demand from electric vehicle manufacturers.
“Our competitors, in general, have more funding and bigger sales, marketing and research efforts than we do,” Flux Power. But the company says it provides technological and business advantages over competitors, including a lower capitalization structure.
Other struggling alternative energy companies on Mergers & Acquisitions’ Distressed Company Watch List include: Envision Solar International Inc., which makes solar panels for parking garages; LDK Solar Co. Ltd., which makes multicrystalline solar wafers for solar panels; Leo Motors Inc., which makes electric vehicles; and Xzeres Corp., which makes and sells wind turbines.
For last week’s edition of Turnaround Tuesday, see "China Ginseng Takes Steps to End Troubles."
For more struggling companies, see Mergers & Acquisitions Distressed Company Watch List.