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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): November 13, 2023
DRAGONFLY
ENERGY HOLDINGS CORP.
(Exact
name of registrant as specified in its charter)
Nevada |
|
001-40730 |
|
85-1873463 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
1190
Trademark Drive, #108
Reno,
Nevada |
|
89521 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(775)
622-3448
Registrant’s
telephone number, including area code
N/A
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
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 Global Market |
Redeemable
warrants, exercisable for common stock at an exercise price of $11.50 per share, subject to adjustment |
|
DFLIW |
|
The
Nasdaq Capital Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition.
On
November 13, 2023, Dragonfly Energy Holdings Corp. (the “Company”) issued an earnings release disclosing certain information
regarding its results of operations for the third quarter ended September 30, 2023. Following the publication of the press release, the
Company will host an earnings call at 5:00 p.m. (Eastern Time) on November 13, 2023, via a webcast. During the webcast, the Company’s
financial results for the third quarter ended September 30, 2023 will be discussed. A copy of the press release is attached as Exhibit
99.1 to this Current Report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
See
“Item 2.02 Results of Operation and Financial Condition” above.
The
information in this Current Report on Form 8-K under Items 2.02 and 7.01, including the information contained in Exhibit 99.1, is being
furnished to the Securities and Exchange Commission (the “SEC”), and shall not be deemed to be “filed”
for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by a specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits.
Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
DRAGONFLY
ENERGY HOLDINGS CORP. |
|
|
|
Dated:
November 13, 2023 |
By: |
/s/
Denis Phares |
|
Name:
|
Denis
Phares |
|
Title: |
President,
Chief Executive Officer and Interim Chief Financial Officer |
Exhibit
99.1
Dragonfly
Energy Reports Third Quarter 2023 Financial and Operational Results
|
● |
Achieved
successful deposition of cathode electrodes, and double-sided dry deposition of both anode and cathode electrodes, at scale, using
the Company’s patented dry electrode battery manufacturing process |
|
|
|
|
● |
Dragonfly
Energy remains on track to achieve delivery of sample domestic battery cells, across a variety of lithium chemistries, to potential
customers by year end |
|
|
|
|
● |
Launched
new all-electric APU, a comprehensive solution to the trucking industry that enables compliance with increasing anti-idling regulations
while potentially saving billions of dollars in fuel costs, increasing uptime and payload, and reducing harmful emissions during
idle periods |
RENO,
NEVADA (November 13, 2023) — Dragonfly Energy Holdings Corp. (“Dragonfly Energy” or the “Company”)
(Nasdaq: DFLI), an industry leader in energy storage and producer of deep cycle lithium-ion storage batteries, today reported its financial
and operational results for the third quarter ended September 30, 2023.
Third
Quarter 2023 Financial Highlights
|
● |
Net
Sales were $15.9 million, compared to $26.1 million in Q3 2022 |
|
● |
Gross
Profit was $4.6 million, compared to $7.0 million in Q3 2022 |
|
● |
Operating
expenses were $(10.5) million, compared to $(10.4) million in Q3 2022 |
|
● |
Net
Loss of $(10.0) million, compared to a Net Loss of $(3.7) million in Q3 2022 |
|
● |
Diluted
Loss per share was $(0.17), compared to $(0.10) in Q3 2022 |
|
● |
Adjusted
EBITDA was $(4.6) million, compared to $(2.7) million in Q3 2022 |
Operational
and Business Highlights
|
● |
Announced
entrance into heavy-duty trucking market, with new Battle Born All-Electric APU (auxiliary power unit), enabling reduced fuel costs,
increased uptime and payload, and lower harmful emissions (link) |
|
● |
Announced
successful cathode electrode dry deposition, at scale, for American made lithium batteries (link) |
|
● |
Announced
successful manufacture of lithium battery cell using high-purity recycled battery materials (link) |
|
● |
Announced
expansion of business with new distributor and location in the Midwest (link) |
|
● |
Announced
new program win at nuCamp, continuing to gain share in the RV market (link) |
|
● |
Announced
U.S. Patent for innovative battery pack assembly design, enabling flexible custom installation solutions and increased energy density
(link) |
“We
have achieved a number of important milestones since our last call, including new customer wins within the RV market and the launch of
our new all-electric APU, furthering our expansion efforts into the heavy-duty and fleet trucking markets. On the technology front, we
completed our domestic cell manufacturing pilot line and announced the successful production of both anode and cathode material at scale,
putting us on track to deliver sample battery cells using our patented dry electrode manufacturing process to prospective customers,
by year end,” said Denis Phares, Chief Executive Officer of Dragonfly Energy. “While recent financial results continue to
experience near-term market headwinds, Dragonfly Energy is executing on our plan by continuing to expand our revenue opportunities in
existing and adjacent markets, while bringing new products and new capabilities to market. We remain excited about what lies ahead and
sharing more about our progress in the coming quarters.”
Third
Quarter 2023 Financial Results
Third
quarter 2023 Net Sales were $15.9 million, compared to $26.1 million in the third quarter of 2022. The year-over-year decline in revenue
was due to lower OEM and DTC battery and accessory sales compared to the same quarter a year ago. OEM revenue declined by $8.3
million in the quarter. As discussed on our last earnings call, we were notified that due to weaker demand for its products, our largest
OEM customer decided to switch from installing our storage solutions as a standard feature to an option on its products. As expected,
this had a material adverse impact on our OEM sales in the third quarter of 2023. DTC revenue decreased by $1.9 million compared
to the same quarter a year ago, as a result of decreased demand for our products due to ongoing macro-economic factors, such as higher
interest rates and inflation.
Third
quarter 2023 Gross Profit was $4.6 million, compared to $7.0 million in the third quarter of 2022. The decrease was primarily due to
lower overall sales and unit volumes, offset by a positive change in revenue mix, with a greater percentage of higher margin DTC sales
in the current year quarter.
Operating
Expenses in the third quarter of 2023 were $(10.5) million, compared to $(10.4) million in the prior year quarter, as higher research
and development costs were largely offset by decreased general, administrative, sales and marketing expenses.
Total
Other Expenses were $(4.1) million, compared to $(1.2) million in the prior year period. The increase was primarily due to higher interest
rate expenses related to the Company’s debt securities.
The
Company had a Net Loss of $(10.0) million, or $(0.17) per diluted share in the third quarter of 2023, compared to a Net Loss of $(3.7)
million or $(0.10) per diluted share in the prior year quarter. Net Income in the current quarter was impacted by lower sales, lower
gross profit, and increased other expense.
Third
quarter 2023 EBITDA was $(5.7) million, compared to EBITDA of $(3.1) million in the third quarter of 2022. Third quarter 2023 Adjusted
EBITDA, excluding stock-based compensation, the change in the fair market value of the Company’s warrants, and other one-time expenses,
was a negative $(4.6) million in the quarter, compared to $(2.7) million in the same quarter a year ago.
The
Company ended the third quarter of 2023 with $13.2 million in cash. Dragonfly Energy retains strong financial flexibility with access
to a largely undrawn $150 million equity line of credit.
Q4
2023 Outlook
The
Company continues to face headwinds in its core markets, which are dominated by consumer discretionary spending. The RV industry, in
particular, is undergoing more severe unit declines than previously expected, and while the Company continues to win share within the
RV market, these unit declines continue to negatively impact growth over the near-term. Additionally, as previously discussed, our largest
RV customer, in an effort to reduce costs, has changed our storage offering from a standard installation to a dealer option. While this
customer is not moving to a different solution or competitor, we do expect this change in strategy to continue to have a material limiting
effect on our revenue throughout the remainder of 2023 and potentially into 2024.
|
● |
Net
Sales are expected to range between $10.0 - $14.0 million, negatively impacted by continued softer demand from the overall RV market |
|
● |
Gross
Margin is expected in the range of 21.0% - 26.0% |
|
● |
Operating
Expenses are expected to be in a range of $(9.0) - $(12.0) million |
|
● |
Other
Income (Expense) is expected be an expense in the range of $(3.5) - $(4.5) million |
|
● |
Net
Losses are expected to be between $(9.0) - $(14.5) million for the quarter, or $(0.15) - $(0.24) per share based on approximately
60.0 million shares outstanding |
Webcast
Information
The
Dragonfly Energy management team will host a conference call to discuss its third quarter 2023 financial results this afternoon, Monday,
November 13, 2023, at 5:00 pm ET. The call can also be accessed live via telephone by dialing (206) 962-3782, toll-free in North America
(888) 259-6580, or for international callers (416) 764-8624, and referencing Dragonfly Energy. Please log in to the webcast or dial in
to the call at least 10 minutes prior to the start of the event. The live webcast of the conference will also be available at https://investors.dragonflyenergy.com/events-and-presentations/default.aspx
on the Events and Presentations page on the Investor Relations section of Dragonfly’s website.
An
archive of the webcast will be available for a period of time shortly after the call on the Events and Presentations page on the Investor
Relations section of Dragonfly Energy’s website, along with the earnings press release.
About
Dragonfly Energy
Dragonfly
Energy Holdings Corp. (Nasdaq: DFLI) headquartered in Reno, Nevada, is a leading supplier of deep cycle lithium-ion batteries. Dragonfly
Energy’s research and development initiatives are revolutionizing the energy storage industry through innovative technologies and
manufacturing processes. Today, Dragonfly Energy’s non-toxic deep cycle lithium-ion batteries are displacing lead-acid batteries
across a wide range of end-markets, including RVs, marine vessels, off-grid installations, and other storage applications. Dragonfly
Energy is also focused on delivering an energy storage solution to enable a more sustainable and reliable smart grid through the future
deployment of the Company’s proprietary and patented solid-state cell technology. To learn more, visit www.dragonflyenergy.com/investors.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of
1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s
intent, belief or expectations, including, but not limited to, statements regarding the Company’s guidance for 2023 results of
operations and financial position, planned products and services, business strategy and plans, market size and growth opportunities,
competitive position and technological and market trends. Some of these forward-looking statements can be identified by the use of forward-looking
words, including “may,” “should,” “expect,” “intend,” “will,” “estimate,”
“anticipate,” “believe,” “predict,” “plan,” “targets,” “projects,”
“could,” “would,” “continue,” “forecast” or the negatives of these terms or variations
of them or similar expressions.
These
forward-looking statements are subject to risks, uncertainties, and other factors (some of which are beyond the Company’s control)
which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that
may impact such forward-looking statements include, but are not limited to: headwinds in the Company’s core markets, including
the RV market; the Company’s ability to successfully increase market penetration into target markets; the growth of the addressable
markets that the Company intends to target; the Company’s ability to retain members of its senior management team and other key
personnel; the Company’s ability to maintain relationships with key suppliers including suppliers in China; the Company’s
ability to maintain relationships with key customers; the Company’s ability to access capital as and when needed under its $150
million ChEF Equity Facility; the Company’s ability to protect its patents and other intellectual property; the Company’s
ability to successfully optimize solid state cells and to produce commercially viable solid state cells in a timely manner or at all,
and to scale to mass production; the Company’s ability to achieve the anticipated benefits of its customer arrangements with THOR
Industries and THOR Industries’ affiliated brands (including Keystone RV Company); the impact of the coronavirus disease pandemic,
including any mutations or variants thereof and/or the Russian/Ukrainian conflict; the Company’s ability to generate revenue from
future product sales and its ability to achieve and maintain profitability; and the Company’s ability to compete with other manufacturers
in the industry and its ability to engage target customers and successfully convert these customers into meaningful orders in the future.
These and other risks and uncertainties are described more fully in the sections entitled “Risk Factors” and “Cautionary
Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022
and in the Company’s subsequent filings with the SEC available at www.sec.gov.
If
any of these risks materialize or any of the Company’s assumptions prove incorrect, actual results could differ materially from
the results implied by these forward-looking statements. There may be additional risks that the Company presently does not know or that
it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements.
All forward-looking statements contained in this press release speak only as of the date they were made. Except to the extent required
by law, the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after
the date on which they were made.
Investor
Relations:
Sioban
Hickie
DragonflyIR@icrinc.com
Dragonfly
Energy Holdings Corp.
Unaudited
Condensed Consolidated Balance Sheets
(U.S.
Dollars in Thousands, except share and per share data)
| |
September 30, 2023 | | |
December 31, 2022 | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 13,235 | | |
$ | 17,781 | |
Accounts receivable, net of allowance for credit losses | |
| 4,336 | | |
| 1,444 | |
Inventory | |
| 41,907 | | |
| 49,846 | |
Prepaid expenses | |
| 823 | | |
| 1,624 | |
Prepaid inventory | |
| 2,074 | | |
| 2,002 | |
Prepaid income tax | |
| 529 | | |
| 525 | |
Other current assets | |
| 118 | | |
| 267 | |
Total Current Assets | |
| 63,022 | | |
| 73,489 | |
Property and Equipment | |
| | | |
| | |
Machinery and equipment | |
| 16,337 | | |
| 10,214 | |
Office furniture and equipment | |
| 275 | | |
| 275 | |
Leasehold improvements | |
| 1,727 | | |
| 1,709 | |
Vehicle | |
| 33 | | |
| 195 | |
Total | |
| 18,372 | | |
| 12,393 | |
Less accumulated depreciation and amortization | |
| (2,496 | ) | |
| (1,633 | ) |
Property and Equipment, Net | |
| 15,876 | | |
| 10,760 | |
Operating lease right of use asset | |
| 3,615 | | |
| 4,513 | |
Total Assets | |
$ | 82,513 | | |
$ | 88,762 | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 9,889 | | |
$ | 13,475 | |
Accrued payroll and other liabilities | |
| 10,788 | | |
| 6,247 | |
Customer deposits | |
| 217 | | |
| 238 | |
Uncertain tax position liability | |
| 128 | | |
| 128 | |
Notes payable, current portion, net of deferred financing fees | |
| 18,700 | | |
| 19,242 | |
Operating lease liability, current portion | |
| 1,264 | | |
| 1,188 | |
Financing lease liability, current portion | |
| 36 | | |
| 10 | |
Total Current Liabilities | |
| 41,022 | | |
| 40,528 | |
Long-Term Liabilities | |
| | | |
| | |
Warrant liabilities | |
| 14,165 | | |
| 32,831 | |
Accrued expenses, long-term | |
| 351 | | |
| 492 | |
Operating lease liability, net of current portion | |
| 2,565 | | |
| 3,541 | |
Financing lease liability, net of current portion | |
| 75 | | |
| 38 | |
Total Long-Term Liabilities | |
| 17,156 | | |
| 36,902 | |
Total Liabilities | |
| 58,178 | | |
| 77,430 | |
| |
| | | |
| | |
Equity | |
| | | |
| | |
Common stock, 170,000,000 shares at $0.0001 par value, authorized, 58,880,712 and 43,272,728 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | |
| 6 | | |
| 4 | |
| |
| | | |
| | |
Preferred stock, 5,000,000 shares at $0.0001 par value, authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | |
| - | | |
| - | |
| |
| | | |
| | |
Additional paid in capital | |
| 68,293 | | |
| 38,461 | |
Retained deficit | |
| (43,964 | ) | |
| (27,133 | ) |
Total Equity | |
| 24,335 | | |
| 11,332 | |
Total Liabilities and Shareholders’ Equity | |
$ | 82,513 | | |
$ | 88,762 | |
Dragonfly
Energy Holdings Corp.
Unaudited
Condensed Interim Consolidated Statements of Operations
(U.S.
Dollars in Thousands, except share and per share data)
| |
Three Months Ended | |
| |
September 30, 2023 | | |
September 30, 2022 | |
| |
| | |
| |
Net Sales | |
$ | 15,889 | | |
$ | 26,117 | |
| |
| | | |
| | |
Cost of Goods Sold | |
| 11,317 | | |
| 19,079 | |
| |
| | | |
| | |
Gross Profit | |
| 4,572 | | |
| 7,038 | |
| |
| | | |
| | |
Operating Expenses | |
| | | |
| | |
Research and development | |
| 1,385 | | |
| 753 | |
General and administrative | |
| 6,005 | | |
| 6,336 | |
Selling and marketing | |
| 3,083 | | |
| 3,358 | |
| |
| | | |
| | |
Total Operating Expenses | |
| 10,473 | | |
| 10,447 | |
| |
| | | |
| | |
Loss From Operations | |
| (5,901 | ) | |
| (3,409 | ) |
| |
| | | |
| | |
Other (Expense) Income | |
| | | |
| | |
Interest expense | |
| (3,977 | ) | |
| (1,166 | ) |
Change in fair market value of warrant liability | |
| (145 | ) | |
| - | |
Total Other (Expense) Income | |
| (4,122 | ) | |
| (1,166 | ) |
| |
| | | |
| | |
Loss Before Taxes | |
| (10,023 | ) | |
| (4,575 | ) |
| |
| | | |
| | |
Income Tax (Benefit) Expense | |
| - | | |
| (886 | ) |
| |
| | | |
| | |
Net Loss | |
$ | (10,023 | ) | |
$ | (3,689 | ) |
| |
| | | |
| | |
Loss Per Share- Basic | |
$ | (0.17 | ) | |
$ | (0.10 | ) |
Loss Per Share- Diluted | |
$ | (0.17 | ) | |
$ | (0.10 | ) |
Weighted Average Number of Shares- Basic | |
| 58,736,013 | | |
| 38,129,422 | |
Weighted Average Number of Shares- Diluted | |
| 58,736,013 | | |
| 38,129,422 | |
Dragonfly
Energy Holdings Corp.
Unaudited
Condensed Interim Consolidated Statements of Operations
(U.S.
Dollars in Thousands, except share and per share data)
| |
Nine Months Ended | |
| |
September 30, 2023 | | |
September 30, 2022 | |
| |
| | |
| |
Net Sales | |
$ | 53,954 | | |
$ | 66,042 | |
| |
| | | |
| | |
Cost of Goods Sold | |
| 40,541 | | |
| 46,481 | |
| |
| | | |
| | |
Gross Profit | |
| 13,413 | | |
| 19,561 | |
| |
| | | |
| | |
Operating Expenses | |
| | | |
| | |
Research and development | |
| 3,332 | | |
| 1,951 | |
General and administrative | |
| 23,114 | | |
| 13,778 | |
Selling and marketing | |
| 11,075 | | |
| 9,331 | |
| |
| | | |
| | |
Total Operating Expenses | |
| 37,521 | | |
| 25,060 | |
| |
| | | |
| | |
Loss From Operations | |
| (24,108 | ) | |
| (5,499 | ) |
| |
| | | |
| | |
Other (Expense) Income | |
| | | |
| | |
Interest expense | |
| (11,905 | ) | |
| (3,657 | ) |
Change in fair market value of warrant liability | |
| 19,182 | | |
| - | |
Total Other (Expense) Income | |
| 7,277 | | |
| (3,657 | ) |
| |
| | | |
| | |
Loss Before Taxes | |
| (16,831 | ) | |
| (9,156 | ) |
| |
| | | |
| | |
Income Tax (Benefit) Expense | |
| - | | |
| (1,700 | ) |
| |
| | | |
| | |
Net Loss | |
$ | (16,831 | ) | |
$ | (7,456 | ) |
| |
| | | |
| | |
Loss Per Share- Basic | |
$ | (0.34 | ) | |
$ | (0.20 | ) |
Loss Per Share- Diluted | |
$ | (0.34 | ) | |
$ | (0.20 | ) |
Weighted Average Number of Shares- Basic | |
| 50,166,320 | | |
| 37,098,990 | |
Weighted Average Number of Shares- Diluted | |
| 50,166,320 | | |
| 37,098,990 | |
Dragonfly
Energy Holdings Corp.
Unaudited
Condensed Consolidated Statement of Cash Flows
(U.S.
Dollars in Thousands)
| |
Nine Months Ended | |
| |
September 30, 2023 | | |
September 30, 2022 | |
Cash Flows From Operating Activities | |
| | | |
| | |
Net Loss | |
$ | (16,831 | ) | |
$ | (7,456 | ) |
Adjustments to Reconcile Net Loss to Net Cash | |
| | | |
| | |
Used in Operating Activities | |
| | | |
| | |
Stock based compensation | |
| 6,387 | | |
| 1,155 | |
Amortization of debt discount | |
| 995 | | |
| 1,783 | |
Change in fair market value of warrant liability | |
| (19,182 | ) | |
| - | |
Deferred tax liability | |
| - | | |
| (1,707 | ) |
Non-cash interest expense (paid-in-kind) | |
| 3,738 | | |
| - | |
Provision for doubtful accounts | |
| 147 | | |
| - | |
Depreciation and amortization | |
| 909 | | |
| 648 | |
Loss on disposal of property and equipment | |
| 116 | | |
| 62 | |
Changes in Assets and Liabilities | |
| | | |
| | |
Accounts receivable | |
| (3,039 | ) | |
| (3,037 | ) |
Inventories | |
| 7,939 | | |
| (12,360 | ) |
Prepaid expenses | |
| 801 | | |
| (1,259 | ) |
Prepaid inventory | |
| (72 | ) | |
| 3,732 | |
Other current assets | |
| 149 | | |
| (2,114 | ) |
Other assets | |
| 898 | | |
| 831 | |
Income taxes payable | |
| (4 | ) | |
| (927 | ) |
Accounts payable and accrued expenses | |
| 343 | | |
| (3,915 | ) |
Customer deposits | |
| (21 | ) | |
| (147 | ) |
Total Adjustments | |
| 104 | | |
| (17,255 | ) |
Net Cash Used in Operating Activities | |
| (16,727 | ) | |
| (24,711 | ) |
| |
| | | |
| | |
Cash Flows From Investing Activities | |
| | | |
| | |
Purchase of property and equipment | |
| (6,507 | ) | |
| (6,065 | ) |
Net Cash Used in Investing Activities | |
| (6,507 | ) | |
| (6,065 | ) |
| |
| | | |
| | |
Cash Flows From Financing Activities | |
| | | |
| | |
Proceeds from public offering, net | |
| 21,640 | | |
| - | |
Proceeds from public offering (ATM), net | |
| 671 | | |
| | |
Proceeds from note payable, related party | |
| 1,000 | | |
| - | |
Repayment of note payable, related party | |
| (1,000 | ) | |
| - | |
Repayment of note payable | |
| (5,275 | ) | |
| - | |
Proceeds from exercise of Public Warrants | |
| 747 | | |
| - | |
Proceeds from exercise of options | |
| 359 | | |
| 707 | |
Proceeds from stock purchase agreement | |
| - | | |
| 15,000 | |
Proceeds from exercise of Investor Warrants | |
| 546 | | |
| - | |
Net Cash Provided by Financing Activities | |
| 18,688 | | |
| 15,707 | |
| |
| | | |
| | |
Net Increase (Decrease) in Cash | |
| (4,546 | ) | |
| (15,069 | ) |
Beginning cash | |
| 17,781 | | |
| 28,630 | |
Ending cash | |
$ | 13,235 | | |
$ | 13,561 | |
Use
of Non-GAAP Financial Measures
The
Company provides non-GAAP financial measures including EBITDA and Adjusted EBITDA as a supplement to GAAP financial information to enhance
the overall understanding of the Company’s financial performance and to assist investors in evaluating the Company’s results
of operations, period over period. Adjusted non-GAAP measures exclude significant unusual items. Investors should consider these non-GAAP
measures as a supplement to, and not a substitute for financial information prepared on a GAAP basis.
Adjusted
EBITDA
Adjusted
EBITDA is considered a non-GAAP financial measure under the rules of the SEC because it excludes certain amounts included in net loss
calculated in accordance with GAAP. Specifically, the Company calculates Adjusted EBITDA by GAAP net loss adjusted to exclude stock-based
compensation expense, business combination related expenses and other one-time, non-recurring items.
The
Company has included Adjusted EBITDA because it is a key measure used by Dragonfly’s management team to evaluate its operating
performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses. As such,
the Company believes Adjusted EBITDA is helpful in highlighting trends in the ongoing core operating results of the business.
Adjusted
EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of net loss
or other results as reported under GAAP. Some of these limitations are:
|
● |
Adjusted
EBITDA does not reflect the Company’s cash expenditures, future requirements for capital expenditures, or contractual commitments; |
|
|
|
|
● |
Adjusted
EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs; |
|
|
|
|
● |
Adjusted
EBITDA does not reflect the Company’s tax expense or the cash requirements to pay taxes; |
|
|
|
|
● |
although
amortization and depreciation are non-cash charges, the assets being amortized and depreciated will often have to be replaced in
the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; |
|
|
|
|
● |
Adjusted
EBITDA should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring
items for which the Company may adjust in historical periods; and |
|
|
|
|
● |
other
companies in the industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative
measure. |
Reconciliations
of Non-GAAP Financial Measures
EBITDA
and Adjusted EBITDA
The
following table presents reconciliations of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measure for each
of the periods indicated.
Dragonfly
Energy Holdings Corp.
Reconciliation
of GAAP to Non-GAAP Measures (Unaudited)
(U.S.
Dollars in Thousands)
| |
Three Months Ended | | |
Nine Months Ended | |
| |
September 30, | | |
September 30, | | |
September 30, | | |
September 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Net Loss | |
$ | (10,023 | ) | |
$ | (3,689 | ) | |
$ | (16,831 | ) | |
$ | (7,456 | ) |
Interest Expense | |
| 3,977 | | |
| 1,166 | | |
| 11,905 | | |
| 3,657 | |
Taxes | |
| - | | |
| (886 | ) | |
| - | | |
| (1,700 | ) |
Depreciation and Amortization | |
| 316 | | |
| 259 | | |
| 909 | | |
| 648 | |
EBITDA | |
$ | (5,730 | ) | |
$ | (3,150 | ) | |
$ | (4,017 | ) | |
$ | (4,851 | ) |
Adjusted for: | |
| | | |
| | | |
| | | |
| | |
Stock Based Compensation(1) | |
| 946 | | |
| 436 | | |
| 6,387 | | |
| 1,155 | |
Separation Agreement(2) | |
| - | | |
| - | | |
| 720 | | |
| - | |
June Offering Costs(3) | |
| - | | |
| - | | |
| 904 | | |
| - | |
Promissory Note Forgiveness(4) | |
| - | | |
| - | | |
| - | | |
| 469 | |
Change in fair market value of warrant liability(5) | |
| 145 | | |
| - | | |
| (19,182 | ) | |
| - | |
Adjusted EBITDA | |
$ | (4,639 | ) | |
$ | (2,714 | ) | |
$ | (15,188 | ) | |
$ | (3,227 | ) |
|
(1) |
Stock-Based
Compensation is comprised of costs associated with option and RSU grants made to our employees, consultants and board members. |
|
(2)
|
Separation
Agreement is comprised of $720 in cash severance associated with the separation agreement dated April 26, 2023 between us and our
former Chief Legal Officer. |
|
(3) |
June
Offering Costs are comprised of fees and expenses, including legal, accounting, and other expenses associated with our secondary
offering. |
|
(4) |
Promissory
Note Foregiveness is comprised of the loan that was forgiven, prior to the Business Combination, in connection with the promissory
note, with a maturity date of March 1, 2026, between us and John Marchetti, our former Chief Financial Officer and current Senior
Vice President, Operations. |
|
(5) |
Change
in fair market value of warrant liability represents the change in fair value for the three and nine month period ended September
30, 2023. |
Source:
Dragonfly Energy Holdings Corp.
v3.23.3
Cover
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