Flux Power Holdings (NASDAQ: FLUX) stock jumped 57.40% on Friday to close at $0.64 after the company’s board unanimously rejected an unsolicited, non-binding acquisition proposal from Solidion Technology (NASDAQ: STI), saying the offer substantially undervalued Flux Power and was not in shareholders’ best interests.
Solidion, however, had told shareholders that its proposed all-cash price would likely be below Flux’s September 28 closing price of about $0.46. The company did not publicly disclose an exact offer price when it announced the proposal on September 30, leaving the precise discount impossible to calculate.
Flux Power said the board’s rejection followed a review of the proposal with legal advisers.
The sharp gain was accompanied by unusually heavy trading, with about 164.9 million shares changing hands during the regular session, compared with an average daily volume of roughly 415,000 to 420,000 shares.
Solidion Tied Its Below-Market Price to Flux’s Financing Needs
Solidion argued that the proposed price should be considered against the dilution it expects Flux shareholders could face from additional equity financing.
That argument is tied to a financing requirement Flux disclosed before Solidion publicly announced the takeover proposal. Under a September 17 amendment to its loan agreement with Gibraltar Business Capital, Flux must complete an equity sale generating at least $4 million in net proceeds within 50 days. Flux also remained in default under the credit agreement despite the amendment.
Gibraltar has continued to provide Flux access to its revolving credit facility. However, while the default remains outstanding, the lender retains the right to discontinue that access, terminate its commitments, and declare amounts owed immediately due.
Solidion cited that capital requirement in its pitch to shareholders. The company said the financing could significantly dilute existing shareholders. It also said its proposed cash price, while likely below Flux’s September 28 close, would be above the share price it anticipates after a discounted equity financing. That comparison represents Solidion’s assessment; Flux has not endorsed it.
The financing pressure comes after Flux ended fiscal 2026 with $300,000 in cash. Revenue fell to $42.1 million from $66.4 million a year earlier, while the company posted a $7.4 million net loss and used $5.9 million of cash in operating activities. Its annual filing said conditions, including recurring losses and limited liquidity, raised substantial doubt about its ability to continue as a going concern.
Flux Points to Cost Cuts and New Business as It Rejects the Valuation
Flux based its rejection on a different view of the company’s prospects, pointing to operational changes under its current management team.
The company said fiscal fourth-quarter operating expenses declined about 33% year over year and cited lower product and operating costs, supply-chain improvements, and expanded relationships with original equipment manufacturers. Flux also highlighted certification with a new major OEM, the launch of its AI-driven SkyEMS 3.0 platform, and its entry into robotics through a collaboration with a large global technology company.
Flux said its board is also evaluating financing alternatives and strategic partnerships intended to give the company enough financial flexibility to continue executing its operating strategy.
For now, Flux and Solidion remain divided over both the takeover proposal and how Flux’s financing needs should affect its valuation. Flux’s rejection announcement did not mention any revised proposal from Solidion.
