Financial Data and Key Metrics Changes - Net sales grew 23% year over year to $16.2 million, marking the third consecutive quarter of revenue growth [5][19] - Gross profit increased 45.4% to $4.6 million, with gross margin expanding 430 basis points to 28.3% [19] - Operating expenses decreased to $7.9 million from $9.9 million, reflecting lower R&D costs [19] - Net loss improved to $7 million or $0.58 per share, compared to a net loss of $13.6 million or $2.02 per share [19] - Adjusted EBITDA improved to negative $2.2 million from negative $6.2 million [19] Business Line Data and Key Metrics Changes - OEM segment net sales rose over 50% year over year to $10.1 million, driven by strong adoption of solutions [5][19] - DTC segment net sales were $5.9 million, down from $6.5 million due to macroeconomic uncertainties [6][19] Market Data and Key Metrics Changes - The company noted a shift in the industry towards premium features and value-added offerings, contrasting with previous cost-reduction strategies [6] - The heavy-duty trucking market remains challenging, but pilot programs are showing positive results [16] Company Strategy and Development Direction - The company is focused on expanding OEM partnerships and leveraging engineering capabilities to deliver integrated solutions [6][11] - Domestic manufacturing capabilities are emphasized as a strategic advantage in a volatile trade environment [8][9] - The company is committed to innovation, recently granted a patent for a non-flammable all-solid-state battery program [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to capitalize on growth opportunities despite a challenging macro environment [11][21] - The company anticipates net sales of $15.9 million in Q3, representing approximately 25% year-over-year growth [21] - Management is optimistic about the ramp-up of pilot programs in the heavy-duty trucking sector [30] Other Important Information - The company completed a public offering raising $5.5 million to support expansion into adjacent markets [10] - The company has optimized its capital structure by exchanging preferred shares for common stock, eliminating associated interest payments [10] Q&A Session Summary Question: When do you expect pilot programs in heavy-duty trucking to impact P&L? - Management expects revenue impact in the first half of next year as fleets await new truck orders [25] Question: How should tariffs impact P&L in the coming quarters? - Management has managed tariff impacts through better inventory pricing and onshoring components, maintaining confidence in managing costs [27][28] Question: Should we expect sequential improvement in Q4? - Management anticipates sequential improvement driven by RV industry growth and new market contributions [31] Question: Can you discuss the recent patent awarded? - The patent relates to the preparation of feedstock for solid-state batteries, crucial for the dry electrode process [34]

Company Overview - Dragonfly Energy is a commercial leader in deep-cycle lithium-ion energy storage solutions, having sold over 400,000 batteries since 2020[15] - The company has generated over $350 million in revenue from 2020 through Q2 2025[11] - Dragonfly Energy has a domestic manufacturing footprint with a 400,000 sq ft Nevada facility[9] Market Position and Growth - The company is well-positioned in expanding, high-growth markets including RV, Marine, Off-Grid, Trucking, and Industrial[16] - Dragonfly Energy is a lithium energy storage leader in the RV market, with factory installations across major RV manufacturers[41] - The company is strategically expanding into heavy-duty trucking with battery-powered anti-idling solutions[46] Technology and Innovation - Dragonfly Energy has a patented dry electrode process for cost-effective, scalable production in the US[18] - The company is developing disruptive all-solid-state technology for long-term upside[18] - Dragonfly Energy has over 90 patents granted, filed, or pending globally[55] Financial Performance - The company anticipates continued year-over-year quarterly revenue growth in FY25[70] - Dragonfly Energy is targeting adjusted EBITDA breakeven by the fourth quarter of 2025[70] - In Q2 2025, net sales growth was 23% year-over-year, reaching $16.2 million[70]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) The company files a Form 10-Q for the period ended June 30, 2025, detailing its registrant status and outstanding shares - Filing is a Quarterly Report (Form 10-Q) for the period ended June 30, 2025[2](index=2&type=chunk) - Registrant: DRAGONFLY ENERGY HOLDINGS CORP, incorporated in Nevada[2](index=2&type=chunk)[3](index=3&type=chunk) Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |---|---|---| | Common Stock, par value $0.0001 per share | DFLI | The Nasdaq Capital Market | | Redeemable Warrants, exercisable for common stock | DFLIW | The Nasdaq Capital Market | - The registrant is a **non-accelerated filer**, **smaller reporting company**, and **emerging growth company**[5](index=5&type=chunk) - As of August 11, 2025, there were **61,724,593 shares** of common stock outstanding[6](index=6&type=chunk) [TABLE OF CONTENTS](index=3&type=section&id=TABLE%20OF%20CONTENTS) The report is structured into two main parts covering financial information and other corporate disclosures - The report is divided into **PART I FINANCIAL INFORMATION** and **PART II OTHER INFORMATION**[8](index=8&type=chunk) - Part I includes Financial Statements, Management's Discussion and Analysis, Quantitative and Qualitative Disclosures about Market Risk, and Controls and Procedures[8](index=8&type=chunk) - Part II includes Legal Proceedings, Risk Factors, Unregistered Sales of Equity Securities and Use of Proceeds, Defaults Upon Senior Securities, Mine Safety Disclosures, Other Information, and Exhibits[8](index=8&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=10&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | |---|---|---| | Total Current Assets | $30,787 | $32,925 | | Property and Equipment, Net | $21,481 | $22,107 | | Total Assets | $71,774 | $75,214 | | Total Current Liabilities | $22,396 | $21,855 | | Total Long-Term Liabilities | $64,737 | $62,763 | | Total Liabilities | $87,133 | $84,618 | | Redeemable Preferred Stock | $1,245 | $- | | Total Stockholders' (Deficit) | $(16,604) | $(9,404) | - Total assets decreased from **$75,214 thousand** at December 31, 2024, to **$71,774 thousand** at June 30, 2025[10](index=10&type=chunk) - Total liabilities increased from **$84,618 thousand** at December 31, 2024, to **$87,133 thousand** at June 30, 2025[10](index=10&type=chunk) - Stockholders' deficit worsened from **$(9,404) thousand** at December 31, 2024, to **$(16,604) thousand** at June 30, 2025[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |---|---|---|---|---| | Net Sales | $16,248 | $13,208 | $29,604 | $25,713 | | Cost of Goods Sold | $11,643 | $10,041 | $21,071 | $19,495 | | Gross Profit | $4,605 | $3,167 | $8,533 | $6,218 | | Total Operating Expenses | $7,886 | $9,916 | $17,728 | $18,806 | | Loss From Operations | $(3,281) | $(6,749) | $(9,195) | $(12,588) | | Total Other Expense | $(3,753) | $(6,878) | $(4,636) | $(11,406) | | Net Loss | $(7,034) | $(13,627) | $(13,831) | $(23,994) | | Loss Per Share - Basic & Diluted | $(0.58) | $(2.02) | $(1.42) | $(3.57) | - Net sales increased by **23.0%** for the three months ended June 30, 2025, to **$16,248 thousand** from $13,208 thousand in the prior year[12](index=12&type=chunk) - Gross profit increased by **45.4%** for the three months ended June 30, 2025, to **$4,605 thousand** from $3,167 thousand in the prior year[12](index=12&type=chunk) - Net loss significantly reduced to **$(7,034) thousand** for the three months ended June 30, 2025, from $(13,627) thousand in the prior year[12](index=12&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Condensed Consolidated Statements of Stockholders' Equity (Deficit) (in thousands) | Metric | January 1, 2025 | June 30, 2025 | |---|---|---| | Total Stockholders' (Deficit) | $(9,404) | $(16,604) | | Net loss | - | $(13,831) (cumulative for 6 months) | | Redeemable preferred stock issued, net | - | $7,330 (cumulative for 6 months) | | Conversion of preferred stock to common stock | - | $5,812 (cumulative for 6 months) | | Additional paid in capital | $72,749 | $79,377 | | Accumulated deficit | $(82,154) | $(95,985) | - Stockholders' deficit increased from **$(9,404) thousand** at January 1, 2025, to **$(16,604) thousand** at June 30, 2025[14](index=14&type=chunk) - Net loss for the six months ended June 30, 2025, was **$(13,831) thousand**[14](index=14&type=chunk) - Proceeds from redeemable preferred stock issued, net, totaled **$7,330 thousand** for the six months ended June 30, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |---|---|---| | Net Cash Used in Operating Activities | $(7,865) | $(7,411) | | Net Cash Used in Investing Activities | $(1,621) | $(1,324) | | Net Cash Provided by Financing Activities | $7,370 | $721 | | Net (Decrease) in cash and cash equivalents | $(2,116) | $(8,014) | | Ending Cash and cash equivalents | $2,733 | $4,699 | - Net cash used in operating activities increased to **$(7,865) thousand** for the six months ended June 30, 2025, from $(7,411) thousand in the prior year[15](index=15&type=chunk) - Net cash provided by financing activities significantly increased to **$7,370 thousand** for the six months ended June 30, 2025, from $721 thousand in the prior year, primarily due to proceeds from preferred stock offerings[17](index=17&type=chunk) - Cash and cash equivalents at the end of the period decreased to **$2,733 thousand** as of June 30, 2025, from $4,849 thousand at the beginning of the period[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 - NATURE OF BUSINESS](index=10&type=section&id=NOTE%201%20-%20NATURE%20OF%20BUSINESS) - Dragonfly Energy Holdings Corp sells lithium-ion battery packs for various applications[19](index=19&type=chunk) - The company sells to distributors under the **Dragonfly Energy** brand and direct to consumers under the **Battleborn Batteries** trade name[19](index=19&type=chunk) - It also develops technology for improved lithium-ion battery manufacturing and assembly methods[19](index=19&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - Financial statements are prepared in accordance with U.S GAAP and SEC regulations for interim financial information[21](index=21&type=chunk) - Management concluded there is **significant doubt** about the Company's ability to continue as a **going concern** due to ongoing losses, negative cash flow, and uncertainty regarding future revenue and financing, despite recent strategic initiatives[30](index=30&type=chunk)[31](index=31&type=chunk) - Revenue is recognized when control of promised goods or services is transferred to the customer, typically at shipment for products[39](index=39&type=chunk)[40](index=40&type=chunk) - The company now manages its business through two distinct operating segments: **Direct to Customer (DTC)** and **Original Equipment Manufacturer (OEM)**, a change from a single segment in Q4 2024[66](index=66&type=chunk) [Going Concern](index=10&type=section&id=Going%20Concern) - The Company incurred losses from operations and had negative cash flow from operations during the six months ended June 30, 2025 and 2024[24](index=24&type=chunk) - As of June 30, 2025, the Company had **$2,733 thousand in cash and cash equivalents** and working capital of **$8,391 thousand**[24](index=24&type=chunk) - Strategic initiatives, including a Term Loan maturity extension to October 2027 and deferral of principal/interest payments to April 2026, and removal of most financial covenants (except **$2,500 thousand minimum cash**), were executed to alleviate substantial doubt[29](index=29&type=chunk)[30](index=30&type=chunk) - Despite these initiatives, management concluded there is **significant doubt** about the Company's ability to continue as a **going concern** due to inherent uncertainty surrounding projected revenues from new markets and no further concessions from lenders[30](index=30&type=chunk) [Revenue Recognition](index=13&type=section&id=Revenue%20Recognition) - Revenue is recognized when control of promised goods or services is transferred to the customer, typically at the point of shipment for standard goods[39](index=39&type=chunk)[40](index=40&type=chunk) - The **$5,000 thousand** initial licensing fee from the Stryten Energy LLC agreement is recognized as revenue on a straight-line basis over five years[44](index=44&type=chunk) Disaggregated Revenues by Distribution Channel (in thousands) | Sales Channel | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |---|---|---|---|---| | Direct to customer | $5,948 | $6,534 | $10,963 | $11,737 | | Original equipment manufacture | $10,050 | $6,674 | $18,141 | $13,976 | | License fee revenue | $250 | $- | $500 | $- | | Total Net Sales | $16,248 | $13,208 | $29,604 | $25,713 | [Segment Reporting](index=17&type=section&id=Segment%20Reporting) - The Company now has two reportable segments: **Direct to Customer (DTC)** for Battle Born branded batteries and **Original Equipment Manufacturer (OEM)** for Dragonfly branded batteries[66](index=66&type=chunk)[194](index=194&type=chunk) - This change in reporting structure was implemented in the fourth quarter of 2024 due to the development of operations and internal decision-making processes[66](index=66&type=chunk) - The Chief Executive Officer acts as the Chief Operating Decision Maker (CODM) and evaluates segment performance based on gross and net profit/loss from operations[195](index=195&type=chunk)[197](index=197&type=chunk) [NOTE 3 - FAIR VALUE MEASUREMENTS](index=17&type=section&id=NOTE%203%20-%20FAIR%20VALUE%20MEASUREMENTS) - Fair value measurements are categorized into a three-tier hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than quoted prices), and **Level 3** (unobservable inputs)[70](index=70&type=chunk) Fair Value of Warrant Liabilities (in thousands) | Liability | June 30, 2025 (Level 2) | December 31, 2024 (Level 2) | |---|---|---| | Warrant liability - Term Loan | $273 | $3,883 | | Warrant liability - June Public Offering | $49 | $1,250 | | Total liabilities | $322 | $5,133 | - Warrant liabilities were transferred from **Level 3 to Level 2** as of December 31, 2024, due to the use of observable inputs (stock price, comparable company volatility) in the Black-Scholes calculation[73](index=73&type=chunk) - There was no Level 3 activity for the three and six months ended June 30, 2025[78](index=78&type=chunk) [NOTE 4 - INVENTORY](index=20&type=section&id=NOTE%204%20-%20INVENTORY) Inventory Composition (in thousands) | Inventory Type | June 30, 2025 | December 31, 2024 | |---|---|---| | Raw material | $18,298 | $18,776 | | Finished goods | $2,755 | $2,940 | | Total inventory | $21,053 | $21,716 | - Total inventory decreased from **$21,716 thousand** at December 31, 2024, to **$21,053 thousand** at June 30, 2025[81](index=81&type=chunk) - The Company maintains a reserve for obsolete inventory, which was **$300 thousand** as of June 30, 2025, up from $188 thousand at December 31, 2024[35](index=35&type=chunk) [NOTE 5 - COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=NOTE%205%20-%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company has operating leases for its main office, warehouse, R&D lab, engineering office, and sales office in Reno, Nevada, and a 64,000 sq ft facility in Fernley, Nevada[83](index=83&type=chunk)[84](index=84&type=chunk) - A lease amendment on May 8, 2025, extended the term for the R&D lab and engineering office until November 30, 2030, with a four-month rent abatement[85](index=85&type=chunk) Operating Lease Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | |---|---|---| | Operating lease right-of-use assets | $19,055 | $19,737 | | Total operating lease liabilities | $24,720 | $25,514 | | Weighted average remaining lease term | 8.09 years | 8.46 years | - In March 2025, the Company agreed to pay LithiumHub **$2.5 million** for a non-exclusive license to patent rights, settling ongoing patent litigation As of June 30, 2025, the accrued settlement liability is **$2.3 million** ($1.4 million current, $0.9 million non-current)[94](index=94&type=chunk) [NOTE 6 - LONG TERM DEBT](index=23&type=section&id=NOTE%206%20-%20LONG%20TERM%20DEBT) - The Term Loan Agreement matures on October 7, 2027, and amortizes at **5% per annum** starting October 2024[96](index=96&type=chunk) - Interest accrual rates vary, with all outstanding balances payable entirely in cash from April 1, 2025, at adjusted SOFR plus a margin of **11.5% to 13.5%**[97](index=97&type=chunk) - The Fifth Amendment in February 2025 extended the loan's maturity to **October 2027**, deferred all principal and interest payments until **April 2026**, and removed all financial covenants except for a **$2.5 million minimum cash requirement**, allowing debt reclassification to long-term[103](index=103&type=chunk) Future Debt Maturities (in thousands) | For Year Ended December 31, | Amount | |---|---| | 2025 | $- | | 2026 | $2,813 | | 2027 | $98,429 | | Total debt | $101,242 | | Less: Estimated interest paid-in-kind | $(8,023) | | Less: Unamortized debt discount costs | $(54,179) | | Total carrying amount | $39,040 | | Less: Current portion of debt | $(393) | | Total long-term debt | $38,647 | [NOTE 7 - LICENSE AGREEMENT](index=25&type=section&id=NOTE%207%20-%20LICENSE%20AGREEMENT) - On July 29, 2024, Legacy Dragonfly granted Stryten Energy LLC an exclusive, worldwide license to use **Battle Born Batteries®** trademarks for B2B sales in specific markets (automotive, marine, powersports, lawn and garden, golf cart, military and defense)[106](index=106&type=chunk) - Stryten paid an initial licensing fee of **$5,000 thousand**, recognized as revenue on a straight-line basis over five years[106](index=106&type=chunk) - The Company recorded **$250 thousand** and **$500 thousand** in revenue from the license agreement for the three and six months ended June 30, 2025, respectively[106](index=106&type=chunk) - As of June 30, 2025, deferred revenue related to the license agreement was **$4,083 thousand** ($1,000 thousand short-term, $3,083 thousand long-term)[106](index=106&type=chunk) [NOTE 8 - RELATED PARTY](index=25&type=section&id=NOTE%208%20-%20RELATED%20PARTY) - In January and February 2024, the Company entered into convertible promissory notes totaling **$2,700 thousand** with a board member, which were repaid with associated loan fees[107](index=107&type=chunk)[108](index=108&type=chunk) - Effective April 12, 2024, employment agreements with the CEO, CRO, and CMO were amended to allow for annual equity compensation[109](index=109&type=chunk) - Dr Vickram Singh was appointed Chief Operating Officer on February 1, 2025, with an initial annual base salary of **$350 thousand** and a discretionary annual bonus[110](index=110&type=chunk) [NOTE 9 - WARRANTS](index=26&type=section&id=NOTE%209%20-%20WARRANTS) - Public Warrants (**1,046,948 outstanding**) and Underwriters' Warrants (**63,362 outstanding**) are classified as equity[112](index=112&type=chunk)[116](index=116&type=chunk) - Private Placement Warrants and Term Loan Warrants are classified as **liabilities** and are subject to re-measurement at fair value each reporting period[117](index=117&type=chunk)[119](index=119&type=chunk)[127](index=127&type=chunk) - Term Loan Warrants (Penny Warrants) were issued in connection with waivers for non-compliance with financial covenants, with exercise prices ranging from **$0.01 to $0.09 per share**[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[126](index=126&type=chunk) Warrants Outstanding Roll-Forward (January 1, 2025 to June 30, 2025) | Warrant Type | Warrants Outstanding, Jan 1, 2025 | Warrants Issued | Warrants Outstanding, June 30, 2025 | |---|---|---|---| | Private Warrants | 166,821 | - | 166,821 | | Public Warrants | 1,046,948 | - | 1,046,948 | | Term Loan Warrants | 1,412,147 | 330,000 | 1,742,147 | | Investor Warrants | 1,236,878 | - | 1,236,878 | - Private Placement Convertible Preferred Warrants, issued in February 2025, were **cancelled on June 23, 2025**, and are no longer outstanding[134](index=134&type=chunk)[135](index=135&type=chunk) [NOTE 10 - REDEEMABLE CONVERTIBLE PREFERRED STOCK](index=32&type=section&id=NOTE%2010%20-%20REDEEMABLE%20CONVERTIBLE%20PREFERRED%20STOCK) - In February 2025, the Company sold 350 shares of Series A Preferred Stock and 20 Private Placement Convertible Preferred Warrants, raising approximately **$3.2 million** in net proceeds[139](index=139&type=chunk) - In April 2025, an additional 450 shares of Series A Preferred Stock were sold in a second closing, generating **$4.2 million** in net proceeds[140](index=140&type=chunk) - Series A Preferred Stock holders are entitled to **8% annual dividends**, convertible into common stock at varying conversion prices and subject to a Floor Price[145](index=145&type=chunk)[150](index=150&type=chunk)[153](index=153&type=chunk) - From issuance through June 30, 2025, 664 shares of Series A Preferred Stock were converted into **29,996,775 shares of common stock**, reclassifying **$6,085 thousand** from mezzanine equity[167](index=167&type=chunk) - Subsequent to June 30, 2025, all remaining 136 shares of Series A Preferred Stock were exchanged for **2,100,000 shares of common stock**, and no Series A Preferred Stock remained outstanding[168](index=168&type=chunk)[222](index=222&type=chunk) [NOTE 11 - COMMON STOCK](index=37&type=section&id=NOTE%2011%20-%20COMMON%20STOCK) - No dividends on common stock have been declared by the Company[173](index=173&type=chunk) Shares of Common Stock Reserved for Issuance (in thousands) | Category | June 30, 2025 | June 30, 2024 | |---|---|---| | Options issued and outstanding | 158,247 | 212,091 | | Common stock outstanding | 37,426,379 | 6,818,626 | | Warrants outstanding | 4,256,156 | 3,240,917 | | Earnout shares | 2,777,778 | 2,777,778 | | Series Preferred Stock A outstanding | 2,317,840 | - | | Shares available for future issuance | 1,189,254 | 995,237 | | Total | 48,125,654 | 14,044,649 | - Under the ChEF Equity Facility, the Company has the right to sell up to **$150 million** of common stock to CCM LLC For the six months ended June 30, 2025, 23,160 shares were issued for **$63 thousand** net proceeds[175](index=175&type=chunk) [NOTE 12 - STOCK-BASED COMPENSATION](index=38&type=section&id=NOTE%2012%20-%20STOCK-BASED%20COMPENSATION) - Share-based compensation expense for options and RSUs totaled **$410 thousand** for the six months ended June 30, 2025, a decrease from $503 thousand in the prior year[179](index=179&type=chunk) Stock-Based Compensation Expense Allocation (in thousands) | Expense Category | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |---|---|---| | Cost of goods sold | $35 | $60 | | Research and development | $26 | $101 | | Selling and marketing | $124 | $127 | | General and administrative | $225 | $215 | | Total | $410 | $503 | - The ESPP allows eligible employees to purchase common stock at a discount For the six months ended June 30, 2025, 87,506 shares were issued for **$73 thousand**[191](index=191&type=chunk) Restricted Stock Units Activity (6 months ended June 30, 2025) | RSU Activity | Number of Shares | |---|---| | Unvested shares, January 1, 2025 | 334,751 | | Granted and unvested | 4,667 | | Forfeited | (58,504) | | Vested | (85,036) | | Unvested shares, June 30, 2025 | 195,878 | [NOTE 13 - SUPPLIER AGREEMENT](index=40&type=section&id=NOTE%2013%20-%20SUPPLIER%20AGREEMENT) - On May 9, 2023, the Company announced a commercial offtake agreement with Ioneer Rhyolite Ridge LLC, a lithium-boron producer[192](index=192&type=chunk) - The agreement involves the Company purchasing product from the seller, with a minimum annual purchase requirement, once the Rhyolite Ridge Project is completed and commissioned[192](index=192&type=chunk) [NOTE 14 - REPORTABLE SEGMENTS](index=41&type=section&id=NOTE%2014%20-%20REPORTABLE%20SEGMENTS) - The Company operates two reportable segments: **DTC** (Battle Born branded batteries sold directly to consumers) and **OEM** (Dragonfly branded batteries sold to original equipment manufacturers)[194](index=194&type=chunk) Reportable Segments Net Sales (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |---|---|---|---|---| | DTC Net Sales | $5,947 | $6,534 | $10,963 | $11,737 | | OEM Net Sales | $10,051 | $6,674 | $18,141 | $13,976 | | Licensing Revenue | $250 | $- | $500 | $- | | Total Net Sales | $16,248 | $13,208 | $29,604 | $25,713 | - For the six months ended June 30, 2025, **OEM net sales increased by 29.8%** to $18,141 thousand, while **DTC net sales decreased by 6.6%** to $10,963 thousand, compared to the prior year[200](index=200&type=chunk)[206](index=206&type=chunk) - A single customer in the OEM segment accounted for approximately **26% of consolidated revenues** for the six months ended June 30, 2025, and **32%** for the three months ended June 30, 2025[203](index=203&type=chunk)[215](index=215&type=chunk) [NOTE 15 - SUBSEQUENT EVENTS](index=49&type=section&id=NOTE%2015%20-%20SUBSEQUENT%20EVENTS) - On July 20, 2025, the Company entered into a Settlement and Release Agreement with the holder of Series A Preferred Stock, issuing **2,100,000 shares of common stock** in exchange for all outstanding Series A Preferred Stock, which were then cancelled[222](index=222&type=chunk) - On July 31, 2025, the Company completed a public offering of **21,980,000 shares of common stock** at $0.25 per share, raising gross proceeds of approximately **$5.5 million** and net proceeds of **$5.035 million**[223](index=223&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, key operational factors, liquidity, and critical accounting estimates [Overview](index=51&type=section&id=Overview) - The Company manufactures non-toxic deep cycle lithium-ion batteries for consumer (RV, marine, solar, off-grid) and commercial (trucking, industrial, energy storage) markets[232](index=232&type=chunk) - Net sales for the three months ended June 30, 2025, were **$16.2 million** (12,134 batteries sold), up from $13.2 million (11,526 batteries sold) in the prior year[233](index=233&type=chunk) - The increase in sales reflects a slight recovery in the motorized RV market and increased market penetration, with lithium storage system incorporation accelerating faster than RV unit shipments[234](index=234&type=chunk) - The company is prioritizing product development over solid-state R&D, accelerating solutions for trucking and industrial markets, including the recent launch of the Battle Born DualFlow Power Pack[236](index=236&type=chunk) - The company is developing proprietary dry electrode cell manufacturing processes and solid-state cell technology, having successfully produced anode and cathode material at scale[239](index=239&type=chunk)[240](index=240&type=chunk) [License Agreement with Stryten](index=53&type=section&id=License%20Agreement%20with%20Stryten) - On July 29, 2024, Battle Born LLC granted Stryten Energy LLC an exclusive, worldwide license to use **Battle Born Batteries®** trademarks for B2B sales in specific markets (automotive, marine, powersports, lawn and garden, golf cart, military and defense)[243](index=243&type=chunk) - Stryten paid an initial licensing fee of **$5,000,000** and will make mid-single digit royalty payments based on net sales, capped at **$25,000,000**[243](index=243&type=chunk)[244](index=244&type=chunk) - The License Agreement is perpetual unless terminated under specific conditions, such as failure to pay royalties or material breach[244](index=244&type=chunk) [Earnout Merger Consideration](index=53&type=section&id=Earnout%20Merger%20Consideration) - Up to **4,444,445 additional common shares** (Earnout Shares) may be issued based on achieving specified milestones in three tranches[245](index=245&type=chunk) - The first tranche (1,666,667 shares) for 2023 revenue/operating income was **not achieved**[247](index=247&type=chunk) - Second and third tranches are tied to common stock volume-weighted average trading prices of **$202.50** (by Dec 31, 2026) and **$292.50** (by Dec 31, 2028), respectively[247](index=247&type=chunk) [ChEF Equity Facility](index=53&type=section&id=ChEF%20Equity%20Facility) - The Company has a ChEF Equity Facility with Chardan Capital Markets LLC (CCM LLC) to sell up to **$150 million** of common stock[246](index=246&type=chunk) - The ChEF Purchase Agreement terminates in December 2025[246](index=246&type=chunk) - In connection with the 2025 Public Offering, the Company agreed not to sell common stock under this facility for 90 days following the offering's closing[246](index=246&type=chunk) [Private Placements and Term Loan Amendments (May 2024 - February 2025)](index=54&type=section&id=Private%20Placements%20and%20Term%20Loan%20Amendments%20(May%202024%20-%20February%202025)) - Multiple waivers were obtained from Term Loan Lenders for non-compliance with financial covenants (liquidity, fixed charge coverage ratio, maximum senior leverage ratio) from May 2024 through February 2025[248](index=248&type=chunk)[249](index=249&type=chunk)[255](index=255&type=chunk) - In connection with these waivers, the Company issued various tranches of **'Penny Warrants'** to Term Loan Lenders, with exercise prices ranging from **$0.01 to $0.09 per share**[248](index=248&type=chunk)[249](index=249&type=chunk)[255](index=255&type=chunk) - The Fifth Amendment to the Term Loan Agreement (February 2025) extended the maturity date to **October 2027**, deferred all principal and interest payments until **April 2026**, and removed most financial covenants (except for a **$2.5 million minimum cash requirement**) through June 30, 2026[267](index=267&type=chunk) - In February 2025, the Company completed a Registered Direct Offering and Private Placement of Series A Preferred Stock, raising **$3.2 million net proceeds**, followed by a Second Closing in April 2025, raising an additional **$4.2 million net proceeds**[261](index=261&type=chunk)[262](index=262&type=chunk)[265](index=265&type=chunk) - Private Placement Convertible Preferred Warrants, issued in February 2025, were **cancelled on June 23, 2025**[270](index=270&type=chunk) - On July 20, 2025, all outstanding Series A Preferred Stock was exchanged for **2,100,000 shares of common stock**, terminating related agreements[271](index=271&type=chunk) [Change in Board of Directors](index=58&type=section&id=Change%20in%20Board%20of%20Directors) - In May 2025, Dr Karina Montilla Edmonds, Mr Jonathan Bellows, and Rick Parod resigned from the Board of Directors as part of expense reduction efforts[273](index=273&type=chunk) - The Board of Directors was reduced to five members, and currently has four directors[273](index=273&type=chunk) [2025 Public Offering](index=58&type=section&id=2025%20Public%20Offering) - On July 31, 2025, the Company completed an underwritten public offering of **21,980,000 shares of common stock** at $0.25 per share[274](index=274&type=chunk) - The offering raised gross proceeds of approximately **$5.5 million** and net proceeds of **$5.035 million**[274](index=274&type=chunk) [Key Factors Affecting Our Operating Results](index=58&type=section&id=Key%20Factors%20Affecting%20Our%20Operating%20Results) - Demand for products is driven by consumers in end markets (RV, marine, solar, off-grid) and OEMs, with RV OEM sales expected to grow due to increased RV shipments and battery system inclusion[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) - DTC sales remained relatively flat due to macroeconomic conditions and increased competition, addressed by product diversification and targeted marketing[277](index=277&type=chunk) - The company relies on a limited number of China-based suppliers for LFP cells and a single supplier for its battery management system, managing costs through inventory building and long-term relationships[279](index=279&type=chunk) - Product and customer mix (DTC vs OEM, LFP batteries vs accessories) impacts average selling prices and gross margins, with OEM sales typically having lower margins but higher volumes[281](index=281&type=chunk) - All battery assembly occurs at the Reno, Nevada facility, with capacity for additional LFP production lines and a solid-state cell pilot line, focusing on automation to reduce costs[282](index=282&type=chunk) - Competition comes from traditional lead-acid and lithium-ion battery manufacturers, with a wider range expected as the company expands into new markets and develops its own cells[283](index=283&type=chunk) [Components of Results of Operations](index=60&type=section&id=Components%20of%20Results%20of%20Operations) - Net sales are primarily from LFP batteries sold to OEMs and consumers, and chargers/accessories[285](index=285&type=chunk) - Cost of goods sold includes cell/component costs, labor, overhead, logistics, freight, and manufacturing equipment depreciation[286](index=286&type=chunk) - Operating expenses comprise Research and Development (personnel, materials for new products/solid-state tech), General and Administrative (executive, finance, HR, IT, facility, professional fees), and Selling and Marketing (outbound freight, personnel, events, marketing, customer support)[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) - Other income (expense) primarily includes interest expense, change in fair value of warrant liability, and amortization of debt issuance costs[291](index=291&type=chunk) [Results of Operations](index=60&type=section&id=Results%20of%20Operations) [Three months ended June 30, 2025, and June 30, 2024](index=60&type=section&id=Three%20months%20ended%20June%2030%2C%202025%2C%20and%20June%2030%2C%202024) Key Financials (Three Months Ended June 30, in thousands) | Metric | 2025 | % Net Sales | 2024 | % Net Sales | Change ($) | Change (%) | |---|---|---|---|---|---|---| | Net Sales | $16,248 | 100.0% | $13,208 | 100.0% | $3,040 | 23.0% | | Cost of Goods Sold | $11,643 | 71.7% | $10,041 | 76.0% | $1,602 | 16.0% | | Gross Profit | $4,605 | 28.3% | $3,167 | 24.0% | $1,438 | 45.4% | | Research and development | $692 | 4.3% | $1,531 | 11.6% | $(839) | (54.7%) | | General and administrative | $4,619 | 28.4% | $5,704 | 43.2% | $(1,085) | (19.0%) | | Selling and marketing | $2,575 | 15.8% | $2,681 | 20.3% | $(106) | (4.0%) | | Loss From Operations | $(3,281) | (20.2%) | $(6,749) | (51.1%) | $3,468 | (51.4%) | | Interest expense, net | $(5,442) | (33.5%) | $(4,878) | (37.0%) | $(564) | 11.6% | | Change in fair market value of warrant liability | $1,689 | 10.4% | $(1,981) | (15.0%) | $3,670 | (185.3%) | | Net Loss | $(7,034) | (43.3%) | $(13,627) | (103.2%) | $6,593 | (48.4%) | - Net sales increased by **$3.0 million (23.0%)** due to higher OEM battery and accessory sales and licensing revenue[296](index=296&type=chunk) - Gross profit increased by **$1.4 million (45.4%)** due to higher unit volume, partially offset by consuming lower-priced inventory[298](index=298&type=chunk) - Research and development expenses decreased by **$0.8 million (54.7%)** due to lower wage expense from bonus accrual changes and reduced headcount, shifting focus from Solid State to Product Development[299](index=299&type=chunk) - General and administrative expenses decreased by **$1.1 million (19.0%)** primarily due to a $1.5 million decrease in legal and professional services[300](index=300&type=chunk) - Net loss improved by **$6.6 million (48.4%)** to **$(7.0) million**, driven by higher sales, lower operating expenses, and a positive change in warrant liability fair value[304](index=304&type=chunk) [Six months ended June 30, 2025 and June 30, 2024](index=63&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) Key Financials (Six Months Ended June 30, in thousands) | Metric | 2025 | % Net Sales | 2024 | % Net Sales | Change ($) | Change (%) | |---|---|---|---|---|---|---| | Net Sales | $29,604 | 100.0% | $25,713 | 100.0% | $3,891 | 15.1% | | Cost of Goods Sold | $21,071 | 71.2% | $19,495 | 75.8% | $1,576 | 8.1% | | Gross Profit | $8,533 | 28.8% | $6,218 | 24.2% | $2,315 | 37.2% | | Research and development | $1,692 | 5.7% | $2,864 | 11.1% | $(1,172) | (40.9%) | | General and administrative | $10,976 | 37.1% | $10,517 | 40.9% | $459 | 4.4% | | Sales and marketing | $5,060 | 17.1% | $5,425 | 21.1% | $(365) | (6.7%) | | Loss From Operations | $(9,195) | (31.1%) | $(12,588) | (48.9%) | $3,393 | (26.9%) | | Interest expense, net | $(10,143) | (34.3%) | $(9,638) | (37.5%) | $(505) | 5.2% | | Change in fair market value of warrant liability | $5,507 | 18.6% | $(1,745) | (6.8%) | $7,252 | (415.6%) | | Net Loss | $(13,831) | (46.7%) | $(23,994) | (93.3%) | $10,163 | (42.4%) | - Net sales increased by **$3.9 million (15.1%)** due to higher OEM battery and accessory sales and licensing revenue, despite a decrease in DTC sales[308](index=308&type=chunk) - Gross profit increased by **$2.3 million (37.2%)** due to higher unit volume, partially offset by consuming lower-priced inventory[310](index=310&type=chunk) - Research and development expenses decreased by **$1.2 million (40.9%)** due to lower wage expense, reduced headcount, and decreased rent, travel, and supplies[311](index=311&type=chunk) - Net loss improved by **$10.2 million (42.4%)** to **$(13.8) million**, driven by higher sales, lower operating expenses, and a positive change in warrant liability fair value[317](index=317&type=chunk) [Critical Accounting Estimates](index=65&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include inventory valuation (reserves for excess/obsolete items), warrants (fair value classification and measurement), equity-based compensation (Black-Scholes assumptions), income taxes (deferred tax assets, valuation allowance, uncertain tax positions), leases (incremental borrowing rate for ROU assets/liabilities), license arrangements (revenue recognition pattern for upfront fees), and tariffs (classification and valuation of imported components)[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - Management's judgments and estimates are based on historical experience, known trends, and other reasonable factors, with actual results potentially differing[318](index=318&type=chunk) - Changes in assumptions for fair value estimates (warrants, equity-based compensation) could result in materially different financial results[324](index=324&type=chunk)[325](index=325&type=chunk) [Non-GAAP Financial Measures](index=68&type=section&id=Non-GAAP%20Financial%20Measures) - The Company uses **Adjusted EBITDA**, a non-GAAP measure, to supplement U.S GAAP results, defined as EBITDA adjusted for stock-based compensation, change in fair market value of warrant liabilities, non-recurring costs (litigation, tariff adjustments, financing expenses, reverse stock split)[333](index=333&type=chunk) - Adjusted EBITDA is used to illustrate underlying financial and business trends and enhance comparability between periods[333](index=333&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |---|---|---|---|---| | Net loss | $(7,034) | $(13,627) | $(13,831) | $(23,994) | | Interest Expense | $5,442 | $4,878 | $10,143 | $9,638 | | Depreciation and Amortization | $491 | $331 | $1,350 | $663 | | EBITDA | $(1,101) | $(8,418) | $(2,338) | $(13,693) | | Stock-Based Compensation | $190 | $237 | $411 | $503 | | Change in fair market value of warrant liability | $(1,689) | $1,981 | $(5,507) | $1,745 | | Litigation Fees and loss on settlement | $30 | $- | $573 | $- | | Prior year tariff estimate adjustment | $287 | $- | $287 | $- | | Preferred Stock Financing Expenses | $42 | $- | $673 | $- | | Reverse Stock Split | $- | $- | $15 | $- | | Adjusted EBITDA | $(2,241) | $(6,200) | $(5,886) | $(11,445) | [Liquidity and Capital Resources](index=70&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the Company had **$2.7 million** in cash and cash equivalents[338](index=338&type=chunk) - In February and April 2025, the Company raised **$7.4 million** in net proceeds from Series A Preferred Stock offerings[339](index=339&type=chunk) - On July 31, 2025, a public offering of common stock raised **$5.035 million** in net proceeds[340](index=340&type=chunk) - The Term Loan Agreement (totaling **$75 million principal**) was amended in February 2025 to extend maturity to **October 2027**, defer principal and interest payments to **April 2026**, and remove most financial covenants (except for a **$2.5 million minimum cash requirement**) through June 30, 2026[358](index=358&type=chunk) - Despite strategic initiatives and capital raises, management concluded there is **significant doubt** about the Company's ability to continue as a **going concern** due to ongoing losses, negative cash flow, and uncertainty regarding future revenue and financing[359](index=359&type=chunk)[361](index=361&type=chunk) - The Company expects to need additional debt and/or equity financing to fund operations, strategic plans, and meet financial covenants[342](index=342&type=chunk)[361](index=361&type=chunk) [Cash Flows for the Six months ended June 30, 2025, and June 30, 2024](index=74&type=section&id=Cash%20Flows%20for%20the%20Six%20months%20ended%20June%2030%2C%202025%2C%20and%20June%2030%2C%202024) Net Cash Flows (in thousands) | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | |---|---|---| | Operating Activities | $(7,865) | $(7,411) | | Investing activities | $(1,621) | $(1,324) | | Financing activities | $7,370 | $721 | - Net cash used in operating activities was **$7.9 million** for the six months ended June 30, 2025, primarily due to a net loss of $13.8 million, partially offset by $7.3 million in payment-in-kind interest[364](index=364&type=chunk) - Net cash provided by financing activities was **$7.4 million** for the six months ended June 30, 2025, mainly from $7.3 million in net proceeds from the February 2025 Purchase Agreement[367](index=367&type=chunk) - Net cash used in investing activities increased to **$1.6 million**, primarily due to increased capital expenses for the core battery business[366](index=366&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the reporting period - This item is not applicable for the current reporting period[369](index=369&type=chunk) [Item 4. Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025 - Management concluded that the Company maintained **effective disclosure controls and procedures** as of June 30, 2025[371](index=371&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[372](index=372&type=chunk) [PART II. OTHER INFORMATION](index=76&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The Company is not currently a party to any litigation or legal proceedings expected to have a **material adverse effect** on its business[374](index=374&type=chunk) - Litigation, regardless of outcome, can adversely impact the company due to defense/settlement costs and diversion of management resources[374](index=374&type=chunk) [Item 1A. Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) The company is not in compliance with Nasdaq's listing requirements but has been granted an exception until November 10, 2025 - No material changes to previously disclosed risk factors in the Annual Report on Form 10-K, except for those noted[376](index=376&type=chunk) - The Company is **not in compliance** with Nasdaq's continued listing requirements for Market Value of Listed Securities ($35 million) and minimum bid price ($1.00)[377](index=377&type=chunk)[378](index=378&type=chunk) - Nasdaq granted an exception until **November 10, 2025**, to regain compliance, subject to achieving milestones including conversion of Series A Preferred Stock (completed) and debt restructuring/conversion[380](index=380&type=chunk) - Failure to regain compliance could lead to **delisting**, adversely affecting stock price, liquidity, financing ability, and investor confidence[380](index=380&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds for the period - None reported for the period[381](index=381&type=chunk) [Item 3. Defaults Upon Senior Securities](index=77&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates no defaults upon senior securities during the reporting period - None reported for the period[382](index=382&type=chunk) [Item 4. Mine Safety Disclosures](index=77&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Not applicable[383](index=383&type=chunk) [Item 5. Other Information](index=78&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[384](index=384&type=chunk) [Item 6. Exhibits](index=78&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with or incorporated by reference into the Form 10-Q - This section lists exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including Articles of Incorporation, Bylaws, Settlement and Mutual Release Agreement, Certifications, and XBRL documents[385](index=385&type=chunk)[386](index=386&type=chunk) [Signatures](index=79&type=section&id=Signatures) The report was signed by the Chief Executive Officer, President, and Interim Chief Financial Officer - The report was signed on August 14, 2025, by Denis Phares, Chief Executive Officer, President, and Interim Chief Financial Officer[390](index=390&type=chunk)

Core Insights - Dragonfly Energy Holdings Corp. reported a strong second quarter with net sales increasing by 23% year-over-year, driven by a 50.6% growth in OEM sales despite economic uncertainties [2][4][6] - The company is focused on optimizing its operations and strengthening its balance sheet, which includes the recent exchange of preferred shares and a public offering to enhance financial flexibility [2][5][9] - For the third quarter, the company anticipates net sales of approximately $15.9 million, representing a projected 25% year-over-year increase [9][10] Financial Highlights - Net sales for the second quarter of 2025 were $16.2 million, compared to $13.2 million in the prior year, marking a 23% increase [4][6] - OEM sales reached $10.1 million, up from $6.7 million, while DTC sales decreased by 9% to $5.9 million due to macroeconomic pressures [4][6] - Gross profit increased by 45.4% to $4.6 million, with a gross margin expansion of 430 basis points to 28.3% [5][6] - Operating expenses decreased to $7.9 million from $9.9 million, primarily due to lower R&D costs [5][6] Loss and Adjusted EBITDA - The company reported a net loss of $(7.0) million, an improvement from a net loss of $(13.6) million in the previous year [7][28] - Adjusted EBITDA was $(2.2) million, compared to $(6.2) million in the prior year, indicating improved operational performance [6][7] Strategic Outlook - The company emphasizes the effectiveness of its strategic initiatives and the sustained market demand for its energy storage solutions [9] - Dragonfly Energy is well-positioned for continued growth, supported by deepening customer relationships and operational efficiency [9]

Company Overview - Dragonfly Energy has generated over $350 million in revenue from 2020 through Q2 2025[11], selling over 400,000 lithium-ion batteries[11] - The company has a domestic manufacturing footprint with a 400,000 sq ft Nevada facility[9] - Dragonfly Energy has secured over 90 patents granted, filed, or pending globally[55] Market Position and Growth - The company is a commercial leader in deep cycle lithium-ion energy storage solutions[15] - Dragonfly Energy is well-positioned in expanding, high-growth markets including RV, Marine, Off-Grid, Trucking, and Industrial sectors[16] - The company is targeting a total addressable market of $56.8 billion across its core markets[74] - The leisure electrification market size is $1.7 billion[35], the heavy-duty trucking market is $1.2 billion[37], and the industrial & remote power market is $53.9 billion[40] Financial Performance and Outlook - Q2 2025 net sales growth was 23% year-over-year to $16.2 million[70] - The company is targeting adjusted EBITDA breakeven by Q4 2025[70]

Core Viewpoint - Dragonfly Energy Holdings Corp. announced a public offering of 21,980,000 shares at $0.25 per share, aiming for gross proceeds of approximately $5.5 million, with the offering expected to close around July 31, 2025 [1][2]. Group 1: Offering Details - The offering is underwritten by Canaccord Genuity, which is acting as the sole bookrunner [2]. - The net proceeds from the offering will be used for working capital, general corporate purposes, and repayment of indebtedness [2]. - The offering is made under a shelf registration statement declared effective by the SEC on November 24, 2023 [3]. Group 2: Company Overview - Dragonfly Energy is a leader in lithium battery technology, specializing in cell manufacturing, battery pack assembly, and full system integration [5]. - The company’s Battle Born Batteries® brand has established a strong presence in the lithium battery industry, with numerous battery packs deployed through top-tier OEMs and a diverse retail customer base [5]. - Dragonfly Energy is at the forefront of domestic lithium battery cell production, utilizing a patented dry electrode manufacturing process for various applications, including energy storage systems and electric vehicles [5].

Core Viewpoint - Dragonfly Energy Holdings Corp. has initiated an underwritten public offering of its common stock and pre-funded warrants, with the intention to use the proceeds for working capital and debt repayment [1][2]. Group 1: Offering Details - The company is offering common stock and pre-funded warrants, with a potential 30-day option for underwriters to purchase an additional 15% of the securities at the public offering price [1]. - The offering is subject to market conditions, and there is no guarantee regarding its completion or the final terms [1]. Group 2: Financial and Corporate Use of Proceeds - The net proceeds from the offering will be utilized for working capital and general corporate purposes, including repayment of existing debt [2]. Group 3: Company Background - Dragonfly Energy is a leader in lithium battery technology, focusing on cell manufacturing, battery pack assembly, and system integration [5]. - The company is known for its Battle Born Batteries® brand and has a significant presence in the lithium battery industry, with a patented dry electrode manufacturing process [5]. - Dragonfly Energy aims to advance clean energy solutions through the development of nonflammable, all-solid-state battery cells [5].

[General Filing Information](index=1&type=section&id=General%20Filing%20Information) [Registrant and Filing Details](index=1&type=section&id=Registrant%20and%20Filing%20Details) This section provides the basic identification information for Dragonfly Energy Holdings Corp. as the registrant, including its address, contact number, and the date of the report - Registrant: **DRAGONFLY ENERGY HOLDINGS CORP.**[1](index=1&type=chunk) - Date of Report (earliest event reported): **July 29, 2025**[1](index=1&type=chunk) - Address: **12915 Old Virginia Road, Reno, Nevada 89521**[1](index=1&type=chunk) [Securities Registered](index=1&type=section&id=Securities%20Registered) The company's common stock and redeemable warrants are registered on The Nasdaq Capital Market | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $0.0001 per share | DFLI | The Nasdaq Capital Market | | Redeemable warrants, exercisable for common stock | DFLIW | The Nasdaq Capital Market | [Emerging Growth Company Status](index=1&type=section&id=Emerging%20Growth%20Company%20Status) Dragonfly Energy Holdings Corp. has indicated its status as an emerging growth company - The registrant is an **emerging growth company**[3](index=3&type=chunk) [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) [Preliminary Financial Results Announcement](index=2&type=section&id=Preliminary%20Financial%20Results%20Announcement) Dragonfly Energy Holdings Corp. announced the issuance of a press release containing preliminary financial results for the quarter ended June 30, 2025 - On **July 29, 2025**, Dragonfly Energy Holdings Corp. issued a press release containing certain preliminary financial results for the quarter ended **June 30, 2025**[4](index=4&type=chunk) - The press release is furnished as **Exhibit 99.1**[4](index=4&type=chunk) [Item 8.01 Other Events](index=2&type=section&id=Item%208.01%20Other%20Events) [New Patent Grant](index=2&type=section&id=New%20Patent%20Grant) The Company was granted a new patent for an innovative powderized ionically conducting feedstock, crucial for constructing solid-state electrochemical cells with enhanced safety, thermal stability, and high energy density, enabling scalable manufacturing of next-generation batteries - The Company was issued a new patent covering **powderized ionically conducting feedstock** for solid-state electrochemical cells[6](index=6&type=chunk) - This technology incorporates a **non-flammable, lithium-conductive composite electrolyte**, enabling high-performance cycling without traditional liquid or gel polymer electrolytes[6](index=6&type=chunk) - Innovations are designed to enhance **safety and thermal stability**, support **scalable manufacturing** of next-generation battery cells, and allow for **high energy density** adaptable to various lithium-ion chemistries[6](index=6&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) [Exhibits List](index=2&type=section&id=Exhibits%20List) This section lists the exhibits furnished with the Form 8-K, including the press release detailing preliminary financial results and the interactive data file | Exhibit No. | Description | | :---------- | :---------- | | 99.1 | Press Release of Dragonfly Energy Holdings Corp., dated July 29, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [Signature](index=3&type=section&id=Signature) [Authorized Signature](index=3&type=section&id=Authorized%20Signature) The report was duly signed on behalf of Dragonfly Energy Holdings Corp. by Denis Phares, Chief Executive Officer, Interim Chief Financial Officer, and President - Report signed by **Denis Phares**, Chief Executive Officer, Interim Chief Financial Officer and President[11](index=11&type=chunk) - Dated: **July 29, 2025**[11](index=11&type=chunk)

Core Insights - Dragonfly Energy Holdings Corp. reported strong preliminary second quarter 2025 net sales growth of 23% year-over-year, with anticipated net sales of $16.2 million and an adjusted EBITDA loss of $(2.2) million, both exceeding previous guidance [2][3][4] Financial Performance - The anticipated net sales of $16.2 million represent a 23% increase compared to the same quarter last year [2] - Adjusted EBITDA is expected to improve by approximately $4 million from the previous year, indicating a reduction in losses [2][3] Management Commentary - The CEO, Dr. Denis Phares, expressed satisfaction with the preliminary results, highlighting consecutive quarters of net sales growth and a reduction in adjusted EBITDA loss [3] - The company recently exchanged shares of common stock for all remaining shares of preferred stock, enhancing operational flexibility and supporting future growth [3] Company Overview - Dragonfly Energy specializes in lithium battery technology, including cell manufacturing and battery pack assembly, and is recognized for its Battle Born Batteries® brand [7] - The company aims to lead in domestic lithium battery cell production and is focused on developing nonflammable, all-solid-state battery cells for various applications [7]

Core Viewpoint - Dragonfly Energy Holdings Corp. has entered into a Settlement and Mutual Release Agreement to eliminate all outstanding shares of its Series A Convertible Preferred Stock, enhancing its financial flexibility and capital structure [1][2][3] Financial Impact - The company will issue 2,100,000 shares of common stock in exchange for the surrender of all outstanding Series A Preferred Stock, fully satisfying its obligations under related agreements [2] - This strategic move is expected to remove potential future dilution concerns and improve the company's capital structure [3] Company Overview - Dragonfly Energy is a leader in energy storage and battery technology, specializing in lithium battery manufacturing and system integration [5] - The company is known for its Battle Born Batteries® brand and has established a strong presence in the lithium battery industry with a diverse customer base [5] - Dragonfly Energy aims to advance clean energy technologies, focusing on the development of nonflammable, all-solid-state battery cells [5]