Flux Power Reaches Settlement Agreement in Shareholder Derivative Action

Flux Power Holdings provided the following notice of an Order from the United States District Court for the Southern District of California related to the proposed settlement of derivative action: "You are hereby notified, pursuant to the December 8, 2025 Preliminary Approval Order entered in the above-captioned shareholder derivative action, that a Stipulation and Agreement of Settlement dated August 12, 2025 has been entered to resolve the shareholder derivative claims pending on behalf of nominal defendant Flux Power in the United States District Court for the Southern District of California. The Action arises from allegations that the Individual Defendants breached their fiduciary duties as officers and directors of Flux Power by making false and/or misleading statements and/or failing to disclose that: (i) Flux Power's financial statements from November 10, 2022 to the filing of the Complaint included, among other things, overstated inventory, gross profit, current assets, and total assets; (ii) Flux Power understated its cost of sales and net loss; (iii) as a result, Flux Power would need to restate its previously filed financial statements from November 10, 2022 to the filing of the Complaint; (iv) Flux Power understated its internal control weaknesses and/or stated that it had adequate internal controls when it did not; and (v) as a result, the Individual Defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis. As a result of this alleged wrongdoing, the Action alleges the Company suffered damage. In connection with, and conditioned upon, the Settlement, Flux Power has agreed to implement and/or maintain corporate governance reforms, as defined and set forth in the Stipulation. The Parties believe that the Settlement is fair, reasonable, and in the best interests of the Company and its stockholders"