Annual report pursuant to Section 13 and 15(d)

Note 14 - Commitments and Contingencies

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Note 14 - Commitments and Contingencies
12 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
NOTE
1
4
- COMMITMENTS AND CONTINGENCIES
 
From time to time, we
may
be involved in litigation relating to claims arising out of our operations. Since
June 2015,
we have been a party to a legal proceeding arising from a work related injury that took place in
June 2013.
We deny and dispute all liability and damage allegations made by or on behalf of the plaintiff. However, having fully considered the risks, time and costs associated with continued litigation of this claim, as well as an appeal, we have decided to fully and finally resolve and settle the dispute. Accordingly, on
August 26, 2016
we entered into a settlement agreement with the plaintiff whereby in exchange for the plaintiff releasing Flux Power from any and all claims of any nature that the plaintiff had or now has or might in the future have against us, we agreed to pay the plaintiff
$10,000
as settlement. Included in accrued expenses in the accompanying consolidated financial statements as of
June 30, 2016
is a
$10,000
accrual associated with this claim, which was paid in
September 2016.
 
Operating Leases
 
 
The Company’s corporate headquarters totals
22,054
square feet and is located in Vista, California.  Effective
February 25, 2014,
the Company entered into a
two
-year lease agreement for this facility with average monthly rent payments of approximately
$12,000
per month and paid a security deposit of
$25,000,
or approximately
2
months of rent. Our lease was subsequently amended resulting in average rent expense of
$14,000
per month and expiring on
May 31, 2018.
 
The Company also subleases space to a related party, Epic Boats, on a month-to-month basis at a rate of
10%
of lease expense.
 
Total rent expense was $
140,000
and
$137,000
for the years ended
June 30, 2017
and
2016,
respectively, net of sublease income.