8-K
Dragonfly Energy Holdings Corp. (DFLI)
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
Dateof Report (Date of earliest event reported): August 21, 2023
DRAGONFLY
ENERGY HOLDINGS CORP.
(Exactname of registrant as specified in its charter)
| Nevada | 001-40730 | 85-1873463 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 1190 Trademark Drive, #108 | ||
| --- | --- | |
| Reno, Nevada | 89521 | |
| (Address of principal executive offices) | (Zip Code) |
(775)622-3448
(Registrant’stelephone number, including area code)
N/A
(Formername 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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> 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 | 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. ☐
Item2.02. Results of Operations and Financial Condition.
On August 21, 2023, Dragonfly Energy Holdings Corp. (the “Company”) issued an earnings disclosing certain information regarding its results of operations for the second quarter ended June 30, 2023. Following the publication of the press release, the Company will host an earnings call at 5:00 p.m. (Eastern Time) on August 21, 2023, via a webcast. During the webcast, the Company’s financial results for the second quarter ended June 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.
Item7.01. 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.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release of Dragonfly Energy Holdings Corp., dated August 21, 2023. |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
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. | |
|---|---|
| By: | /s/ Denis Phares |
| Name: | Denis<br> Phares |
| Title: | Chief<br> Executive Officer |
Date: August 21, 2023
Exhibit99.1
Dragonfly Energy Reports Second Quarter 2023 Financial Results
U.S.lithium battery cell pilot program complete; full cell production expected by year end
RENO,NEVADA (August 21, 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 second quarter ended June 30, 2023.
SecondQuarter 2023 Financial Highlights
| ● | Net<br> Sales were $19.3 million, compared to $21.6 million in Q2 2022 |
|---|---|
| ● | Gross<br> Profit was $4.1 million, compared to $7.0 million in Q2 2022 |
| ● | Operating<br> expenses were $(12.5) million, compared to $(7.6) million in Q2 2022 |
| ● | Net<br> Loss of $(11.7) million, compared to a Net Loss of $(1.5) million in Q2 2022 |
| ● | Diluted<br> Loss per share was $(0.25) compared to $(0.04) in Q2 2022 |
| ● | EBITDA<br> of $(7.3) million, compared to $(0.3) million in Q2 2022 |
Operationaland Business Highlights
| ● | Announced<br> completion of U.S. lithium battery cell pilot line and beginning of anode manufacturing at<br> scale, using patented deposition process |
|---|---|
| ● | Announced<br> U.S. Patent for innovative battery pack assembly design, enabling flexible custom installation<br> solutions and increased energy density |
| ● | Announced<br> partnership with nuCamp, the world’s largest teardrop trailer and small camper manufacturers,<br> to provide full lithium power systems as standard equipment on 2024 model year products |
| ● | Dragonfly<br> Energy joined the Russell 2000^®^ Index |
“We have achieved a number of important milestones since our last call, with our patent pertaining to preparation and powder film deposition of pre-coated powders and completion of our lithium battery cell pilot program,” said Denis Phares, CEO of Dragonfly Energy. “While the business continues to experience some near-term market headwinds, Dragonfly Energy is executing our plan; growing our market share in our core markets, addressing new growth opportunities, and making significant progress on our cell manufacturing goals. We are excited for what lies ahead and sharing that with you in the coming quarters.”
SecondQuarter 2023 Financial and Operating Results
Dragonfly generated net sales of $19.3 million in the second quarter, in line with the Company’s $18.0 to $22.0 million revenue guidance. Our revenue declined by $2.3 million from $21.6 million in the second quarter of 2022 as growth from our OEM customers was offset by declines in our direct-to-consumer (“DTC”) business.
Gross profit in the quarter was $4.1 million, compared to $7.0 million in the second quarter of 2022. The decrease in gross profit was primarily due to the change in revenue mix that included a larger percentage of lower margin OEM sales and a lower percentage of higher margin DTC sales, as well as an increase in material costs.
Second quarter 2023 operating expenses of $(12.5) million, were higher compared to $(7.6) million in the second quarter of 2022. Higher professional services, compliance, and insurance, as well as higher personnel, severance, stock-based compensation and materials costs drove the increase.
The Company had a net loss of $(11.7) million, or $(0.25) per diluted share in the second quarter of 2023, compared to a net loss of $(1.5) million or $(0.04) per diluted share in the second quarter of 2022. Net income in the second quarter of 2023 was primarily impacted by lower DTC segment sales, increased cost of goods sold, higher operating expenses, and increased other expenses.
Second quarter 2023 EBITDA was $(7.3) million, compared to EBITDA of $(0.3) million in the second quarter of 2022. Second quarter 2023 Adjusted EBITDA, excluding stock-based compensation, costs associated with our offering in June, and the impact of a separation agreement and changes in fair market value of the Company’s warrants was $(5.5) million in the quarter, compared to $0.2 million in the same quarter a year ago.
The Company ended the second quarter of 2023 with $33.0 million in cash. Dragonfly Energy retains strong financial flexibility with access to a $150 million equity line of credit.
Q32023 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, with deliveries expected to fall to volumes not seen in a decade. As a result of this industry weakness, we were informed in July 2023 that our largest RV customer has instituted a de-contenting strategy that ultimately 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 have a material limiting effect on our revenue throughout the remainder of 2023. In light of this change, we have removed all previously forecasted revenue from this customer for the remainder of the year.
| ● | Net<br> Sales are expected to range between $16.0 - $20.0 million, impacted by overall softer demand<br> from the RV market |
|---|---|
| ● | Gross<br> Margin is expected to improve modestly on a sequential basis |
| --- | --- |
| ● | Operating<br> Expenses are expected to be in a range of $(10.0) - $(13.0) million |
| --- | --- |
| ● | Other<br> Income (Expense) is expected be an expense in the range of $(4.0) - $(4.5) million |
| --- | --- |
| ● | Net<br> Losses are expected to be between $(10.0) - $(13.0) million for the quarter, or $(0.21) -<br> $(0.27) per share based on 48.0 million shares outstanding |
| --- | --- |
WebcastInformation
The Dragonfly Energy management team will host a conference call to discuss its first quarter 2023 financial results this afternoon, Monday, August 21, 2023, at 5:00 pm ET. The call can also be accessed live via telephone by dialing (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.
AboutDragonfly
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-LookingStatements
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.
InvestorRelations:
Sioban Hickie, ICR, Inc.
DragonflyIR@icrinc.com
DragonflyEnergy Holdings Corp.
UnauditedCondensed Interim Consolidated Statements of Operations
(U.S. Dollars in Thousands, except share and per share data)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2023 | June 30, 2022 | |||||
| Net Sales | $ | 19,274 | $ | 21,622 | ||
| Cost of Goods Sold | 15,176 | 14,594 | ||||
| Gross Profit | 4,098 | 7,028 | ||||
| Operating Expenses | ||||||
| Research and development | 1,067 | 859 | ||||
| General and administrative | 7,614 | 3,816 | ||||
| Selling and marketing | 3,808 | 2,881 | ||||
| Total Operating Expenses | 12,489 | 7,556 | ||||
| Loss From Operations | (8,391 | ) | (528 | ) | ||
| Other (Expense) Income | ||||||
| Interest expense | (4,113 | ) | (1,228 | ) | ||
| Change in fair market value of warrant liability | 804 | - | ||||
| Total Other (Expense) Income | (3,309 | ) | (1,228 | ) | ||
| Loss Before Taxes | (11,700 | ) | (1,756 | ) | ||
| Income Tax (Benefit) Expense | - | (287 | ) | |||
| Net Loss | $ | (11,700 | ) | $ | (1,469 | ) |
| Loss Per Share- Basic | $ | (0.25 | ) | $ | (0.04 | ) |
| Loss Per Share- Diluted | $ | (0.25 | ) | $ | (0.04 | ) |
| Weighted Average Number of Shares- Basic | 47,418,269 | 36,616,430 | ||||
| Weighted Average Number of Shares- Diluted | 47,418,269 | 36,616,430 |
DragonflyEnergy Holdings Corp.
UnauditedCondensed Interim Consolidated Statements of Operations
(U.S. Dollars in Thousands, except share and per share data)
| Six Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2023 | June 30, 2022 | |||||
| Net Sales | $ | 38,065 | $ | 39,925 | ||
| Cost of Goods Sold | 29,224 | 27,402 | ||||
| Gross Profit | 8,841 | 12,523 | ||||
| Operating Expenses | ||||||
| Research and development | 1,947 | 1,198 | ||||
| General and administrative | 17,109 | 7,442 | ||||
| Selling and marketing | 7,992 | 5,973 | ||||
| Total Operating Expenses | 27,048 | 14,613 | ||||
| Loss From Operations | (18,207 | ) | (2,090 | ) | ||
| Other (Expense) Income | ||||||
| Interest expense | (7,928 | ) | (2,491 | ) | ||
| Change in fair market value of warrant liability | 19,327 | - | ||||
| Total Other (Expense) Income | 11,399 | (2,491 | ) | |||
| Loss Before Taxes | (6,808 | ) | (4,581 | ) | ||
| Income Tax (Benefit) Expense | - | (814 | ) | |||
| Net Loss | $ | (6,808 | ) | $ | (3,767 | ) |
| Loss Per Share- Basic | $ | (0.15 | ) | $ | (0.10 | ) |
| Loss Per Share- Diluted | $ | (0.15 | ) | $ | (0.10 | ) |
| Weighted Average Number of Shares- Basic | 46,263,591 | 36,579,990 | ||||
| Weighted Average Number of Shares- Diluted | 46,263,591 | 36,579,990 |
DragonflyEnergy Holdings Corp.
UnauditedCondensed Consolidated Balance Sheets
(U.S. Dollars in Thousands, except share and per share data)
| December 31, 2022 | |||||
|---|---|---|---|---|---|
| Current Assets | |||||
| Cash | 32,952 | $ | 17,781 | ||
| Accounts receivable, net of allowance for credit losses | 2,172 | 1,444 | |||
| Inventory | 44,198 | 49,846 | |||
| Prepaid expenses | 1,199 | 1,624 | |||
| Prepaid inventory | 2,942 | 2,002 | |||
| Prepaid income tax | 529 | 525 | |||
| Other current assets | 239 | 267 | |||
| Total Current Assets | 84,231 | 73,489 | |||
| Property and Equipment | |||||
| Machinery and equipment | 15,932 | 10,214 | |||
| Office furniture and equipment | 275 | 275 | |||
| Leasehold improvements | 1,727 | 1,709 | |||
| Vehicle | 33 | 195 | |||
| Total | 17,967 | 12,393 | |||
| Less accumulated depreciation and amortization | (2,180 | ) | (1,633 | ) | |
| Property and Equipment, Net | 15,787 | 10,760 | |||
| Operating lease right of use asset | 3,912 | 4,513 | |||
| Total Assets | 103,930 | $ | 88,762 | ||
| Current Liabilities | |||||
| Accounts payable | 19,990 | $ | 13,475 | ||
| Accrued payroll and other liabilities | 9,758 | 6,295 | |||
| Customer deposits | 152 | 238 | |||
| Uncertain tax position liability | 128 | 128 | |||
| Notes payable, current portion, net of deferred financing fees | 22,372 | 19,242 | |||
| Operating lease liability, current portion | 1,239 | 1,188 | |||
| Total Current Liabilities | 53,639 | 40,566 | |||
| Long-Term Liabilities | |||||
| Warrant liabilities | 14,637 | 32,831 | |||
| Accrued expenses, long-term | 551 | 492 | |||
| Operating lease liability, net of current portion | 2,890 | 3,541 | |||
| Total Long-Term Liabilities | 18,078 | 36,864 | |||
| Total Liabilities | 71,717 | 77,430 | |||
| Equity | |||||
| Common stock, 170,000,000 shares at 0.0001 par value, authorized, 58,504,541 and 43,272,728 shares issued and outstanding as of June 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 June 30, 2023 and December 31, 2022, respectively | - | - | |||
| Additional paid in capital | 66,148 | 38,461 | |||
| Retained deficit | (33,941 | ) | (27,133 | ) | |
| Total Equity | 32,213 | 11,332 | |||
| Total Liabilities and Shareholders’ Equity | 103,930 | $ | 88,762 |
All values are in US Dollars.
DragonflyEnergy Holdings Corp.
UnauditedCondensed Consolidated Statement of Cash Flows
(U.S. Dollars in Thousands)
| Six<br> Months Ended | ||||||
|---|---|---|---|---|---|---|
| June<br> 30, 2023 | June<br> 30, 2022 | |||||
| Cash<br> flows from Operating Activities | ||||||
| Net<br> Loss | $ | (6,808 | ) | $ | (3,767 | ) |
| Adjustments<br> to Reconcile Net Loss to Net Cash | ||||||
| Used<br> in Operating Activities | ||||||
| Stock<br> based compensation | 5,441 | 719 | ||||
| Amortization<br> of debt discount | 620 | 1,196 | ||||
| Change<br> in fair market value of warrant liability | (19,327 | ) | - | |||
| Deferred<br> tax liability | - | (819 | ) | |||
| Non-cash<br> interest expense (paid-in-kind) | 2,510 | - | ||||
| Provision<br> for doubtful accounts | 93 | - | ||||
| Depreciation<br> and amortization | 593 | 389 | ||||
| Loss<br> on disposal of property and equipment | 116 | 62 | ||||
| Changes<br> in Assets and Liabilities | ||||||
| Accounts<br> receivable | (821 | ) | (3,876 | ) | ||
| Inventories | 5,648 | (15,141 | ) | |||
| Prepaid<br> expenses | 425 | (1,236 | ) | |||
| Prepaid<br> inventory | (940 | ) | 4,308 | |||
| Other<br> current assets | 28 | (1,962 | ) | |||
| Other<br> assets | 601 | 551 | ||||
| Income<br> taxes payable | (4 | ) | (973 | ) | ||
| Accounts<br> payable and accrued expenses | 6,272 | 820 | ||||
| Customer<br> deposits | (86 | ) | (183 | ) | ||
| Total<br> Adjustments | 1,169 | (16,145 | ) | |||
| Net<br> Cash Used in Operating Activities | (5,639 | ) | (19,912 | ) | ||
| Cash<br> Flows From Investing Activities | ||||||
| Purchase<br> of property and equipment | (2,571 | ) | (4,819 | ) | ||
| Net<br> Cash Used in Investing Activities | (2,571 | ) | (4,819 | ) | ||
| Cash<br> Flows From Financing Activities | ||||||
| Proceeds<br> from public offering, net | 22,002 | - | ||||
| Payment<br> of offering costs | (362 | ) | - | |||
| Proceeds<br> from public offering (ATM), net | 671 | - | ||||
| Proceeds<br> from note payable, related party | 1,000 | - | ||||
| Repayment<br> of note payable, related party | (1,000 | ) | - | |||
| Proceeds<br> from exercise of public warrants | 747 | - | ||||
| Proceeds<br> from exercise of options | 323 | 200 | ||||
| Net<br> Cash Provided by Financing Activities | 23,381 | 200 | ||||
| Net<br> Increase (Decrease) in Cash | 15,171 | (24,531 | ) | |||
| Beginning<br> cash | 17,781 | 28,630 | ||||
| Ending<br> cash | $ | 32,952 | $ | 4,099 |
Useof 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.
AdjustedEBITDA
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<br> EBITDA does not reflect the Company’s cash expenditures, future requirements for capital expenditures, or contractual commitments; |
|---|---|
| ● | Adjusted<br> EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs; |
| ● | Adjusted<br> EBITDA does not reflect the Company’s tax expense or the cash requirements to pay taxes; |
| ● | although<br> amortization and depreciation are non-cash charges, the assets being amortized and depreciated will often have to be replaced in<br> the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; |
| ● | Adjusted<br> EBITDA should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring<br> items for which the Company may adjust in historical periods; and |
| ● | other<br> companies in the industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative<br> measure. |
Reconciliationsof Non-GAAP Financial Measures
EBITDAand 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.
DragonflyEnergy Holdings Corp.
Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
(in thousands, except share and per share data)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2023 | June 30, 2022 | |||||
| Net Income | $ | (11,700 | ) | $ | (1,469 | ) |
| Interest Expense | 4,113 | 1,228 | ||||
| Taxes | - | (287 | ) | |||
| Depreciation and Amortization | 296 | 272 | ||||
| EBITDA | $ | (7,291 | ) | $ | (256 | ) |
| Adjustments | ||||||
| Stock-Based Compensation^(1)^ | 954 | 431 | ||||
| Separation Agreement^(2)^ | 720 | - | ||||
| June Offering Costs^(3)^ | 904 | - | ||||
| Promissory Note Forgiveness^(4)^ | - | - | ||||
| Change in Fair Market Value of Warrant Liability^(5)^ | (804 | ) | - | |||
| Adjusted EBITDA | $ | (5,517 | ) | $ | 175 |
Source: Dragonfly Energy Holdings Corp.
DragonflyEnergy Holdings Corp.
Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
(in thousands, except share and per share data)
| Six Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2023 | June 30, 2022 | |||||
| Net Income | $ | (6,808 | ) | $ | (3,767 | ) |
| Interest Expense | 7,928 | 2,491 | ||||
| Taxes | - | (814 | ) | |||
| Depreciation and Amortization | 593 | 389 | ||||
| EBITDA | $ | 1,713 | $ | (1,701 | ) | |
| Adjustments | ||||||
| Stock-Based Compensation^(1)^ | 5,441 | 719 | ||||
| Separation Agreement^(2)^ | 720 | - | ||||
| June Offering Costs^(3)^ | 904 | - | ||||
| Promissory Note Forgiveness^(4)^ | - | 469 | ||||
| Change in Fair Market Value of Warrant Liability^(5)^ | (19,327 | ) | - | |||
| Adjusted EBITDA | $ | (10,549 | ) | $ | (513 | ) |
| (1) | Stock-Based<br> Compensation is comprised of costs associated with option and RSU grants made to our employees, consultants and board members. | |||||
| --- | --- | |||||
| (2) | Separation<br> Agreement is comprised of $720 in cash severance associated with the separation agreement dated April 26, 2023 between us and our<br> former Chief Legal Officer. | |||||
| (3) | June<br> Offering Costs is comprised of fees and expenses, including legal, accounting, and other expenses associated with our secondary offering. | |||||
| (4) | Promissory<br> Note Forgiveness is comprised of the loan that was forgiven, prior to the Business Combination, in connection with the promissory<br> note, with a maturity date of March 1, 2026, between us and John Marchetti, our former Chief Financial Officer. | |||||
| (5) | Change<br> in fair market value of warrant liability represents the change in fair value January 1, 2023 through June 30, 2023. |