Flux Power Reaches Settlement Agreement in Shareholder Derivative Action
Flux Power Holdings provided the following notice of an Order from the United States District Court for the Southern District of California related to the proposed settlement of derivative action: "You are hereby notified, pursuant to the December 8, 2025 Preliminary Approval Order entered in the above-captioned shareholder derivative action, that a Stipulation and Agreement of Settlement dated August 12, 2025 has been entered to resolve the shareholder derivative claims pending on behalf of nominal defendant Flux Power in the United States District Court for the Southern District of California. The Action arises from allegations that the Individual Defendants breached their fiduciary duties as officers and directors of Flux Power by making false and/or misleading statements and/or failing to disclose that: (i) Flux Power's financial statements from November 10, 2022 to the filing of the Complaint included, among other things, overstated inventory, gross profit, current assets, and total assets; (ii) Flux Power understated its cost of sales and net loss; (iii) as a result, Flux Power would need to restate its previously filed financial statements from November 10, 2022 to the filing of the Complaint; (iv) Flux Power understated its internal control weaknesses and/or stated that it had adequate internal controls when it did not; and (v) as a result, the Individual Defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis. As a result of this alleged wrongdoing, the Action alleges the Company suffered damage. In connection with, and conditioned upon, the Settlement, Flux Power has agreed to implement and/or maintain corporate governance reforms, as defined and set forth in the Stipulation. The Parties believe that the Settlement is fair, reasonable, and in the best interests of the Company and its stockholders"
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Flux Power Holdings, Inc. Class Action Settlement Proposal Approved for $1.75 Million
- Settlement Amount: The U.S. District Court for the Southern District of California has approved a proposed class action settlement for Flux Power Holdings, Inc. involving $1.75 million, aimed at compensating investors who purchased stock between November 15, 2021, and February 14, 2025, reflecting the court's commitment to investor rights.
- Hearing Schedule: A hearing is set for April 2, 2026, to evaluate the fairness and adequacy of the settlement proposal, which, if approved, will provide compensation to affected shareholders, thereby enhancing investor confidence in the market.
- Claim Submission: Affected shareholders must submit a claim by March 3, 2026, to share in the distribution of the Net Settlement Fund, emphasizing the importance of timely action, which may influence investor participation and the smooth execution of the settlement.
- Exclusion Requests: Investors wishing to opt-out of the settlement class must submit a request by March 12, 2026; those who do not will be bound by the settlement judgment, reminding investors to be vigilant about protecting their rights.
Plug Power Continues to Struggle with Margin Issues: Is a Turnaround Possible?
Plug Power's Financial Struggles: Plug Power Inc. continues to face significant margin challenges, with its gross margin worsening from negative 57.6% to negative 67.9% year-over-year, resulting in a gross loss of $120 million in Q3 2025.
Impairment Charges and Asset Write-Downs: The company incurred over $97 million in impairment charges due to project execution issues and customer disputes, leading to reductions in the value of various assets.
Long-Term Recovery Plans: Despite ongoing difficulties, Plug Power is focused on long-term recovery by reducing input costs, tightening spending, and expanding its electrolyzer capacity and hydrogen plant development.
Comparative Industry Performance: While Plug Power's shares have only gained 1.4% year-to-date, peers like Bloom Energy have seen significant gross profit increases, highlighting the competitive challenges Plug Power faces in the industry.
