Flux Power (FLUX) Enters $1.75M Settlement to Resolve Litigation

On July 11, 2025, Flux Power Holdings, Inc. (NASDAQ: FLUX), entered into a settlement term sheet (the “Term Sheet”) to fully resolve the previously disclosed class action litigation captioned Kassam v. Flux Power Holdings, Inc. et al. (Case No. 3:25-cv-00113-JO-DDL), against the Company, its former chief executive officer, Ronald F. Dutt, and its former chief financial officer, Charles A. Scheiwe (collectively, the “Defendants”). For additional information about the case, please see the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on May 8, 2025. In settling the class action, the Company is not admitting any liability and neither the Term Sheet nor the definitive settlement agreement that the parties will enter into constitutes or will constitute an admission of liability or an admission regarding the accuracy of any allegation made by the plaintiffs.

The Term Sheet provides for, among other things, the final dismissal of the litigation and a release of claims against the Defendants in exchange for the Company establishing a $1.75 million escrowed settlement fund to cover payments to the settlement class, attorneys’ fees and settlement administration expenses. In addition, the Company will pay for the costs of providing its transfer records and the Class Action Fairness Act settlement notice to all settlement class members.

The settlement class will consist of all persons or entities who purchased publicly traded common stock of the Company between November 15, 2021 and February 14, 2025, but will exclude (i) persons who suffered no compensable losses; and (ii) the Defendants; present and former officers, directors, or control persons of the Company at all relevant times; members of their immediate families and their legal representatives, heirs, successors, predecessors, or assigns; present and former parents, subsidiaries, assigns, successors, and predecessors of the Company; and any entity in which any of the persons excluded hereunder has or had a controlling or majority ownership interest in the Company at any time. The plaintiff will move for certification of the settlement class, and, for settlement purposes only, Defendants will not object to certification of the action as a class action.

Final settlement is subject to, among other things, a definitive settlement agreement not inconsistent with the terms in the Term Sheet and court approval of such agreement. If the settlement does not obtain approval, the parties agree that the settlement class will be decertified without prejudice, and that all the parties will revert to their pre-settlement positions. The parties agreed to document the settlement within a reasonable time, which will not exceed 45 days of the execution of the Term Sheet, unless the parties mutually agree otherwise.

We expect the Company’s liability insurers to directly fund approximately $1.15 million of the settlement fund. The Company estimates that it will contribute approximately $600,000 to the settlement fund as its remaining retention/deductible related to its insurance policy.

You May Also Be Interested In

• Aeva Technologies launches $100 million follow-on stock offering
• Rocket One names former Army general to advisory board
• Bitmine Immersion Technologies plans $300 million preferred stock offering