Core Insights - Dragonfly Energy Holdings Corp. is expanding its Battle Born® product portfolio with new inverter/chargers, Base Series batteries, and a redesigned mobile app, enhancing its position as a complete power solutions provider across various markets [1][5] Product Expansion - The new Battle Born Inverter/Charger Series features pure sine wave models with advanced power control and inverter assist functions for efficient power management, equipped with Dragonfly IntelLigence® technology and compatible with the Battle Born mobile app for real-time monitoring [2] - The Battle Born Base Series Batteries are designed for a broader, value-conscious market, providing a modern LiFePO₄ alternative to traditional sealed lead-acid units, suitable for portable and auxiliary power needs [3] - The updated Battle Born Mobile App V2.0 offers a redesigned interface and optimized backend for better system control, allowing users to monitor and adjust settings in real time, and introduces RV-C integration for interoperability with third-party platforms [4] Strategic Vision - The CEO of Dragonfly Energy emphasized that the expansion of the product ecosystem marks a pivotal moment in the company's evolution, focusing on delivering a fully integrated power system that enhances customer control and confidence [5] - The new products are available for sale as part of the annual Black Friday sales event, with the mobile app launching on November 28, 2025, and additional product releases planned throughout 2026 [5] Company Overview - Dragonfly Energy is a leader in lithium battery technology, specializing in cell manufacturing, battery pack assembly, and full system integration, with a mission focused on the future deployment of proprietary, nonflammable, all-solid-state battery cells [7]

Core Insights - Dragonfly Energy Holdings Corp. has received its first order from Werner Enterprises for the Battle Born DualFlow Power Pack after a successful pilot program, marking a significant step in the company's expansion into the heavy-duty trucking sector [1][8]. Product Overview - The Battle Born DualFlow Power Pack is a lithium-powered auxiliary system that reduces idling by providing power for hotel loads and driver amenities during rest periods, leading to lower fuel costs, reduced emissions, and improved vehicle efficiency [2][4]. Market Validation - The order from Werner Enterprises validates Dragonfly Energy's technology and performance in real-world fleet operations, showcasing the effectiveness of its LiFePO₄-powered solutions [3][4]. Operational Efficiency - The integration of the Battle Born DualFlow Power Pack into Werner's fleet enhances driver comfort and operational efficiency while supporting sustainability goals by reducing unnecessary truck starts during breaks [4][5]. Company Background - Dragonfly Energy specializes in lithium battery technology, including cell manufacturing and battery pack assembly, and is recognized for its Battle Born Batteries brand, with a focus on advancing clean energy solutions [6].

Financial Data and Key Metrics Changes - In Q3 2025, the company reported a 26% year-over-year increase in sales, reaching $16 million, with gross margin expanding by over 700 basis points to nearly 30% [5][19] - Adjusted EBITDA improved to negative $2.1 million from negative $5.5 million, reflecting strength in the OEM segment and gross margin expansion [19] - Net loss was $11.1 million compared to a net loss of $6.8 million, with net loss per share at $0.20 versus a loss of $0.98 per share [19] Business Line Data and Key Metrics Changes - OEM net sales increased by 44%, indicating strong adoption trends in the core RV market, while DTC sales slightly decreased to $5 million from $5.2 million due to macroeconomic headwinds [18][19] - The RV market partnerships expanded, with notable collaborations with Airstream, Awaken RV, and Ember RV, reinforcing the company's position in the premium RV segment [9][10][11] Market Data and Key Metrics Changes - The heavy-duty trucking market is showing traction, with pilot programs leading to production orders from large fleets, indicating a growing validation of the company's lithium power systems [12][13] - The company is gaining market share despite overall industry challenges, with a focus on deepening integration with existing partners and acquiring new manufacturers [11] Company Strategy and Development Direction - The company has successfully executed a comprehensive capital raising and debt restructuring, raising approximately $90 million and significantly improving liquidity and balance sheet strength [6][7] - The focus is now on allocating resources toward near-term revenue opportunities, strategic investments in proprietary technology, and expansion into adjacent markets [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability as they continue executing growth initiatives, despite challenges such as a volatile tariff environment and macroeconomic uncertainty [20][21] - The outlook for Q4 2025 anticipates net sales of approximately $13 million, with adjusted EBITDA expected to be negative $3.3 million, reflecting a cautious approach due to low consumer sentiment and government shutdown impacts [20][21] Other Important Information - The company expanded its intellectual property portfolio with two newly granted U.S. patents, enhancing its technology platform and manufacturing capabilities [15][16] - A $300,000 grant from the Nevada Tech Hub supports modernization initiatives, expected to generate significant annual savings while enhancing efficiency [17] Q&A Session Summary Question: What segment is dragging down Q4 revenue guidance? - Management indicated that Q4 is typically the slowest quarter due to seasonality, with less visibility in the D2C segment impacted by macroeconomic conditions and government shutdowns [23][25][27] Question: What is the outlook for significant growth in 2026? - Management expressed confidence in 2026, expecting a return to normality and significant growth driven by the trucking business and new segments [28] Question: What is the current cash balance and share count? - The company reported approximately 125 million common shares and a pro forma cash balance of around $30 million after recent transactions [31] Question: How is early feedback from potential customers post-debt restructuring? - Management noted a positive shift in conversations with customers, focusing on product benefits and ROI rather than balance sheet concerns [41][42] Question: What are the growth areas being prioritized? - The company plans to invest in expanding its sales team and product development, particularly in the oil and gas market and trucking segment [34][35]

Sales Performance - For the quarter ended September 30, 2025, the company sold 10,977 batteries, generating net sales of $16.0 million, compared to 10,283 batteries and $12.7 million in net sales for the same quarter in 2024, reflecting a year-over-year increase of 26% in net sales [210]. - The company has sold over 360,000 batteries since 2020, with total net sales of $45.6 million for the nine months ended September 30, 2025, up from $38.4 million for the same period in 2024, indicating a growth of 18% [210]. - Net sales increased by $3.2 million, or 25.5%, to $16.0 million for the three months ended September 30, 2025, compared to $12.7 million for the same period in 2024 [257]. - Net sales for the nine months ended September 30, 2025, increased by $7.1 million, or 18.6%, to $45.6 million compared to $38.4 million for the same period in 2024 [269]. Financial Performance - The company reported a net loss of $11.1 million for the quarter ended September 30, 2025, compared to a net loss of $6.8 million for the same quarter in 2024, representing an increase in losses of approximately 63% [218]. - The company generated a net loss of $24.9 million for the nine months ended September 30, 2025, an improvement from a net loss of $30.8 million for the same period in 2024 [277]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $(6.5) million, compared to $(14.5) million for the same period in 2024 [296]. - Total other expense increased to $7.3 million for the three months ended September 30, 2025, compared to $0.8 million for the same period in 2024, primarily due to higher interest expense [263]. - Interest expense related to debt securities was $16.5 million for the nine months ended September 30, 2025, compared to $15.3 million for the same period in 2024 [275]. Operational Challenges - The company has faced challenges in maintaining relationships with key customers and suppliers, which could impact its ability to generate revenue and achieve profitability [212]. - The company is currently dependent on a limited number of suppliers for lithium iron phosphate cells and a single manufacturing facility, which poses risks to its production capabilities [212][214]. - The company has not achieved the first tranche milestone of $250 million in total audited revenue for 2023, which would have allowed for the issuance of additional shares [225]. Capital and Funding - As of September 30, 2025, the company had cash totaling $3.8 million and indicated a need to raise additional funds to support ongoing operations and capital expenditures [218][219]. - The company raised approximately $3.2 million from the Initial Offerings and $4.2 million from the Second Offering, excluding any proceeds from the exercise of the Private Placement Convertible Preferred Warrants [230]. - The company completed the July 2025 Public Offering, raising gross proceeds of approximately $5.5 million and net proceeds of $4.7 million after deducting underwriting discounts and commissions [235]. - The First October 2025 Offering raised gross proceeds of approximately $28.8 million and net proceeds of $26.9 million after deducting underwriting discounts and commissions [236]. - The company expects to raise additional funds for ongoing costs, including research and development for solid-state batteries and facility expansions [303]. Research and Development - The company is developing proprietary solid-state cell technology, which is expected to be a key differentiator in the energy storage market, with successful demonstrations of producing anode and cathode materials at scale in August and October 2023, respectively [217]. - Research and development expenses decreased by $1.0 million, or 64.1%, to $0.6 million for the three months ended September 30, 2025, compared to $1.6 million for the same period in 2024 [260]. - The company is currently focused on scaling its proprietary dry electrode process for domestic production of full LFP cells, with plans to return to solid-state chemistry as capital becomes available [247]. Cost Management - Cost of goods sold increased by $1.4 million, or 14.0%, to $11.2 million for the three months ended September 30, 2025, compared to $9.9 million for the same period in 2024 [258]. - Gross profit increased by $1.9 million, or 65.0%, to $4.7 million for the three months ended September 30, 2025, with a gross profit percentage increase of 7.1% to 29.7% [259]. - Gross profit for the nine months ended September 30, 2025, increased by $4.2 million, or 46.0%, to $13.3 million, with a gross profit percentage increase of 5.5% to 29.1% [271]. Strategic Initiatives - The company launched the Battle Born DualFlow Power Pack, a hybrid electrification solution for the trucking industry, as part of its corporate optimization initiative aimed at driving near-term revenue and profit [213]. - The company plans to expand into new end markets for LFP batteries, including rail, specialty vehicles, and data centers, which may incur significant marketing costs [241]. - The company has signed a Commercial Offtake Agreement for lithium supply, which is expected to help manage costs over time [243]. Debt and Liabilities - The company entered into a Sixth Amendment to the Term Loan Agreement, adjusting the fixed interest rate to 12% per annum and waiving certain financial covenants through December 31, 2026 [300]. - A prepayment of $45.0 million was made on the Term Loan, and $5.0 million of principal was forgiven by the Term Loan Lenders, leaving approximately $19.0 million outstanding [305]. - The total debt was reduced from $72.0 million to approximately $19.0 million following the Sixth Amendment, deferring near-term cash interest requirements [306]. - The estimated future obligations include $2.9 million in short-term operating lease liabilities and $21.1 million in long-term operating lease liabilities as of September 30, 2025 [318].

Preliminary Third Quarter 2025 Financial Results Preliminary Q3 2025 financial results exceeded guidance for Net Sales and Adjusted EBITDA, with a cautionary note on data finalization [Highlights of Preliminary Results](index=1&type=section&id=Highlights_of_Preliminary_Results) Preliminary Q3 2025 Net Sales and Adjusted EBITDA exceeded guidance, with strong year-over-year growth and reduced loss Preliminary Q3 2025 Financial Highlights | Metric | Preliminary Q3 2025 | Guidance | YoY Growth/Change | | :-------------------- | :------------------ | :--------- | :------------------ | | Net Sales | $16.0 million | $15.9 million | 26% Growth | | Adjusted EBITDA | $(2.2) million | $(2.7) million | $3.3 million reduction in loss | [CEO Commentary on Performance](index=1&type=section&id=CEO_Commentary_on_Performance) CEO highlighted preliminary results exceeding guidance, attributing continued Net Sales growth and Adjusted EBITDA improvement to strategic actions - Preliminary Q3 Net Sales and Adjusted EBITDA exceeded guidance, showing continued year-over-year Net Sales growth and Adjusted EBITDA improvement[3](index=3&type=chunk) - Results underscore a focus on driving near-term revenue growth and executing strategic actions, such as a recent equity raise, to enhance financial flexibility and potential for sustained net sales growth and profitability[3](index=3&type=chunk) [Cautionary Note on Preliminary Data](index=1&type=section&id=Cautionary_Note_on_Preliminary_Data) The reported Q3 2025 financial data is preliminary and subject to finalization and potential material adjustments during Form 10-Q preparation - Preliminary Q3 2025 Net Sales and Adjusted EBITDA are subject to finalization and adjustment during the preparation of the Company's Quarterly Report on Form 10-Q[4](index=4&type=chunk) - Investors should exercise caution in relying on this preliminary information, as material adjustments may be identified[4](index=4&type=chunk) Company Overview and Investor Information This section provides an overview of Dragonfly Energy's business and details for its third quarter 2025 webcast [About Dragonfly Energy](index=1&type=section&id=About_Dragonfly_Energy) Dragonfly Energy is a leading lithium battery technology company specializing in cell manufacturing, battery pack assembly, and full system integration - Dragonfly Energy is a comprehensive lithium battery technology company specializing in cell manufacturing, battery pack assembly, and full system integration[7](index=7&type=chunk) - The company's Battle Born Batteries® brand is a frontrunner in the lithium battery industry, with hundreds of thousands of reliable battery packs deployed[7](index=7&type=chunk) - Dragonfly Energy's mission is the future deployment of its proprietary, nonflammable, all-solid-state battery cells, utilizing a patented dry electrode manufacturing process[7](index=7&type=chunk) [Third Quarter 2025 Webcast Details](index=1&type=section&id=Third_Quarter_2025_Webcast_Details) Dragonfly Energy will host a conference call on November 14, 2025, to discuss its Q3 2025 financial and operational results - A conference call to discuss Q3 2025 financial and operational results will be held on Friday, November 14, 2025, at 4:30 PM Eastern Time[5](index=5&type=chunk) - The call can be accessed live via webcast or telephone, with specific dial-in numbers and a conference ID provided[5](index=5&type=chunk) - An archive of the webcast will be available shortly after the call on the Investor Relations section of Dragonfly Energy's website[6](index=6&type=chunk) Disclosures and Non-GAAP Measures This section outlines forward-looking statements and the use of non-GAAP financial measures, including their definitions, rationale, limitations, and reconciliation [Forward-Looking Statements](index=2&type=section&id=Forward_Looking_Statements) This press release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially - The press release includes forward-looking statements concerning future results, operations, and financial position, subject to risks and uncertainties[9](index=9&type=chunk) - Factors such as market recovery, ability to penetrate new markets, supply chain, intellectual property, and competition could cause actual results to differ materially[10](index=10&type=chunk) - The Company undertakes no obligation to update these statements to reflect events or circumstances occurring after their original date, except as required by law[11](index=11&type=chunk) [Use of Non-GAAP Financial Measures](index=2&type=section&id=Use_of_Non_GAAP_Financial_Measures) Dragonfly Energy uses non-GAAP financial measures like EBITDA and Adjusted EBITDA to supplement GAAP information and enhance understanding of financial performance - Non-GAAP financial measures like EBITDA and Adjusted EBITDA are provided to supplement GAAP information and enhance understanding of financial performance[12](index=12&type=chunk) - These non-GAAP measures should be considered as a supplement to, not a substitute for, financial information prepared on a GAAP basis[12](index=12&type=chunk) [Definition and Rationale for Adjusted EBITDA](index=3&type=section&id=Definition_and_Rationale_for_Adjusted_EBITDA) Adjusted EBITDA is a non-GAAP measure used by management to evaluate operating performance by excluding specific non-cash and non-recurring items - Adjusted EBITDA is a non-GAAP measure calculated by adjusting EBITDA to exclude stock-based compensation expense and changes in fair market value of warrant liabilities[13](index=13&type=chunk) - It is a key measure used by management to evaluate operating performance, generate future operating plans, and make strategic decisions, highlighting trends in core operating results[14](index=14&type=chunk) [Limitations of Adjusted EBITDA](index=3&type=section&id=Limitations_of_Adjusted_EBITDA) Adjusted EBITDA has analytical limitations as it does not reflect cash expenditures, tax expenses, or cash requirements for asset replacements - Adjusted EBITDA does not reflect cash expenditures, future capital expenditure requirements, contractual commitments, or changes in working capital needs[16](index=16&type=chunk) - It does not reflect tax expense or cash requirements to pay taxes, nor does it account for cash requirements for asset replacements despite depreciation and amortization being non-cash charges[16](index=16&type=chunk) - The usefulness of Adjusted EBITDA as a comparative measure is limited because other companies in the industry may calculate it differently[16](index=16&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=4&type=section&id=Reconciliation_of_GAAP_to_Non_GAAP_Measures) A reconciliation table details the calculation of EBITDA and Adjusted EBITDA from Net (Loss) Income Before Taxes for Q3 2025 and Q3 2024 Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (U.S. Dollars in Thousands) | | Three Months Ended | | | :---------------------------------- | :------------------ | :------------------ | | | Sep 30, 2025 | Sep 30, 2024 | | **EBITDA Calculation** | | | | Net (Loss) Income Before Taxes | $(11,089) | $(6,779) | | Interest Expense | 6,409 | 5,615 | | Depreciation and Amortization | 502 | 327 | | **EBITDA** | **$(4,178)** | **$(837)** | | **Adjustments to EBITDA** | | | | Stock - Based Compensation | 168 | 256 | | Separation Agreement Expense | 35 | - | | Lease Impairment | 555 | - | | Preferred Stock Financing expenses | 13 | - | | Debt Restructure Expense | 354 | - | | Change in fair market value of warrant liability | 883 | (4,875) | | **Adjusted EBITDA** | **$(2,170)** | **$(5,456)** |

Core Insights - Dragonfly Energy reported strong financial results for Q3 2025, with net sales and adjusted EBITDA exceeding guidance, driven by a 44% growth in OEM sales [1][2] - The company successfully completed three public offerings, raising approximately $90 million, which significantly improved its financial position and reduced outstanding debt [2][3] - The gross margin expanded by 710 basis points year-over-year, reaching 29.7%, attributed to higher volumes, favorable product mix, and cost optimization initiatives [4][5] Financial Performance - Net sales increased by 25.5% year-over-year to $15.967 million, with OEM sales growing by 44.3% to $10.679 million [3][4] - Gross profit rose by 65.0% to $4.736 million, while operating expenses decreased slightly to $8.514 million [4][5] - The net loss for the quarter was $(11.070) million, compared to $(6.779) million in the prior year, with adjusted EBITDA improving to $(2.137) million from $(5.456) million [4][5][33] Market Position and Outlook - The company is experiencing increased adoption of its products among RV OEMs, validating its value proposition in the premium offerings market [2][3] - Dragonfly Energy anticipates fourth-quarter net sales of approximately $13.0 million, representing a year-over-year growth of about 7% [7] - The company is focused on expanding its partnerships in the RV market and adjacent markets, alongside growing its patent portfolio to strengthen its competitive advantage [2][3]

Core Insights - Dragonfly Energy Holdings Corp. has successfully restructured its outstanding debt, significantly improving its balance sheet and financial flexibility [1][2] - The restructuring aligns capital resources to support the company's growth strategy, particularly in battery manufacturing and technology initiatives [1][2] Debt Restructuring Details - The company has prepaid $45.0 million of its senior secured term loan using proceeds from a recent stock offering [6] - Lenders converted $25.0 million of the term loan into preferred stock, convertible into common stock at a fixed price of $3.15 per share [6] - Lenders forgave $5.0 million of the term loan principal, leaving a remaining balance of $19.0 million with a fixed interest rate of 12% per annum, maturing in October 2027 [6] - Certain financial covenants under the term loan agreement have been waived until December 31, 2026 [6] Company Overview - Dragonfly Energy is a leader in lithium battery technology, specializing in cell manufacturing, battery pack assembly, and full system integration [3] - The company is known for its Battle Born Batteries® brand and has deployed hundreds of thousands of battery packs through top-tier OEMs and a diverse retail customer base [3] - Dragonfly Energy's patented dry electrode manufacturing process allows for chemistry-agnostic power solutions across various applications, including energy storage systems and electric vehicles [3]

Core Insights - Hybrid Power Solutions Inc. has entered a distribution agreement with Dragonfly Energy Holdings Corp. to expand the reach of its advanced battery energy storage systems [1][2] - The partnership aims to leverage Dragonfly Energy's established distribution channels to accelerate the adoption of Hybrid's portable power systems in key markets such as mobile services, recreational vehicles, and off-grid applications [2][3] - Both companies share a vision for advancing clean energy solutions, with Hybrid focusing on eco-friendly power systems and Dragonfly Energy specializing in lithium battery technology [3][4] Company Overview - Hybrid Power Solutions Inc. is a Canadian clean energy innovator listed on the Canadian Securities Exchange, specializing in portable power systems that eliminate fossil fuel dependency in off-grid applications [6] - Dragonfly Energy Holdings Corp. is a leader in lithium battery technology, known for its Battle Born Batteries® brand and its patented dry electrode manufacturing process, which supports a wide range of applications [4][5]

Core Insights - Dragonfly Energy Holdings Corp. has regained compliance with Nasdaq's minimum bid price and market value requirements, ensuring its continued listing on the Nasdaq Capital Market [1] - The company will remain under a Mandatory Panel Monitor for one year, which could lead to a Delist Determination Letter if compliance is not maintained [1] Company Overview - Dragonfly Energy is a leader in lithium battery technology, focusing on cell manufacturing, battery pack assembly, and full system integration [2] - The company is known for its Battle Born Batteries® brand and has deployed hundreds of thousands of battery packs through top-tier OEMs and a diverse retail customer base [2] - Dragonfly Energy utilizes a patented dry electrode manufacturing process to produce chemistry-agnostic power solutions for various applications, including energy storage systems, electric vehicles, and consumer electronics [2] - The company's mission includes the future deployment of proprietary, nonflammable, all-solid-state battery cells [2]

Core Viewpoint - Dragonfly Energy Holdings Corp. announced a public offering of 36 million shares at $1.35 per share, aiming to raise approximately $55.4 million for working capital and debt restructuring [1][2]. Group 1: Offering Details - The public offering includes 36,000,000 shares of common stock priced at $1.35 each and pre-funded warrants for up to 5,000,000 shares at $1.3499 each, with gross proceeds expected to be around $55.4 million before expenses [1]. - Underwriters have a 30-day option to purchase an additional 6,150,000 shares at the public offering price [1]. - The offering is expected to close on or about October 17, 2025, pending customary closing conditions [1]. Group 2: Use of Proceeds - The net proceeds will be used for working capital, prepayment of $45 million in outstanding debt, and investments in initiatives to drive near-term revenue and advancements in battery technologies [2]. Group 3: Company Overview - Dragonfly Energy is a leader in lithium battery technology, focusing on cell manufacturing and system integration, with a mission to develop nonflammable, all-solid-state battery cells [5]. - The company has established a strong presence in the lithium battery market through its Battle Born Batteries® brand, with a significant deployment of battery packs across various applications [5].