Flux Power Holdings, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Warrant Activity and Related Balances Outstanding

Warrant activity during the three months ended September 30, 2013 and related balances outstanding as of such dates are reflected below:

	Number		Weighted Average Exercise Price Per Share		Remaining Contract Term (# years)
Shares purchasable under outstanding warrants at June 30, 2013		2,907,347	$	0.41
Stock purchase warrants issued
Stock purchase warrants exercised
Shares purchasable under outstanding warrants at September 30, 2013		2,907,347	$	0.41		3.71 - 4.09

Warrant activity during the three months ended September 30, 2012 and related balances outstanding as of such dates are reflected below:

	Number		Weighted Average Exercise Price Per Share		Remaining Contract Term (# years)
Shares purchasable under outstanding warrants at June 30, 2012		2,400,328	$	0.41
Stock purchase warrants issued		458,732
Stock purchase warrants exercised
Shares purchasable under outstanding warrants at September 30, 2012		2,859,060	$	0.41		4.74

Stock Option Activity

Activity in options during the three months ended September 30, 2013 and related balances outstanding as of that date are reflected below:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (# years)
Outstanding at June 30, 2013		2,527,389	$	0.15
Granted		3,010,973
Exercised
Forfeited and cancelled
Outstanding at September 30, 2013		5,538,362	$	0.12		8.23
Exercisable at September 30, 2013		3,635,462	$	0.19		7.49

Activity in options during the three months ended September 30, 2012 and related balances outstanding as of that date are reflected below:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (# years)
Outstanding at June 30, 2012		4,536,949	$	0.17
Granted
Exercised		(549,552)
Forfeited and cancelled		(1,460,009)
Outstanding at September 30, 2012		2,527,388	$	0.17		7.35
Exercisable at September 30, 2012		1,997,279	$	0.17		5.58

Employee Option Grants and Non-employee Option Grants

We allocated stock-based compensation expense included in the condensed consolidated statements of operations for employee option grants and non-employee option grants as follows:

Three months ended September 30,	2013		2012
Research and development	$	(1,000)	$	5,000
General and administration		24,000		40,000
Total stock-based compensation expense	$	23,000	$	45,000

Stock Options Valuation Assumptions

The Company uses the Black-Scholes valuation model to calculate the fair value of stock options. The fair value of stock options was measured at the grant date using the assumptions (annualized percentages) in the table below:

Three months ended September 30,	2013		2012
Expected volatility		218%		100%
Risk free interest rate		1.4% to 1.7%		0.8% to 3.0%
Forfeiture rate		13%		5%
Dividend yield		0%		0%
Expected term		3-5 years		5-10 years

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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