Dragonfly Energy(DFLI)2025-05-16 21:09Sales Performance - Dragonfly Energy sold over 340,000 batteries since 2020, with net sales of $13.4 million and $12.5 million for the quarters ended March 31, 2025, and March 31, 2024, respectively [215]. - The company experienced a slight recovery in the RV market, with a year-over-year increase in lithium storage system incorporation, despite flat DTC sales [216]. - Net sales increased by $0.9 million, or 6.8%, to $13.4 million for the quarter ended March 31, 2025, compared to $12.5 million for the same period in 2024, driven by higher OEM battery and accessory sales [272]. - Direct-to-consumer (DTC) sales were $5.0 million, representing 37.5% of net sales, while OEM sales were $8.1 million, accounting for 60.6% of net sales for the quarter ended March 31, 2025 [271]. - The company expects sales to increase as the cyclical recovery of the RV market gains momentum and as it enters new markets such as trucking and industrials [272]. Financial Performance - As of March 31, 2025, Dragonfly Energy had cash totaling $2.8 million and reported a net loss of $6.8 million for the quarter, compared to a net loss of $10.4 million for the same quarter in 2024 [223]. - The net loss for the quarter ended March 31, 2025, was $6.8 million, an improvement from a net loss of $10.4 million for the same quarter in 2024 [280]. - Adjusted EBITDA for the quarter ended March 31, 2025, was $(3.646) million, compared to $(5.245) million for the same quarter in 2024 [296]. - The company reported a net cash used in operating activities of $4.5 million for the three months ended March 31, 2025, compared to $3.4 million for the same period in 2024, primarily due to a net loss of $6.8 million in 2025 [323][324]. - General and administrative expenses increased by $1.5 million, or 32.1%, to $6.4 million for the quarter ended March 31, 2025, compared to $4.8 million for the same quarter in 2024 [276]. Capital and Financing - The company completed the initial offering of Series A Preferred Stock in February 2025, raising $3.2 million, followed by a second closing that raised an additional $4.2 million [223]. - Dragonfly Energy's ChEF Equity Facility allows for the sale of up to $150 million in common stock to maintain cash balances and support business growth [227]. - The company issued $45 million of fixed rate senior notes and entered into a $75 million senior secured term loan facility as part of the Business Combination [302]. - The liquidity requirement under the Term Loan was reduced to $3.5 million as of June 30, 2024, and $10 million thereafter [231]. - The company may need to raise additional debt and/or equity financing to fund operations and strategic plans, with no guarantee of success in raising additional capital [321]. Operational Developments - Dragonfly Energy launched the Battle Born DualFlow Power Pack, targeting the trucking industry with a cost-effective hybrid electrification solution [218]. - The company has developed proprietary dry electrode cell manufacturing processes and solid-state cell technology, which are expected to differentiate its products in the energy storage market [221]. - The company is focused on optimizing solid-state cells and scaling production, with recent advancements in manufacturing processes demonstrated in 2023 [222]. - The company has signed a Commercial Offtake Agreement with a lithium mining company in Nevada to secure lithium supply for its solid-state cell production [258]. - The company plans to continue expanding into new end markets identified as opportunities for its LFP batteries, including rail, specialty vehicles, and solar integration [256]. Risks and Challenges - The company faces risks including reliance on a limited number of suppliers and potential impacts from global economic conditions [217]. - The company has significant doubt about its ability to continue as a going concern due to the lack of substantial proof of revenue projections for new markets and limited concessions from lenders [319]. - The independent registered public accounting firm included an explanatory paragraph in its report on the 2024 consolidated financial statements regarding the uncertainty of the company's financial condition [320]. - The company may be forced to reduce capital or operating expenditures if additional financing is not available, which could adversely affect its business and financial condition [321]. - The company has historically been able to raise additional capital through equity and/or debt financing, but future financings may be dilutive to current stockholders [321]. Amendments and Agreements - A License Agreement with Stryten was established, granting Stryten exclusive rights to use certain trademarks for a $5 million initial fee and mid-single digit royalties based on net sales [224][225]. - The first tranche of 1,666,667 shares was not issued as the 2023 total audited revenue did not reach $250 million and audited operating income did not reach $35 million [228]. - The second tranche of 1,388,889 shares is contingent upon the stock price reaching $202.50 over any 20 trading days by December 31, 2026 [228]. - The third tranche of 1,388,889 shares is contingent upon the stock price reaching $292.50 over any 20 trading days by December 31, 2028 [228]. - The Fifth Amendment to the Term Loan Agreement allows for no principal or interest payments through March 31, 2026, provided cash and cash equivalents are maintained at $2.5 million [248].