FLUX POWER HOLDINGS, INC. (OTCMKTS:FLUX) Files An 8-K Entry into a Material Definitive AgreementItem 1.01Entry Into A Material Definitive Agreement.
On March 22, 2018, our wholly owned subsidiary, Flux Power, Inc. (”Flux”), entered into a certain credit facility agreement with Esenjay Investments, LLC (the “Esenjay”), our major shareholder, to which Esenjay agreed to make available to Flux a line of credit (the "LOC") in a maximum principal amount at any time outstanding of up to Five Million Dollars ($5,000,000) (the “”Principal Amount”), in its sole discretion. In connection with the LOC, the Company issued a secured promissory note (“Note”) in favor of Esenjay for the Principal Amount. As of March 26, 2018, Esenjay has already extended $1,755,000 to Flux as an advance under the LOC resulting in $3,245,000 remaining available under the LOC. Interest on the then outstanding principal amount of the LOC accrues at an interest rate per annum equal to 15%, beginning on the date of each advance. The principal amount of the LOC, together with all accrued but unpaid interest under the Note is due and payable in full on the earlier of: (i) March 31, 2019, or (ii) when such amounts are declared due and payable by Esenjay upon the occurrence of event of default under the Note. The LOC is secured by substantially all of Flux’s tangible and intangible assets to that certain Guaranty and Security Agreement entered into between Flux and Esenjay on March 22, 2018.
Michael Johnson, our director, is a director and shareholder of Esenjay as further described in our Form 10-K for the fiscal year ended June 30, 2017. In addition, Flux also has an unrestricted and open line of credit with Esenjay for a maximum borrowing amount of $10,000,000, which is convertible at a rate of $0.60 per share, bears interest at 8% per annum and matures on January 31, 2019. As of March 22, 2018, there was $2,025,000 available under such unrestricted and open line of credit.
The foregoing description of the terms of the LOC, the Note and the Guaranty and Security Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the respective agreements, a copy of which are filed hereto as Exhibits 10.1, 10.2 and 10.3.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
10.1Credit Facility Agreement, dated March 22, 2018
10.2Secured Promissory Note, dated March 22, 2018
10.3Guaranty and Security Agreement, dated March 22, 2018
Flux Power Holdings, Inc. ExhibitEX-10.1 2 ex_108970.htm EXHIBIT 10.1 ex_108970.htm Exhibit 10.1 CREDIT FACILITY AGREEMENT THIS CREDIT FACILITY AGREEMENT (the “Agreement”),…To view the full exhibit click
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.