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

Quarterly report pursuant to Section 13 or 15(d)

Warrant Derivative Liability (Tables)

Warrant Derivative Liability (Tables)

3 Months Ended

Sep. 30, 2012

Fair Value Measurements, Nonrecurring [Table Text Block]

Warrants were determined to have a fair value per share and aggregate as of September 30, 2012 and in aggregate as of June 30, 2012 as follows:

	Issued Warrants		Fair Value Per Share $ as of September 30, 2012		Total Fair Value in Aggregate $ as of September 30, 2012		Total Fair Value in Aggregate $ as of June 30, 2012

June 2012 Warrants		562,551	$	1.53	$	862,535	$	1,158,154
July 2012 Warrants		338,013	$	1.56	$	527,046	$	—
August 2012 Warrants		120,719	$	1.58	$	190,634	$	—
Advisory Agreement Warrants		1,837,777	$	1.54	$	2,831,135	$	3,784,870

Fair Value, Concentration of Risk [Table Text Block]

Significant assumptions used to estimate the fair value of the warrants classified as derivative liabilities are summarized below:

Expected volatility

100%

Risk free interest rate

0.6%

Stock price (based on prices on valuation dates)

$1.55 to $2.25

Exercise price

$0.41

Expected term

5 years

Subsequent financing probability

50%

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

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