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)

6 Months Ended

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Warrant Activity and Related Balances Outstanding

Warrant activity during the six months ended December 31, 2013, and related balances outstanding as of such dates are reflected below:

			Weighted
			Average		Remaining
			Exercise		Contract
			Price Per		Term (#
	Number		Share		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 December 31, 2013		2,907,347	$	0.41		3.46 - 3.84

Warrant activity during the six months ended December 31, 2012, and related balances outstanding as of such dates are reflected below:

			Weighted
			Average		Remaining
			Exercise		Contract
			Price Per		Term (#
	Number		Share		years)
Shares purchasable under outstanding warrants at June 30, 2012		2,400,328	$	0.41
Stock purchase warrants issued		507,019
Stock purchase warrants exercised
Shares purchasable under outstanding warrants at December 31, 2012		2,907,347	$	0.41		4.49

Stock Options Activity

Activity in stock options during the six months ended December 31, 2013, and related balances outstanding as of that date are reflected below:

					Weighted
			Weighted		Average
			Average		Remaining
	Number of			Exercise Price	Contract
	Shares		per share		Term (# years)
Outstanding at June 30, 2013		2,527,389	$	0.15		5.85
Granted		3,010,973		0.10
Exercised
Forfeited and cancelled		(460,001)		0.04
Outstanding at December 31, 2013		5,078,361	$	0.14		8.69
Exercisable at December 31, 2013		3,357,982	$	0.20		8.31

Activity in stock options during the six months ended December 31, 2012, and related balances outstanding as of that date are reflected below:

					Weighted
			Weighted		Average
			Average		Remaining
	Number of		Exercise Price		Contract
	Shares		per share		Term (# years)
Outstanding at June 30, 2012		4,536,949	$	0.17		7.61
Granted
Exercised		(100,000)		0.04
Forfeited and cancelled		(1,021,896)		0.30
Outstanding at December 31, 2012		3,415,053	$	0.13		6.26
Exercisable at December 31, 2012		2,333,219	$	0.19		5.18

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:

	For the Three Months Ended				For the Six Months Ended
	December 31,		December 31,		December 31,		December 31,
	2013		2012		2013		2012
Research and development	$	4,000	$	4,000	$	3,000	$	8,000
General and administration		33,000		(10,000)		57,000		30,000
Total stock-based compensation expense	$	37,000	$	(6,000)	$	60,000	$	38,000

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:

Six months ended December 31,	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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