Flux Power Faces Investor Lawsuit Over Financial Misstatements
New York, Saturday, 16 November 2024.
Investors in Flux Power Holdings, Inc. are urged to seek legal counsel before a December 31, 2024 deadline in a class action lawsuit. The suit alleges the company overstated financial figures and misrepresented internal controls, leading to significant stock price drops following disclosures of accounting errors.
Background of the Lawsuit
Flux Power Holdings, Inc. (NASDAQ: FLUX) finds itself embroiled in legal turmoil as multiple law firms, including Rosen Law Firm and Glancy Prongay & Murray LLP, have filed a class action lawsuit against the company. The suit covers the period from November 11, 2022, to September 30, 2024, alleging that the company made materially false statements about its financial status. These alleged inaccuracies include overstated inventory, gross profit, current assets, and total assets, while understating cost of sales and net loss[1][2].
Significant Financial Disclosures
On September 5, 2024, Flux Power disclosed significant errors in its financial statements, citing improper inventory accounting as the cause. This revelation led to a notable drop in its stock price, with shares falling by $0.17 (5.4%) to $3.00 on September 6, 2024. Further, the company announced on September 30, 2024, that it could not file its Annual Report for the fiscal year ending June 30, 2024, on time, resulting in another price decline of $0.18 (5.9%) to $2.86 on October 1, 2024[3][4].
Implications for Investors
The lawsuit represents a critical juncture for investors who purchased Flux Power securities during the mentioned class period. They are urged to seek legal counsel to explore compensation opportunities through a contingency fee arrangement, meaning no out-of-pocket costs for plaintiffs. The deadline to file a motion for lead plaintiff is December 31, 2024, a crucial step for those looking to actively participate in the litigation process[1][5].
Potential Outcomes and Next Steps
The lawsuit’s allegations of misleading financial practices have serious implications for Flux Power’s reputation and stock market standing. If successfully proven, these claims could result in significant financial restitution to affected investors and necessitate a comprehensive restatement of the company’s financials. Investors are encouraged to stay informed and consider their legal options as the December 31 deadline approaches[2][6].
Sources
- www.globenewswire.com
- www.businesswire.com
- www.businesswire.com
- www.prnewswire.com
- www.globenewswire.com