Flux Power, Inc. (“Flux”), a wholly owned subsidiary of Flux Power Holdings, Inc. (the “Registrant”), entered into that certain Amendment No. 1 to the Unsecured Promissory Note with Cleveland Capital, L.P., a minority stockholder of Registrant (“Cleveland”), effective September 1, 2019 (the “Amendment”) to which the maturity date under the Unsecured Promissory Note issued on July 3, 2019 (“Original Note”) was modified from September 1, 2019 to December 31, 2019.

The Amendment, together with the Original Note, evidences a loan in the principal amount of $1,000,000 provided by Cleveland to Flux (the “Loan”) to that certain Loan Agreement dated July 3, 2019, by and among Flux, the Registrant and Cleveland. In connection with the Loan, the Registrant issued Cleveland a three-year warrant on July 3, 2019 (the “Original Warrant”) to purchase the Registrant’s common stock for a number of shares equal to 0.5% of the number of shares of common stock outstanding after giving effect to the total number of shares of common stock sold in a public offering, based on the exercise price equal to the per share public offering price. As an inducement for the Amendment, the Registrant agreed to amend and restate the Original Warrant to (i) increase the warrant coverage from 0.5% to 1.0% based on the number of shares of common stock outstanding after giving effect to the total number of shares of common stock sold in the next private or public offering (“Offering”), and (ii) change the exercise price to equal the per share purchase price of the Offering (“Amended Warrant Certificate”).

Cleveland is a minority stockholder of the Registrant. Cleveland is also a lender to a certain Amended and Restated Credit Facility Agreement dated March 28, 2019, by and among Cleveland, Flux, Esenjay Investments, LLC (“Esenjay”), and additional lenders to such agreement (“Additional Lenders”). In connection therewith, Cleveland was also issued a secured promissory note by Flux. To secure the obligations under such note, Cleveland entered into a certain Amended and Restated Security Agreement dated March 28, 2019, with the Flux, Esenjay and the Additional Lenders.

The foregoing description of the terms of the Amendment, and the Amended Warrant Certificate does not purport to be complete and is qualified in its entirety by reference to the full text of the respective agreements, copies of which are filed hereto as Exhibits 10.1 and 10.2, and are incorporated herein by reference.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Flux Power Holdings, Inc. Exhibit
EX-10.1 2 flux_ex101.htm AMENDMENT NO….
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About FLUX POWER HOLDINGS, INC. (OTCMKTS:FLUX)

Flux Power Holdings, Inc., designs, develops and sells rechargeable advanced lithium-ion batteries for industrial uses, including UL 2771 Listed lithium-ion LiFT Pack forklift batteries. The Company offers a high power battery cell management system (BMS). Its BMS provides three functions to its battery systems: cell balancing, performed by adjusting the capacity of each cell in a storage system according to temperature, voltage, and internal impedance metrics; monitoring, performed by way of a physical connection to individual cells for monitoring voltage and performing calculations from basic metrics to determine remaining capacity and internal impedance, and error reporting, performed by analyzing data from monitoring each individual cell and making decisions on whether the individual cell or the system is operating out of normal specifications. Using its battery management technology, it offers integrated energy storage solutions or custom modular standalone systems to its clients.