Quarterly report pursuant to Section 13 or 15(d)

SUBSEQUENT EVENTS

v3.22.2.2
SUBSEQUENT EVENTS
3 Months Ended
Sep. 30, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 9 - SUBSEQUENT EVENTS

 

Amendment to Revolving Credit Facility with Silicon Valley Bank

 

On November 7, 2022, we entered into a Third Amendment to Loan and Security Agreement (“Third Amendment”) with Silicon Valley Bank (“SVB”), which amended certain terms of the Loan and Security Agreement dated November 9, 2020, as amended on October 29, 2021, and as further amended on June 23, 2022 (together with the Third Amendment, the “Agreement”), including but not limited to, (i) extending the maturity date from November 7, 2022 to May 7, 2023 (the “Extension Period”), (ii) amending the financial covenants of the Company to cover the Extension Period, and (iii) amending the definition of Permitted Liens (as defined in the Third Amendment). Pursuant to the Third Amendment, the Company paid SVB a non-refundable amendment fee of $12,500 and SVB’s legal fees and expenses incurred in connection with the Third Amendment.

 

We have used the SVB Credit Facility from-time-to-time. As of September 30, 2022, the outstanding balance of the revolving line of credit was approximately $5.7 million, with approximately $2.3 million of the SVB Credit Facility remained available for future draws through May 7, 2023, unless the credit facility is renewed and its term is extended prior to its expiration.

 

2022 Bonus Payout

 

On October 31, 2022, the Compensation Committee and the Board approved the following cash bonuses to the following executive officers, whereby the final cash bonus payout was determined based on a payout percentage of the executive’s previous target cash bonus for fiscal year 2022:

 

Name   Position   Target Cash Bonus     Payout Percentage     Cash Bonus Payout  
Ronald F. Dutt   Chief Executive Officer   $ 137,500       40 %   $ 55,055.00  
Charles Scheiwe   Chief Financial Officer   $ 71,820       40 %   $ 28,756.73  

 

2023 Bonus Plan

 

On October 31, 2022, the Compensation Committee also approved the bonus pool and performance criteria for the Annual Bonus Plan for the fiscal year 2023 (the “2023 Bonus”). For the Company’s fiscal year 2023, the performance goals applicable to a bonus are based on the Company achieving certain targets based on the Company’s annual revenue, Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, and stock-based compensation), functional goals (the “Financial Targets”), in addition to individual performance objectives and additional bonus amounts if the Company’s financial results exceeds certain thresholds of the Financial Targets.

 

The Compensation Committee approved the target cash bonuses under the 2023 Bonus based on the base salary for fiscal year 2023 for the following executive officers:

 

Name   Position   Base Salary     Bonus Percentage of Base Salary     Total Target Payout     Maximum Payout(1)  
Ronald F. Dutt   Chief Executive Officer   $ 300,000 (2)     75 %   $ 225,000     $ 270,000  
Charles Scheiwe   Chief Financial Officer   $ 205,200       35 %   $ 71,820     $ 86,184  

 

(1) Subject to a bonus cap for achieving above set revenue target and a payout cap for achieving 10% positive Adjusted EBITDA.

 

(2) To be effective during the second fiscal quarter of 2023.

 

Stock Option Grant

 

On October 31, 2022 (the “Grant Date”), the Compensation Committee approved the grant of incentive stock options (the “Options”) under the Company’s 2014 Equity Incentive Plan (the “2014 Plan”) and the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) to certain employees of the Company or its subsidiary, Flux Power, Inc. The Options are subject to the terms and conditions provided in the form of Incentive Stock Option Agreement under the 2014 Plan (the “2014 Option Agreement”) or the form of Incentive Stock Option Agreement under the 2021 Plan (the “2021 Option Agreement”). The Options have an exercise price of $3.43, which is based on the Company’s 10-day volume weighted average price on the Grant Date, and will expire ten (10) years from the Grant Date.

 

The following executive officers of the Company were granted Options under the 2021 Plan in such number and vesting schedule set forth as follows:

 

Name   Position   Options*   Vesting Schedule
Ronald F. Dutt   Chief Executive Officer   80,175   Four (4) equal annual installments commencing one year after the Grant Date
Charles Scheiwe   Chief Financial Officer   41,878   Four (4) equal annual installments commencing one year after the Grant Date

 

* Subject to $100,000 ISO limitation under the 2021 Plan