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

Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' DEFICIT (Tables)

STOCKHOLDERS' DEFICIT (Tables)

9 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

Warrant Activity and Related Balances Outstanding

During the nine months ended March 31, 2016 there were no warrants issued, exercised or cancelled. Information relating to warrants outstanding at March 31, 2016 is shown below:

			Weighted
			Average		Remaining
			Exercise Price		Contract
	Number		Per Share		Term (# years)
Shares purchasable under outstanding warrants at March 31, 2016		28,040,096	$	0.21		1.2-4.0

Stock Options Activity

Activity in stock options during the nine months ended March 31, 2016, 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, 2015		6,101,357	$	0.15
Granted		4,385,000	$	0.05
Exercised		-
Forfeited and cancelled		(1,239,837)	$	0.13
Outstanding at March 31, 2016		9,246,520	$	0.11		6.70
Exercisable at March 31, 2016		6,467,999	$	0.13		5.55

Activity in stock options during the nine months ended March 31, 2015, 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, 2014		6,335,695	$	0.19
Granted		400,000	$	0.06
Exercised		-
Forfeited and cancelled		(634,338)	$	0.41
Outstanding at March 31, 2015		6,101,357	$	0.16		7.73
Exercisable at March 31, 2015		4,394,399	$	0.15		7.40

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 Nine Months Ended
	March 31,		March 31,		March 31,		March 31,
	2016		2015		2016		2015
Research and development	$	4,000	$	3,000	$	18,000	$	9,000
General and administration		17,000		58,000		81,000		165,000
Total stock-based compensation expense	$	21,000	$	61,000	$	99,000	$	174,000

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:

Nine months ended March 31,	2016			2015
Expected volatility		100	%		100	%
Risk free interest rate		1.31	%		0.96	%
Forfeiture rate		17.00	%		0	%
Dividend yield		0	%		0	%

- 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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