Flux Power Holdings, Inc.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On July 18, 2025 the Company entered into a securities purchase agreement, which was amended and restated on September 15, 2025, to sell an aggregate of prefunded warrants to purchase 258,144 shares of its Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”) and warrants to purchase 1,214,766 shares of its common stock at a purchase price equal to $19.369 per prefunded warrant for gross proceeds of approximately $5.0 million. The purchase price was paid in cash or, in lieu of cash, cancellation of certain existing debt by the Company. Each prefunded warrant entitled the holder to purchase one share of the Company’s Series A Convertible Preferred Stock for $0.001 per share and is immediately exercisable. Purchasers of prefunded preferred stock warrants were also issued an additional five-year warrant to purchase a number of shares of the Company’s common stock equal to fifty percent (50%) of the number of shares of common stock issuable upon conversion of the Series A Preferred Stock. Each common warrant has an initial exercise price of $1.715 and is immediately exercisable. As of September 30, 2025, the Company had received approximately $4,800,000 of the proceeds. On October 6, 2025, the Company received a cash payment of approximately $200,000, which completed receipt of the gross proceeds of approximately $5.0 million.

The prefunded preferred stock warrants and common stock warrants were offered to a small select group of accredited investors, as defined in Rule 501 of Regulation D, all of whom had a substantial pre-existing relationship with the Company. Certain affiliates of the Company participated in the offering, among which included the Company’s Chief Executive Officer and director, the Company’s Chief Financial Officer, the Company’s Chief Operating Officer, two directors of the Company and Cleveland Capital, L.P. The issuance of the prefunded preferred stock warrants and the common warrants was made in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder, as the private placement was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by any investor in connection with the private placement.