Flux Power Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

FAIR VALUE MEASUREMENTS (Tables)

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Jun. 30, 2013

Following is a summary as of the reporting date of the fair values and applicable level within the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

At June 30, 2013:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Description:
Warrant derivative liabilities	$	-	$	-	$	143,000

At June 30, 2012:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Description:
Warrant derivative liabilities	$	-	$	-	$	4,943,000

The table below sets forth a summary of changes in the fair value of our Level 3 financial instruments for the twelve months ended June 30, 2013:

	Balance at June 30, 2012		Estimated fair value of new derivative liabilities		Change in estimated fair value recognized in results of operations		Balance at June 30, 2013

Warrant derivative liabilities	$	4,943,000	$	931,000	$	(5,731,000)	$	143,000

Summary of valuation techniques used to measure the fair value of financial instruments

The following table represents the Plan’s level 3 financial instruments at June 30, 2013, the valuation techniques used to measure the fair value of those financial instruments, and the significant unobservable inputs and the ranges of values for those inputs:

Instrument	Fair Value		Principal Valuation Technique	Significant Unobservable Inputs	Range of Significant Input Values

Warrant derivative liabilities	$	143,000	Monte Carlo simulation	Volatility	100%

				Risk free rates	1.02% - 1.16%

				Probability of subsequent financing	100%

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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