FLUX POWER HOLDINGS, INC. (OTCMKTS:FLUX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
FLUX POWER HOLDINGS, INC. (OTCMKTS:FLUX) Files An 8-K Entry into a Material Definitive Agreement
On July 3, 2019, Flux Power Holdings, Inc. (the “Registrant”) and Flux Power, Inc., a wholly-owned subsidiary of the Registrant (the “Company”), entered into a certain loan agreement with Cleveland Capital, L.P., a Delaware limited partnership and a minority stockholder of the Registrant (“Cleveland”), to which Cleveland agreed to loan the Company $1,000,000 (the “Loan”).
In connection with the Loan, on July 3, 2019, the Company issued Cleveland an unsecured short-term promissory in the amount of $1,000,000 (the “Unsecured Promissory Note”). The promissory note bears an interest rate of 15.0% per annum and is due on September 1, 2019, unless repaid earlier from a percentage of proceeds from certain identified accounts receivable. In connection with the Loan, the Registrant issued Cleveland a three-year warrant (the “Cleveland Warrant”) to purchase the Registrant’s common stock in a number equal to one-half percent (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. The Cleveland Warrant has an exercise price equal to the per share public offering price.
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, the Company, Esenjay Investments, LLC, (“Esenjay”), and additional lenders to such agreement (“Additional Lenders”). In connection therewith, Cleveland was also issued a secured promissory note. To secure the obligations under such note, Cleveland entered into a certain amended and restated credit facility agreement dated March 28, 2019, with the Company, Esenjay and the Additional Lenders.
The foregoing description of the terms of the Loan Agreement, the Unsecured Promissory Note, and the Cleveland Warrant, 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, 10.2, and 10.3, and are incorporated herein by reference.
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
Flux Power Holdings, Inc. Exhibit
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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.
