What changed in this filing

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Item 3. Legal Proceedings

2025-01-29 compared with 2023-09-21 · 75 added, 6 removed, 2 unchanged (98% of the section changed)

3 - LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal

proceedings which arise in the ordinary course of business.

However, litigation is subject to inherent uncertainties and an adverse result

in any legal proceedings that may arise from time to time may harm the Company’s business.

To the best knowledge of management,

there are no material legal proceedings pending against us.

time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.

However, litigation is subject to inherent uncertainties and an adverse result in any legal proceedings that may arise from time to

time may harm the Company’s business.

To the best knowledge of management, except for the legal proceedings disclosed below,

there are no other material legal proceedings pending against us.

November 1, 2024, plaintiff Asfa Kassam filed a purported federal securities class action complaint in the United States District Court,

District of Nevada, captioned Kassam v.

Flux Power Holdings, Inc.

2:24-cv-02051), against the Company, our Chief Executive

Officer, Ronald F.

Dutt, and our former Chief Financial Officer, Charles A.

The complaint generally alleges that the defendants

made false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5

promulgated thereunder.

The action purports to be brought on behalf of those who purchased or otherwise acquired the Company’s

publicly traded securities between November 11, 2022 and September 30, 2024, and seeks unspecified damages and other relief.

January 14, 2025, the court granted an unopposed motion to transfer the case to the Southern District of California for all further proceedings.

case is in its early stages and a lead plaintiff has yet to be appointed.

Management believes these claims to be meritless and intends

to vigorously defend against them.

Derivative Action

January 7, 2025, plaintiff Ronald Pearl filed a purported shareholder derivative complaint in the United States District Court, District

of Nevada, captioned Pearl v.

Dutt, et al .

2:25-cv-00042), against current and former officers and directors of the Company,

naming the Company as a nominal defendant.

The complaint generally arises out of the same allegations contained in the Kassam

securities class action and alleges claims for breach of fiduciary duties and related claims.

The action purports to be brought derivatively

on behalf of the Company and seeks damages and other various relief.

Related Actions

On April 30, 2024, a

former employee (the “Employee”) filed a class action complaint against us and Insperity, our third-party payroll

service provider, in San Diego County Superior Court for claims including failure to pay minimum wage, failure to pay overtime,

failure to provide meal periods, failure to provide rest breaks, failure to pay wages at separation, failure to provide accurate

wage statements, failure to reimburse business expenses, failure to produce employment records and unfair competition, which he has

purported to assert on behalf of himself and all other individuals who worked for the Company or Insperity, as non-exempt employees in California between April 30, 2020 and the present (the “Employment

Proceeding”).

On July 1, 2024, we filed an answer to the complaint that none of the asserted claims possessed any merit,

contended that many of the asserted claims were subject to immediate dismissal, and contended that certain of the asserted claims

were subject to binding arbitration.

On October 14, 2024, the Employee elected to dismiss Insperity from the action without prejudice.

On July 5, 2024, the

Employee filed a representative action complaint against us and Insperity in San Diego County Superior Court for Violation of

Private Attorneys’ General Act (“PAGA”), seeking an unspecified amount of penalties and attorneys’ fees based on

allegations that we violated certain California employment laws (the “PAGA Proceeding”).

On August 8, 2024, we filed an

answer to the complaint in which we denied that any of the asserted claims possessed any merit and contended that certain of the

asserted claims were subject to binding arbitration.

On December 10, 2024, we and the Employee stipulated to the consolidation of Employment Lawsuit and the PAGA Action.

As of the date hereof,

both proceedings are currently pending consolidation by the court.

Upon consolidation, we intend to move to have the Employee’s action claims dismissed, the Employee’s

individual claims compelled to binding arbitration and the Employee’s representative PAGA claims stayed pending the arbitration

of his individual claims.

On October 22, 2024, the Employee elected to dismiss Insperity from the action without prejudice.

On January 25, 2024, a

former CPM, LTD Inc.

(“CPM”) employee filed a complaint against CPM, a third-party staffing service provider, Flux

Power, Inc., and Flux Power Holdings, Inc.

(collectively, the “Defendants”) in San Diego County Superior Court for

claims including harassment, failure to prevent harassment, retaliation, wrongful termination, failure to provide meal periods and

rest breaks, failure to provide accurate wage statements, and failure to pay wages at separation.

CPM is a San Diego based staffing company that provided employees (including the plaintiff) to us.

The plaintiff

has alleged that we and CPM were “joint employers” to the plaintiff under California law and are jointly liable for the plaintiff’s

The plaintiff is seeking an

unspecified amount of unpaid wages, statutory penalties, emotional distress damages, punitive damages, and attorneys’ fees

from Defendants.

On June 21, 2024, we filed an answer to the complaint in which we denied that any of the asserted claims possessed

any merit and contended that certain of the asserted claims were subject to binding arbitration.

It is not possible at this time to reasonably assess the final outcomes of these proceedings or reasonably to estimate the possible loss

or range of loss with respect to these proceedings.

Management intends to vigorously defend

against these claims.

4 - MINE SAFETY DISCLOSURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings