Committed to be the most competitive technology-leading manufacturer of lithium batteries!

HGB

Flux Power Holdings, Inc (FLUX)

by:HGB     2020-06-06
Washington, D. C. Securities and Exchange CommissionC. 20549 FORM 10-
K☒Annual report for the fiscal year as of June 30, 2018 submitted under Section 13 or 15 (d) of section 1934 of the Securities Trading Act☐Transition Report submitted under section 1934 Commission File No. Securities Trading Act or section 15 (d): 000-
25909 Flux Power Holdings Limited
(The exact name of the registrant specified in the articles of association) Nevada 86-
0931332 (state or other jurisdiction)R. S.
Employer Registration or organization) identification number) 985 92081 Red Avenue, Vista A suite, California (main executive office address) 877-505-
3589 (telephone number of registrant, including area code) securities registered under section 12 (B) of the act: securities registered under section 12 (g) of the act: $0 of common stock.
001 face value (category title), indicated by check mark if the registrant is a well
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Non-Voting Ordinary Shares held
As of December 31, 2017 (the last working day of the second fiscal quarter recently completed by the registrant), the registrant\'s affiliates were approximately $3,055,816.
As of September 24, 2018, the number of outstanding shares of the registrant\'s common stock was 31,072,815 shares.
Documents incorporated for reference: none.
Flux Power Holdings LimitedFORM 10-
K item 1 of the first part of the annual report catalogue for the fiscal year ended June 30, 2018.
Business 4 project 1A.
Risk factors for project 1B 12.
Unresolved staff comments item 19 2.
Project 3 Property 19.
Item 4 of legal procedure 19.
Part II Project 5 coal mine safety disclosure 19.
Market item 20 of the registrant\'s common stock, related shareholder matters and the issuer\'s purchase of equity securities.
22 Selected Financial Data 7.
Management\'s Discussion and Analysis of the financial position and operational results of 23 7A.
29 Quantitative and Qualitative Disclosures on market risk 8.
Financial statements and supplementary information of item 9.
Changes and disagreements with accountants in accounting and financial disclosure 29 Item 9A controls and procedures 29 Item 9B.
The tenth item of the third part.
Project 11 directors, executive officers and corporate governance.
Item 12 administrative compensation 33.
Items 35 of the secured ownership of certain beneficial owners and management and related shareholders.
Certain relationships and related party transactions and independence of directors 35 14.
37 main accounting expenses and services for Part IV item 15.
Annex and financial statements schedule 38 signature 40 2 Special Note on Forward-Looking Statements
Look at the report. The forward-
The outlook statements are primarily included in the sections entitled \"Business Description\", \"risk factors\" and \"Management\'s Discussion and Analysis of Financial Position and operational results.
\"These statements relate to known and unknown risks, uncertainties and other factors that may lead to significant differences in our actual results, performance or achievements from any future results, performance or achievement expressed or implied by the striker-
Look at the report.
These risks and uncertainties include, but are not limited to, the factors described in the section entitled \"risk factors\" below.
In some cases, you can identify the forward
Statements in terms of \"expectation\", \"belief\", \"possibility\", \"estimate\", \"expectation\", \"intention\", \"possibility\", \"plan, \"Potential\", \"forecast\", \"project\", \"should\", \"will\" and similar expressions
Look at the report. Forward-
Forward-looking statements reflect our current view of future events, based on assumptions, and influenced by risks and uncertainties.
Given these uncertainties, you should not rely too much on these forward-looking
Look at the report. These forward-
Forward-looking statements include, among other things, statements relating to: ● our ability to obtain sufficient funds and alternative sources of funding to support our current and proposed operations;
● Our expected growth strategy and ability to effectively manage business expansion;
● Our ability to maintain or increase our market share in a competitive market;
● Our ability to keep up with rapidly changing technologies and evolving industry standards, including our ability to achieve technological progress;
● Our dependence on the growth of product demand;
● Our ability to diversify our products and seize new market opportunities;
● We are able to meet the needs of skilled labor, machinery, parts and raw materials economically;
And ● the loss of key members of our senior management. Also, forward-
Forward-looking statements represent our estimates and assumptions only on the date of publication of this report.
You should read the report in full and the documents we quoted and submitted as evidence of this report, and understand that our actual results in the future may be very different from what we expected.
We have no obligation to update any forwarding unless required by law-
Publicly looking for statements, or updating the reason why the actual results may differ materially from any forward expectations
Even if there is new information in the future, there should be forward-looking statements.
Use certain defined terms, unless otherwise required by the context, and only for the purposes of this report: ● \"Company\", \"change\", \"we\", and \"our\" refer to the consolidated business of Flux Power Holdings Limited
Nevada Corporation and its wholly owned subsidiaries
Subsidiaries owned by Flux Power, Inc.
(\"Flux Power\"), California corporation;
● The Trading Act refers to the revised Securities Trading Act of 1934;
● \"SEC\" means the Securities and Exchange Commission;
● The Securities Law refers to the revised Securities Law of 1933.
Part 1 Project 1-
Business Overview we design, develop and sell rechargeable premium lithium-
Ion batteries for industrial use, including our first
Lithium certified by UL 2771
Electric forklift battery.
We have developed an innovative high power battery management system (BMS) and built our business around this core technology.
Our proprietary BMS provides three key features for our battery system: ● Battery balance: this is achieved by indicators based on temperature, voltage, and internal impedance.
This unit balance management guarantees the life and performance of the entire system.
● Monitoring: this is performed by physical connection to a single battery, used to monitor the voltage, and calculated according to the basic indicators to determine the remaining capacity and internal impedance.
This monitoring ensures accurate measurements to best manage the system and ensure longevity.
● Error reporting: this is performed by analyzing the data from the system monitoring and making a decision on whether the system is running beyond the normal specification.
This error reporting is critical to system management as it ensures that the secondary device does not damage the storage system and provides operators with the opportunity to take corrective actions to keep the entire system alive.
To enhance this capability, telemetry and remote monitoring can be performed.
Using our proprietary BMS technology, we are able to provide our customers with fully integrated energy storage solutions or customized modular stand-alone systems.
In addition, we have developed a range of complementary technologies and products that accompany and enhance the capabilities of our core BMS products to meet the growing demand for advanced energy storage markets.
Our current business strategy is mainly for the elevator equipment market for dealers and distributors, followed by the airport ground support equipment market.
Our strategy is to complete the launch of a full range of forklift products in the fiscal year 2018, and we have several evaluation units with customers covering a full range of product lines and ground sales units to support the equipment market.
In January 2016, we were certified by the insurance business Laboratory (\"UL\") of the global safety science organization to certify that our forklift lift packaging is UL 2271 compliant.
The UL list shows the quality, safety and reliability of the elevator packaging production line we offer to our customers, dealers and OEM partners.
We believe that we have stood out from this effort by significantly enhanced products, especially in the functional areas of overall design and durability, as well as improving the value and performance of elevator packaging to our customers.
From May 2016, we shipped the first UL-certified lift bag to our customers.
Currently, we are working with a variety of elevator equipment OEMs (\"OEM\"), distributors and battery distributors to bring our advanced energy storage systems to the elevator equipment market.
These channels provide a range of flexibility for customers to evaluate and purchase traffic packages.
We also started marketing directly to the terminal.
Users, mainly in the food and beverage industry, focus on educating customers on the many benefits of lithium
In the Walkie Talkie pallet jack forklift, the ion battery is superior to the traditional lead-acid battery.
These benefits include no maintenance of water, faster charging time, longer duration and longer running time.
Such efforts have made Flux one of the 2017 Champions of Food Logistics magazine: a rock star in the [catering] supply chain.
This awareness highlights the growing interest in pilot and transport throughput enhancement packages
Transfer business at the growing food industry distribution center in the United States.
In addition, the current process of working with the elevator equipment Department includes obtaining \"technical approval\" from the original equipment manufacturer for its equipment compatibility, and then developing a sales network using existing battery dealers and equipment dealers.
Our product development includes pilot projects and trials with national account end users and industrial equipment manufacturers.
Such a pilot project provides us with very beneficial
Feedback needed to improve the battery pack.
Over the past few years, our main focus has been on our joining --
Electric walkie talkie pallet jack forklift horizontal lifting packing line.
We have started to roll out packaging for the full product line of electric forklifts.
Our modular and scalable design enables us to optimize the design, inventory, and number of parts to accommodate natural product extensions.
We are now driving and selling packaging to customers for Level 3 end riders, level 2 reach trucks and level 1 balance forklifts.
We plan to be competitive in providing UL certified packages and are currently implementing the strategy as assessed by the product department.
In addition to the introduction of forklift packaging, we also develop and sell lithium battery packs for airport ground support equipment.
Our first pilot project was organized by Averest.
He is a leading distributor of industrial batteries and chargers for aviation ground support equipment, working with a leading regional airline at Los Angeles International Airport.
The test items are considered to be unqualified success.
This successful pilot project, along with several subsequent trials with other major airlines, resulted in the sale of large volumes of goods to major service providers of airport ground services in the fiscal year 2018.
We also received additional orders delivered by the second major airline in the fall of 2018.
The recent appeal of these key customers highlights the scalability of our design and engineering capabilities, as well as the proprietary battery management technology we offer for a wide range of power applications.
Importantly, it also pushed us to a customer price point, creating a good growth potential for some rated power replacement products with a price of about $20,000 to $34,000 per pack
In conclusion, we are developing a complementary set of technologies and products that leverage our core BMS technology.
Sales for the year ended June 30, 2018 are mainly for customers across the United States.
We were registered in Nevada in 1998.
In May 2012, we changed our name to Flux Power Holdings, Inc. (“Flux”).
We operate our business through our wholly owned subsidiaries
Subsidiaries owned by Flux Power, Inc. (“Flux Power”).
The booster was established in October 2009 to provide solutions for the development of lithium battery markets for small electric vehicles.
On August 10, 2017, we submitted an amendment to the articles of association to Nevada to reverse the division of our common shares in a ratio of 1 to 10, every ten previous
The reverse stock split shares of common stock are automatically converted-
In the case of no change of $0, the reverse stock split the share of common stock.
001 face value or authorized quantity of our common stock (\"reverse stock split \").
The reverse stock split came into effect in Nevada on August 18, 2017.
Michael Johnson, our director and beneficial owner of Ensenjay Investments, LLC (\"Esenjay\"), owns most of our outstanding and outstanding common stock and in writing on July 7, 2017
With regard to the Reverse Stock division, the exercise price per share and the number of shares that can be issued when exercising or converting all outstanding options and warrants have been adjusted proportionally, the holder has the right to purchase, exchange or convert Convertible or convertible securities of shares of common stock.
All references in this annual report for all periods of common stock shares and data per share in table 10
K and its accompanying consolidated financial statements and their notes have been adjusted to reflect the reverse stock split on a retrospective basis.
Our business description our business is energy storage and battery management.
In October 2009, we began to develop technologies for the advanced energy storage market and began to deliver prototype products in 2010, while continuing to develop our intellectual property portfolio.
In 2011, we started shipping products that have been verified by Federal Motor Vehicle Safety Standards, and then started shipping auxiliary products to enhance our overall product line.
Our technology focuses on the battery management of large lithium batteries, significantly extending the life of the battery system, reducing the overall cost of ownership to the level of competition with lead
Acid is used in many applications.
In January 2016, we were certified from the insurer\'s Laboratory (\"UL\") with a certification range of UL 2271.
The UL list, released by the global safety science organization UL, shows the quality, safety and reliability of the elevator packaging production line we offer to our customers, distributors and OEM partners.
We believe that we have adopted a significantly enhanced product line, especially in terms of overall design and durability, as well as the functionality to enhance the value and performance of elevator packaging for our customers.
From May 2016, we shipped the first UL-certified lift bag to our customers.
Our LiFT package is now the first and only lithium listed by UL-
The brands of major OEMs have ion batteries.
In April 2016, we started to try out our customization. developed, 72-
Volt battery pack used with electric aviation ground support equipment.
Pilot projects organized by Averest
He is a leading distributor of industrial batteries and chargers for aviation ground support equipment, working with a leading regional airline at Los Angeles International Airport.
The test project ended in August 2016 and was considered a successful failure.
Now, we plan to work with a distributor focused on airlines to provide more test units for other airlines to support the sales cycle.
Successful development and 3-
Month pilot highlights the scalability of our design and engineering capabilities, as well as the proprietary battery management technology we offer for a wide range of power applications.
Importantly, it also pushed us to a customer price point, creating a good growth potential for some rated power replacement products with a price of about $20,000 to $34,000 per pack
Since then, we have developed, field-tested our evaluation units and sold lift pack units for Level 3 end riders, level 2 reach trucks and level 1 balance forklifts.
In order to better serve this market, the evaluation unit has provided us with important information on the further development of the battery pack.
We design, develop and sell rechargeable advanced energy storage systems.
We have developed an innovative high power battery management system (BMS) and built our business around this core technology.
Our proprietary BMS provides three key functions for our battery system: ● Battery balance: this is achieved by constantly adjusting the capacity of each battery in the storage system according to temperature and voltage, and internal impedance indicators.
This management guarantees the life and performance of the entire system.
● Monitoring: this is performed by a temperature probe, physical connection to a single battery, for the calculation of voltage and basic indicators to determine the remaining capacity and internal impedance.
This monitoring ensures accurate measurements to best manage the system and ensure longevity.
● Error reporting: this is performed by analyzing data from monitoring each individual unit and making decisions about whether a single unit or system is running beyond normal specifications.
This error reporting is critical to system management as it ensures that the secondary does not damage your storage system and provides operators with the opportunity to take corrective actions to keep the entire system alive.
To enhance this capability, telemetry and remote monitoring services can be provided.
With our proprietary battery management technology, we are able to provide our customers with fully integrated energy storage solutions or customized modular stand-alone systems.
In addition, we have developed a complementary set of technologies and products that accompany and enhance the capabilities of BMS to meet the needs of the growing market for advanced energy storage.
Industry Background of the energy storage market in recent years, the energy storage market has developed from a market that mainly relies on leading advantages.
The acid technology created in 1800 seconds to 1 second takes advantage of advanced chemistry and corresponding capabilities to store more energy in less space. Back-
Up power is increasingly relying on remote information processing to accurately measure the health of the system.
Electric vehicles have adopted lighter-weight energy storage to increase range and payload capabilities, and power grid management applications are trying to improve the cycle life of the system to ensure better returns on long-term investments.
We believe that all these demands will lead to exponential growth in the advanced energy storage market in the next five (5) to ten (10) years.
Lifting equipment-
Our current business focus is on elevator equipment.
Lifting equipment, commonly referred to as a forklift (also known as a forklift, forklift or forklift), is a power industrial truck for lifting and transporting materials.
Modern forklifts, some of the companies that appeared in the 1960 s, include the manufacture of transmission manufacturing companies Clark and gourd companies Yale and soup.
Since then, forklifts have become an indispensable equipment in manufacturing and warehousing operations.
Elevator equipment is produced from smaller elevator type equipment (such as walkie-talkie) with various power capacity (I . E.
, Pallet jack) to ride-on forklift.
Part of the forklift, especially the larger forklift, uses propane with an internal combustion engine as power.
With the steering of electric forklifts, this area has been experiencing a long-term decline.
The bigger forklift team is more of a battery-driven forklift.
Elevator equipment vehicles are not new technologies and new tests are not required, which may result in delays in product placement.
Main use of existing elevator equipment market
Acid batteries are a traditional technology that causes customers to be dissatisfied with the life cycle, performance, and additional maintenance costs.
We believe in alternatives to lead.
Acid batteries with lithium batteries greatly extend the operating time and battery system life, reducing the overall cost of ownership to a very competitive level with lead
Acid is used in many applications.
6 Other equipment solutions we have produced battery packs on the basis of opportunistic for applications such as robotic mining equipment, portable battery packs for field operations in the United StatesS.
Military, solar, power grid
Cooperate with energy storage in office environment.
We are currently building and selling lithium battery packs for airport equipment (commonly referred to as ground support equipment (\"GSE\") to power luggage/cargo trucks.
These packs provide a higher level of rated power up to 600 amps hours at 72 volts.
The initial customer response showed that our packaging performed very well and we were very satisfied.
Battery types currently address the most common battery technologies in the forklift equipment, electric vehicles and power grid management market including the following:
Acid Battery: Lead-
Acid is one of the most developed battery technologies because it has been in use since the 1800 s, modern lead
Acid Battery launched in 1913.
It is relatively easy to manufacture and is a cheap and ubiquitous energy storage medium.
Lead used by car manufacturers
Starting acid for battery and lead
Acid is widely used in electric vehicles and power grid management solutions.
Unfortunately, leadership
Compared with the advanced energy storage system technology, the acid battery has more energy weight per unit of storage and less power output per unit of mass, so it is not suitable for advanced applications such as power grid management equipment and electric vehicles.
In addition, lead may be harmful to the environment, and many countries are working to phase out this legacy technology.
Nickel Batteries: nickel batteries, nickel-cadmium (NiCd) or nickel-metal hydroxide (NiMH) are durable and inexpensive technologies with relatively high power.
Unfortunately, cadmium is not a safe material and exposure to it can cause harm to human health and damage to the environment.
The alternative to the toxic NiCd battery is NiMH, which has more energy than lead
More suitable for a wider range of applications.
NiMH was used in early electric cars and some other high-capacity storage applications.
The energy density of these chemicals is not as good as advanced lithium batteries, so it is now being eliminated from the advanced energy storage system market because of more energy density chemicals.
Traditional lithium chemistry: lithium batteries have higher energy density than lead
Acid, NiCd or NiMH batteries are more efficient in volume and weight.
In the 1990 s, lithium batteries were introduced into portable electronic devices such as laptops and mobile phones.
Unfortunately, early lithium cobalt is prone to heat problems when arranging in groups and can cause fire or explosion if the battery is damaged.
This makes early lithium batteries unsuitable for large power grid management equipment and electric vehicles.
Compared to compounds used in modern lithium batteries, cobalt in these early batteries is also a more expensive metal.
Advanced Energy Storage lithium battery: the generation of advanced energy storage lithium battery was developed at the end of 1990.
These new chemicals have improved in terms of energy density, volume and weight indicators.
The safety of these modern lithium batteries has also been greatly improved.
Today, the problems of high temperature and catastrophic failure do not bother advanced energy storage systems.
The cycle life of modern lithium batteries has also increased significantly.
This makes today\'s advanced energy storage systems most conducive to the use of electric vehicles and power grid management.
Other technologies: super capacitors and fuel cells are proposed as potential alternatives or alternatives to lithium batteries.
The power of the super capacitor is large, the cycle life is long, but the energy density is poor.
This makes them suitable for small burst power needs, but not for power grid storage and electric vehicle equipment.
The fuel cell generates energy that converts fuel, usually hydrogen, into energy.
The fuel cell system has good energy density and short charging time, but does not perform well in terms of power and cycle life.
The fuel cell system is suitable for equipment with low power demand and short service life, but due to the initial capital cost generated or purchased by hydrogen, the fuel cell system is generally not popular with forklifts.
The current advanced energy storage applications need to have some features, such as: target application power: advanced energy storage systems must be able to provide the required power.
Electricity measured in watts is the rate at which electricity is delivered.
In particular, electric industrial vehicles require sufficient power to ensure a smooth acceleration through the system discharge curve, and the grid management system requires sufficient power to meet the load requirements.
Charging time/Running time: the advanced energy storage system must be able to provide a certain amount of power.
The total electric energy is in units of Watt hours and is a product of power and time.
Compared with traditional technology, advanced energy storage systems with greater energy can operate in a longer period of time.
For example, lithium-
Conventional batteries with a specific capacity of equal or hourly rated current provide up to 25% of operating time.
The total power of the advanced energy storage system determines the range of each charge of the electric vehicle and the total power of the power grid management equipment.
7 High/continuous power: the total energy that the advanced energy storage system can provide depends on the power requirements of the equipment that installed the system.
When the advanced energy storage system provides higher power, the available energy of the advanced energy storage system is less than when providing lower power.
Advanced energy storage systems are more suitable to provide high power than traditional leading advantagesacid.
For example, the higher power required to drive vehicles through water like electric ships will be detrimental to traditional power technologies because they lack the ability to operate efficiently in high-power applications.
The advanced energy storage system can provide the required high power without compromising the energy storage system.
Safe operation: for almost all industrial equipment, electric vehicles and power grid management solutions, the safety of advanced energy storage systems is critical. Legacy lead-
Acid batteries get hot during heavy operations, and the toxicity of these legacy chemicals can be cumbersome if the batteries are damaged.
Advanced energy storage systems focus on chemicals that do not react violently with oxygen, so that cell rupture is unlikely to cause an explosion or fire.
As we all know, lithium iron phosphate has become a \"lithium chemical choice\" for many large applications due to its lower cost and higher safety attributes \".
Extended life: the cycle life of the advanced energy storage system is the total number of times the system can charge and discharge while still running according to specifications in the installed equipment. Legacy lead-
In industrial equipment applications, acid technology generally does not meet the specifications of 500 cycles, especially for smaller forklifts.
In contrast, advanced energy storage systems can last 3 to 5 times in the same application.
Volume and weight: the weight and size of the advanced energy storage system are critical for portable power and power grid management equipment.
In the valuable electric vehicles in the packaging space, the lightweight system can greatly improve the endurance.
In the grid management device that seeks to extend the current backwards-
Better volume and transfer of load or peak equipment can extend the power supply time
The small advanced energy storage system can keep the connection between batteries to a minimum, thus increasing the average energy cost.
Lowest cost: advanced energy storage systems provide power-intensive solutions with extended cycle life, which is in the industrial vehicle equipment, portable power supply, grid management segment.
We believe that in our products, advanced energy storage systems are much cheaper than traditional leading products.
Acid technology in product life cycle.
Our products and services we seek to gain market share in the advanced field of energy storage, the current focus is to enhance the equipment, use our system technology to extend the life, increase the much needed security mechanism, and memory tools for cycle life.
We focus on unit and system management tools.
From our modular 24-volt to 72-
Volt energy storage solutions can be stacked and charged, and we provide building blocks to create custom systems for a wide range of applications.
We offer systems that meet cost and performance goals, and in many cases we believe they are based on the life cycle data of potential customers
Acid batteries provided by manufacturers;
Traditional leading edge
Acid technology on these two indicators.
Our system uses lithium.
Ion batteries with more energy than conventional lead
Acid batteries, so that our batteries keep more charge at the same weight.
In addition, our BMS protects lithium
Lithium ion battery
Ion batteries to achieve their full life cycle potential and lasting lead-
Acid-based batteries that must be replaced, resulting in additional costs over the same period of time.
Our system manages individual batteries and their charging cycles, which often allows for more consistent discharge capability and ease of maintenance on unmanaged batteries.
Through our BMS, we have fully enhanced the battery system to manage the market for power, marine, industrial, military, fixed, grid. BMS .
Our proprietary BMS products provide three key features for the battery system: battery balance, monitoring parameters, and reporting errors to the system.
Our BMS monitors parameters and reports errors to other devices that can then determine the best measures to prevent failure.
Another BMS function is system cell balance.
BMS will analyze each battery in the system during charging and discharging to determine which batteries are balanced to prevent overcharging and allow other batteries to be captured
Increase and balance capacity throughout the system.
Battery module. We supply high-power, energy-
Intensive advanced energy storage modules for industrial equipment, electric vehicles and government applications.
Our entry-level walkie talkie tray Jack Pack is powered by 24-
Volt lithium battery pack and individual 3. 2 volt cells.
Our scalable design includes 36-volt, 48-volt, and 72-
Complete product line for volt applications of all sizes-up.
We offer different chemistry and configurations depending on the application.
Our battery modules are designed for our BMS.
We\'re using lithium right now.
Lithium-ion batteries, especially lithium-ion batteries.
We are not engaged in the business of developing new battery chemicals, so we are \"agnostic\" about chemicals and can use new chemicals in the market. 8 Chargers.
Our smart charging solution is designed to dock with our battery management system. We offer 24-
Volt onboard chargers for our class 3 products and smart \"wall mounted\" chargers for large applications.
Application integration.
We are one of the few developers who have successfully integrated lithium battery packs into various applications such as forklifts and related industrial equipment.
The technical complexity of lithium requires engineering and testing with knowledge.
Marketing and Sales Customer focus we currently sell products directly to customers through original equipment manufacturers, elevator equipment dealers, battery distributors and final terminalsuser.
From small companies to Fortune 500 companies, our direct customers are different.
During the year ended June 30, 2018, we had two major clients, each accounting for more than 10% of our personal income, about $3,181,000, or 77% of our total revenue.
During the year ended June 30, 2017, we had three major clients, each accounting for more than 10% of our personal income, about $524,000, or 58% of our total revenue.
We believe that our battery management and communication tools communicate individual battery conditions with auxiliary devices, extend battery system life and improve system performance by managing individual batteries in the system, and communicate individual unit conditions to other devices that need or supply power.
Whether it\'s elevator equipment or related industrial equipment, we offer systems that meet cost and performance goals, and in many cases we believe they are based on life cycle data for leading products
Acid batteries provided by manufacturers;
Traditional leading edge
Acid technology on these two indicators.
Our system uses lithium.
Ion batteries with more energy than conventional lead
Acid batteries, so that our batteries keep more charge at the same weight.
In addition, our BMS protects lithium
Lithium ion battery
Ion batteries to achieve their full life cycle potential and lasting lead-
Acid-based batteries that must be replaced, resulting in additional costs over the same period of time.
Our system manages individual batteries and their charging cycles, which often allows for more consistent discharge capability and ease of maintenance on unmanaged batteries:☐Manage a single battery within the system to maximize: ● life cycle ● discharge rate ● discharge depth per cycle☐Allow the battery to communicate its health status to: ● Ensure proper charging ● Protect the battery from excessive discharge ● adjust the system parameters at different temperatures☐Enable other system components to adjust their functions to: ● protect equipment from damage ● optimize charging efficiency☐Other benefits of our battery pack: ● lower total cost of ownership ● maintenance free ● lighter weight ● longer life than lead-
In addition to the charger components and batteries, we design and assemble all our own products in the lead-acid battery production process --
Outsource manufacturing if possible. Batteries.
Because our battery management system and battery modules have nothing to do with any specific lithium
Ion battery chemistry, we can get batteries from various manufacturers to meet our needs and the needs of our customers.
Over the past year, we have purchased our batteries from several suppliers, all of which have manufacturing operations in China and some have wholesale warehouses in the US.
9 battery modules and battery packs.
We designed all the battery modules and battery packs. house.
In addition, we occasionally design and assemble prototype battery packs and storage systems for our customers. Chargers.
We currently buy chargers from several channels, all of which are from the US. S.
Based on the supplier. BMS.
We have designed the BMS module/board and have obtained two authorized patents.
We supply plate manufacturing for two local houses.
We are currently making further technical improvements to this BMS technology, including the use of more efficient circuit board components, and are planning to submit relevant patents. In-
House product assembly: BMS unit, charger and CAN Current Sensor: unit is outsourced, programmed and tested in our factory before shipment.
Battery Module: we receive full module housing and cover for 24-volt, 36-volt, 48-volt, and 72-volt.
The unit is encapsulated in the module chassis, connected to the BMS and fixed in place.
The lid with BMS installed is programmed and calibrated.
Each complete unit is sealed and tested before shipping.
Bulk sales will reduce costs by: manufacturing optimization: We are currently building robust, comprehensive products
Meet as much as possible the initial requirements that usually reflect smaller quantities of demand.
By investing in equipment and processes, manual assembly and processes can reduce costs.
Low cost design: when we receive more feedback from our customers, we will strive to reduce the cost and improve the consistency of packaging functions and quality at a lower cost to meet customer satisfaction.
Advanced manufacturing capability: We are currently looking for advanced manufacturing relationships to further enhance our capabilities.
Supplier we get a limited number of components and supplies from a small group of suppliers.
During the year ended June 30, 2018, we had three suppliers who accounted for more than 10% of our total individual purchases.
The total purchases of these three suppliers amounted to $2,285,000, accounting for 50% of our total purchases.
During the year ended June 30, 2017, we had three suppliers who accounted for more than 10% of our total individual purchases.
The total purchases of these three suppliers amounted to $1,665,000, accounting for 57% of our total purchases.
In the past, we purchased lithium batteries from many suppliers.
We constantly evaluate our battery purchases to improve consistency, responsiveness and quality.
Research and development cost of accounting annual end June 30, 2018 2017 about for $1,956,000 and $1,052,000.
These expenses mainly include materials, supplies, wages and personnel-related expenses, inventory
Compensation fees, consultation fees and other fees.
R & D costs for the fiscal year ended June 30, 2018 (fiscal 2018) are higher than for the fiscal year ended June 30, 2017 (fiscal 2017 \") mainly due to the development and implementation of packaging with higher capacity of class 1, 2 and 3 forklift trucks.
As we continue to develop our product line, we expect that R & D costs will continue to be a major part of our focus.
We are currently doing research and development at our factory in Vista, California.
We seek to develop innovative new products and improved products for battery and system management and related communication, display, current sensing and charging tools.
Our competitors in the elevator equipment industry are mainly lead-acid battery manufacturers, including but not limited to: GNB, Hawker, Deka, Enersys, Crown battery, Douglas and interstate
We do not know that these suppliers currently offer lithium-
Basic products for any large number of elevator equipment facing end users, equipment dealers, OEMs or battery distributors.
In addition, several original equipment manufacturers only use their own forklifts to provide lithium batteries for sale on class 3 forklifts.
There are more and more lithium battery pack suppliers entering the market, and the sales volume is very small. most of them are adding lithium battery products to existing power products.
These competitors entering the market are usually not in contact with major battery companies or OEM elevator equipment manufacturers.
Over time, we expect more entrants to the lithium market, especially major battery companies.
Considering more
We believe that more people entering the lithium market show their advantages compared to lead acid.
We believe that we have a number of technical and business advantages compared to our competitors, which will make us successful in the advanced energy storage market.
Our focus on unit and system management tools allows us to compete with much lower capital structures.
In addition, since our BMS is not based on any specific cellular chemistry, we can get cells from different manufacturers based on performance requirements and costs.
Compared to our current competitors, the flexibility of this unit purchase allows us to provide a complete storage system at a lower cost.
The ability to successfully integrate the battery pack into a variety of applications also sets us apart.
Our UL list was obtained in January 2016 and is also the first such certification for forklift applications, demonstrating the quality, safety and reliability of the elevator packaging line we offer to our customers, dealers and OEM partners
We believe that as a market leader in quality and experience, we have stood out from this effort.
Our marketing and sales strategy is to actively explore the following segments: elevator equipment-
Material handling equipment: the advantage of the elevator equipment market is that it is an indispensable equipment in manufacturing and warehousing operations.
Elevator equipment vehicles are not new technologies and new tests are not required, which may result in delays in product placement.
Existing elevator equipment market
Acid batteries, which are outdated technologies, can cause customers to be dissatisfied with the life cycle, performance and additional maintenance costs.
Replacement lead-
Acid batteries with lithium batteries greatly extend the life of the battery system, reducing the overall cost of ownership to the level of competition with lead
Acid is used in many applications.
We believe that through marketing efforts, we will be able to enter a larger target market.
Ground Support Equipment: Remote information processing, modular, long life and low for our products
The cost solution is suitable for airport equipment solutions for all airlines transporting luggage and related goods, often referred to as ground support equipment.
These applications are perfect for our modular and scalable packaging design and benefit from the packaging innovations we have gained from elevator packaging and related harsh environments.
We have carried out successful pilot projects and are planning to continue to roll out these packages to various customers, with huge revenue opportunities expected in the coming year.
Military (defense) and municipal: our products are long-lived and easy to integrate and are suitable for energy storage applications in military and municipal markets.
Although these markets have been integrated for a long time, we believe that they may have a significant impact on our earnings for some time to come.
Our success depends, at least to a certain extent, on our ability to protect core technologies and intellectual property rights.
To do this, we rely on a combination of patent applications, trade secrets (including intellectual property)
How employees and third-party NDA, copyright laws, trademarks, intellectual property licenses and other contractual rights establish and protect our ownership in technology.
In addition to innovation, technical expertise and experienced personnel, we believe that a strong patent position is also important to remain competitive.
As of June 30, 2018, we have issued a patent and three trademark registrations to protect the Flux Power name and logo.
We intend to make more patent applications on our technology and seek international intellectual property protection in a wide range of areas.
We do not know whether any of our efforts will result in the issuance of patents or whether the review process will require us to narrow our claims.
Even if approved, there is no guarantee that these pending patent applications will provide us with protection.
Government regulations on product safety regulations.
Our products are subject to the product safety regulations of federal, state and local organizations.
Therefore, we may need, or may voluntarily decide to obtain approval of our products from one or more organizations engaged in the regulation of product safety.
These approvals may require a significant amount of time and resources from our technicians and, if redesign is required, may lead to delays in the launch of our products in various markets and applications.
11 environmental regulations.
Federal, state and local regulations put forward significant environmental requirements for the manufacture, storage, transportation and disposal of various components of advanced energy storage systems.
Although we believe that our business is materially compliant with the current applicable environmental regulations, there is no guarantee that changes in these laws and regulations will not bring us expensive compliance requirements, nor will we be held accountable for the future.
In addition, federal, state and local governments can enact additional regulations related to the manufacture, storage, transportation and disposal of advanced energy storage system components.
Compliance with these additional regulations may require us to invest a lot of time and resources and may adversely affect our product needs.
There is no guarantee that additional or modified regulations will not be implemented for the manufacture, storage, transportation and disposal of advanced energy system components.
Occupational safety and health regulations.
The California Occupational Safety and Health Department (\"Cal/OSHA\") and other regulators have jurisdiction over the operation of our California Vista facility.
Since assembling advanced energy storage systems often poses risks, we expect strict implementation of applicable health and safety regulations.
Frequent audits or changes to regulations issued by Cal/OSHA or other regulatory bodies with jurisdiction over our business may result in unforeseen delays and require a significant amount of time and resources from our technicians
We have 50 employees as of June 30, 2018Full three (53)time employees.
From time to time, we employ external consultants for business development and operations or other functions.
None of our employees currently have union representation.
Our Internet address is www. fluxpwr. com.
We provide free annual report on Form 10 on our website
Quarterly Report on table 10
Q: Current Report of Form 8
K, and amendments to reports submitted or provided under section 13th (a) or 15 (d) of the Transaction Act, after we file these materials electronically, or to the Securities and Exchange Commission (\"SEC \").
In addition to the information clearly stated in this annual report, the information contained or mentioned on our website is not part of this annual report.
The public can also read and copy any of our submissions to the SEC in the public information room at 100 F Street, NE 20549, DC.
The public can get information about the operation of the public data room by calling SEC 1-1800-SEC-0330.
The SEC also maintains a website on www. sec.
Gov containing reports, agency and information statements, as well as other information related to the issuer (such as US), which is submitted electronically to SEC.
Our main executive office is located at 985 Pinghong Avenue, Suite A, Vista 92081, CA.
The telephone number of our main executive office is (760) 741-3589 (FLUX). ITEM 1A -
Risk factors involve a high degree of risk in the investment of our common stock.
Before making an investment decision, you should carefully consider the risks described below and all other information contained in this report.
If any of the following risks actually occur, our business, financial position or operational results may be affected.
In this case, the transaction price of our common stock may drop and you may lose all or part of your investment.
You should read the section above entitled \"Special Notes on forward-looking statements\" to discuss which types of statements are forward-looking --
In the context of this report, the importance of these statements.
Risk factors related to our business our independent auditors have expressed great doubt about our ability as an ongoing business.
In their audit opinion on our financial statements as of June 30, 2018 and June 30, 2017, our independent CPA firm included an explanatory paragraph on ongoing operations, which states that, we have great questions about our ability to operate continuously.
We have prepared financial statements on the basis of continuous operation, considering the realization of assets and the liquidation of liabilities in the foreseeable future.
Our financial statements do not include any necessary adjustments, and if we cannot proceed as an ongoing business, we are therefore required to liquidate our assets, and pay off our liabilities with amounts different from those reflected in our financial statements outside the normal business process.
If we cannot continue to operate, our shareholders may lose all or most or all of their investments.
We have a history of loss and negative working capital and at present our lenders have the right not to advance funds under our credit facility and we will need additional funds to support operations and provide working capital.
As of June 30, 2018, we had a cash balance of $2,706,000 and a cumulative deficit of $26,662,000.
We have a history of losing money, and we have experienced a shortage of revenue due to the timing of the launch of the revised business strategy.
Despite the $3,216,000 or 357% increase in our income, our net loss of $6,965,000 increased by $2,530,000 or 57% compared to the end of June 30, 2017 this year.
Based on our current and planned expenditure levels, we estimate that within 12 months from the date of submission of the 10-year report of this form, approximately $7,800,000 in total financing proceeds will be required to fund current and planned operations
K, September 26, 2018
The company does not currently see its existing cash resources as sufficient to meet the expected demand for the next 12 months.
Our business is mainly to obtain funds by selling our Securities and borrowing under credit services.
Our ongoing operations and growth depend on our ability to complete equity financing, borrow under our credit facility and/or generate positive cash flow from our operating activities.
We launched private placement in March 2018 and May 2018, raising $4,000,000.
As at June 28, 2018, a total of $4,000,000 had been raised, of which $3,700,000 had been received in cash as at June 30, 2018 and the remaining $300,000 had been received in July 2, 2018.
In addition, in fiscal 2018, we borrowed $2,790,000 under Esenjay\'s existing affiliate credit mechanism.
Esenjay\'s maximum loan amount for credit loans is $10,000,000, which expires on January 31, 2019 and can be exchanged for $0.
Common Stock is £ 60 per share and interest is £ 8% (\"unlimited credit line \").
According to the attached letter, Esenjay agrees to limit its conversion rights under unrestricted credit lines to such a number of shares so that, at the time of conversion (if any ), will not result in the company exceeding the authorized quantity of its common stock.
As of June 30, 2018, in the case of Esenjay\'s prior approval, a future draw would be available for $2,025,000.
In addition, on March 20, 2018, Flux Power signed a credit financing agreement with Esenjay with a maximum loan amount of $5,000,000.
The proceeds from this May 20, 2018 credit financing will be used to purchase inventory and related operating expenses, and interest rates will be calculated at a rate of 15% per year, and will expire on March 31, 2019 (\"inventory credit line \").
The total investment of $2,405,000 is borrowed, and the outstanding balance of $2,405,000 $2,595,000 due to Esenjay\'s inventory credit from December 5, 2017 can be approved in advance for future use of Esenjay.
We are looking for additional sources of funding, including another private or additional debt fund.
We expect to pay our expected operating expenses by cash on hand, collection of additional customer bills, borrowing under our credit line, and proceeds from private equity securities.
However, if required, we cannot guarantee that additional funds will be available in the future, or that the funds will be provided on terms that we can accept, or that shareholders will not experience dilution because of the funds raised through the sale of securities.
Without these funds, management will be required to cut investments in additional sales and marketing as well as product development resources and capital expenditures, this may have a significant adverse effect on our future cash flow and operational results and our ability to continue to operate as an ongoing business.
Our debt levels and default events under our existing credit mechanism may adversely affect our business, financial position, operating results or liquidity.
We have huge debts and rely on our credit facility to provide working capital.
As of September 26, 2018, we had an outstanding balance of $7,975,000 under Esenjay\'s existing unlimited credit line and $2,025,000 available for future withdrawals.
In addition, we have an outstanding balance of $2,405,000 under Esenjay\'s existing inventory credit line, and another $2,595,000 for future withdrawal.
However, our ability to borrow under both facilities is at Esenjay\'s discretion.
In addition, Esenjay has no obligation to pay for these funds and is also entitled not to advance funds under the credit line.
In addition, as collateral, once a breach of contract, Esenjay will be entitled to collateral granted to them under the credit line, and we may lose ownership of these assets.
The loss of our collateral will have a significant adverse effect on our operations, business and financial position.
We have adjusted our marketing focus to a smaller number of products and sold to customers who do not need extensive product development.
Since 2010, we have been focusing on providing customized solutions for large OEM customers.
Recent experience has shown that we can achieve higher and shorter
Focus on a smaller number of products and sell to customers who don\'t need a lot of and lengthy product development and negotiation time to get long-term revenue.
In response, we are determined to narrow our focus to product areas including \"elevator equipment\" and related vertical industries.
We believe that we are prepared to respond to these markets, including the application of industrial electric vehicles such as elevator equipment and airport ground support equipment, we cannot guarantee that we will successfully transition from traditional leads to companies in these areas.
Acid technology in our advanced energy storage solutions.
Our success depends on the success of the manufacturer of the final application using our battery products and BMS.
Because our products are designed for other products such as elevator equipment, our success depends on whether the final application manufacturer and its final distributor will incorporate our battery products and BMS into their products.
Although we strive to produce high quality battery products and BMS, the final application manufacturer will not accept our products.
Our failure to obtain recognition of our products from these manufacturers may have a significant adverse impact on our operational results.
In addition, even if the manufacturer or its equipment dealer decides to use our batteries, the manufacturer may not be able to successfully sell its products.
The manufacturer is unable to successfully market and sell its products and may have a significant adverse impact on our business and prospects as the manufacturer may not order new products from us.
As a result, our business, financial position, results of operations and future success will be significantly adversely affected. Lithium-
Ion battery modules on the market were observed to catch fire or to spray smoke and flames, an event that caused people to use large format high-Power battery.
We sell and supply large format
Power lithium-based battery modules for industrial equipment, we intend to provide these lithium battery packs for industrial applications.
Historically, lithium
Ion batteries in laptops and mobile phones are reported to be on fire or spewing smoke and flames, and there has been recent news that several electric vehicles using high powerpower lithium-
The ion battery caught fire, causing an investigation into the cause of the fire.
Therefore, any negative publicity issues, the use
Power batteries in automotive or elevator equipment applications will affect our business and prospects as we sell and supply large high
Power lithium battery pack for industrial applications.
In addition, any failure of our battery module can result in damage to industrial equipment or personal injury and may cause us to be sued.
We may have to recall our battery modules which are time consuming and expensive.
The current economic situation may adversely affect consumer spending and the overall health of retail customers, which in turn may adversely affect our financial position, operating results and cash resources.
Uncertainty about the current and future state of the global economy may cause our customers to delay the purchase or cancellation of purchase orders for our products in response to the credit crunch, reduced cash supply and weakening consumer confidence.
Our financial success is sensitive to changes in the overall global and national economic situation.
The recession, rising lending rates, rising fuel and other energy costs, inflation, rising commodity prices, rising unemployment and rising consumer debt levels, higher tax rates and other changes in tax laws or other economic factors that may affect consumer spending or buying habits may continue to adversely affect the demand for our products.
In addition, some of our customers may be affected by a significant reduction in available credit due to the current financial crisis.
If credit pressure or other financial difficulties lead to the bankruptcy of our customers, this may adversely affect our financial results.
There is no guarantee that the government and consumer response to the disruption of financial markets will restore consumer confidence.
Our batteries depend on a limited number of suppliers who cannot continue to deliver or refuse to deliver, the price and volume of batteries we can accept can have a significant adverse effect on our business, prospects and operational results.
Our batteries are an integral part of our battery products and systems and are currently from a manufacturer that is located in China and has distribution in the United States.
While we get components of products and systems from as many sources as possible, we spend a lot of time developing and testing the batteries we get from that manufacturer.
We refer to the battery supplier as our limited supplier.
To date, we do not have a qualified alternative source of batteries, although we are constantly researching and evaluating batteries from other suppliers.
We don\'t usually last long.
Long term agreement with our limited suppliers.
While we are confident that we will be able to build additional supplier relationships for our batteries, we may not be able to do so in the short term or at any price, quality or cost in our favor.
Changes in business conditions, wars, changes in government and other factors beyond our control or beyond our current expectations may also affect our supplier\'s ability to deliver components to us in a timely manner.
In addition, if our demand increases significantly, or if an existing supplier needs to be replaced, there is no guarantee that additional component supplies will be provided on the terms that are in our favor when required, or any supplier will allocate enough supplies to US to meet our requirements or fill in the order in a timely manner.
In the past, due to the failure of certain suppliers to provide components that meet our quality control standards, we have replaced these suppliers.
Loss of any limited source supplier or disruption of component supply from these suppliers may result in delayed delivery of our battery products and systems to our customers, which may compromise our relationship with our customers, it will also have a significant adverse impact on our business, prospects and operational results.
Increased costs, disruption of supply or shortage of raw materials, especially lithium-
Phosphate batteries can damage our business.
We may experience an increase in cost or a continuous interruption in the supply or shortage of raw materials.
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