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Dragonfly Energy Files Annual Report on Form 10-K and Updates Operating Results for the Fourth Quarter and Year ended December 31, 2022







RENO, Nev., April 17, 2023 (GLOBE NEWSWIRE) — Dragonfly Energy Holdings Corp. (“Dragonfly” or the “Company”) (Nasdaq: DFLI), an industry leader in energy storage and producer of deep cycle lithium-ion storage batteries, today filed its Annual Report on Form 10-K and updated its financial results for the fourth quarter and audited full year ended December 31, 2022.

On March 29, 2023, the Company announced its unaudited financial results for the year ended December 31, 2022 and provided the press release under Items 2.02 and 9.01 of Form 8-K on that day. In connection with the completion of the 2022 audit, $19.8 million in deal-related expenses from the Company’s October 7, 2022 Business Combination, which were initially recognized within equity, were classified as general and administrative expenses. These expenses were unique to the Business Combination and are not expected to recur in future quarters. This press release updates and supersedes the press release issued on March 29, 2023 to reflect adjustments to the Company’s financial results. For additional information on these changes, including the Company’s audited financial statements for the year ending December 31, 2022, please see the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) earlier today.

Dragonfly’s Net Sales and Gross Profit remain unchanged. Below, please find a summary of the of the adjustments to operations from preliminary to final results.

Adjustments from preliminary to final results:

                 
  Fourth quarter 2022 Full Year 2022
($ thousands) Preliminary Change Final Preliminary Change Final
Operating Expenses  ($12,481)  ($20,460) ($32,941)  ($37,541)  ($20,460) ($58,001)
Net (Loss) Income  ($11,655)  ($20,460) ($32,115)  ($19,111)  ($20,460) ($39,571)
EBITDA  ($7,843)  ($19,750) ($27,593)  ($12,645)  ($19,799) ($32,444)
Adj. EBITDA  ($4,833)  $458  ($4,375)  ($7,951)  $411  ($7,540)
                 

 

About Dragonfly

Dragonfly Energy Holdings Corp. (Nasdaq: DFLI) headquartered in Reno, Nevada, is a leading supplier of deep cycle lithium-ion batteries. Dragonfly’s research and development initiatives are revolutionizing the energy storage industry through innovative technologies and manufacturing processes. Today, Dragonfly’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 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 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: the Company’s ability to recognize the anticipated benefits of the of the Company’s recent business combination with Chardan NexTech Acquisition 2 Corp. and related transactions; 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 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; and the Company’s ability to generate revenue from future product sales and its ability to achieve and maintain profitability. 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 filed with the SEC on April 17, 2023 and in the Company’s other filings with the SEC.

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, ICR, Inc.
DragonflyIR@icrinc.com

Dragonfly Energy Holdings Corp.
Balance Sheet
Years Ended December 31, 2022 and 2021
(in thousands)
       
     2022   2021
Current Assets    
 Cash $17,781  $25,586
 Restricted cash     3,044
 Accounts receivable, net of allowance for doubtful accounts  1,444   783
 Inventory  49,846   27,127
 Prepaid expenses  1,624   293
 Prepaid inventory  2,002   7,461
 Prepaid income tax  525   
 Other current assets  267   1,787
  Total Current Assets  73,489   66,081
Property and Equipment    
  Property and Equipment, Net  10,760   4,461
 Operating lease right of use asset  4,513   5,709
 Total Assets $88,762  $76,251
       
Current Liabilities    
 Accounts payable $13,475  $11,360
 Accrued payroll and other liabilities  6,295   2,608
 Customer deposits  238   434
 Uncertain tax position liability  128   
 Income tax payable     631
 Notes payable, current portion, net of debt issuance costs  19,242   1,875
 Operating lease liability, current portion  1,188   1,082
  Total Current Liabilities  40,566   17,990
Long‑Term Liabilities    
 Notes payable‑non current, net of debt discount     37,053
 Warrant liabilities  32,831   
 Deferred tax liabilities     453
 Accrued expenses‑long term  492   
 Operating lease liability, net of current portion  3,541   4,694
 Total Long‑Term Liabilities  36,864   42,200
Total Liabilities  77,430   60,190
       
Equity     
 Common stock, 170,000,000 shares at $0.0001 par value, authorized, 43,272,728 and 36,496,998 shares issued and outstanding as of December 31, 2022 and 2021, respectively    
   4   4
 Preferred stock, 5,000,000 shares at $0.0001 par value, authorized, no shares issued    
  and outstanding as of December 31, 2022 and 2021, respectively     
Additional paid in capital  38,461   3,619
Retained (deficit) earnings  (27,133)  12,438
Total Equity  11,332   16,061
Total Liabilities and Shareholders’ Equity $88,762  $76,251
       

Dragonfly Energy Holdings Corp.
Statement of Operations
Years Ended December 31, 2022 and 2021
(in thousands, except share and per share data)

  2022  2021 
       
Net Sales $86,251  $78,000 
         
Cost of Goods Sold  62,247   48,375 
         
Gross Profit  24,004   29,625 
         
Operating Expenses        
Research and development  2,764   2,689 
General and administrative  41,566   10,621 
Selling and marketing  13,671   9,848 
         
Total Operating Expenses  58,001   23,158 
         
(Loss) Income From Operations  (33,997)  6,467 
         
Other Income (Expense)        
Other Income  40   1 
Interest expense  (6,945)  (519)
Change in fair market value of warrant liability  5,446    
Debt extinguishment  (4,824)   
Total Other Expense  (6,283)  (518)
         
(Loss) Income Before Taxes  (40,280)  5,949 
         
Income Tax (Benefit) Expense  (709)  1,611 
         
Net (Loss) Income $(39,571) $4,338 
         
(Loss) Earnings Per Share- Basic $(1.03) $0.12 
(Loss) Earnings Per Share- Diluted $(1.03) $0.11 
Weighted Average Number of Shares- Basic  38,565,307   35,579,137 
Weighted Average Number of Shares- Diluted  38,565,307   37,742,337 
         
  Dragonfly Energy Holdings Corp.
  Statement of Cash Flows
  Years Ended December 31, 2022 and 2021
  (in thousands)
         
       2022   2021 
  Cash flows from Operating Activities    
  Net (Loss) Income $(39,571) $4,338 
  Adjustments to Reconcile Net (Loss) Income to Net Cash    
  Used in Operating Activities    
   Stock based compensation  2,467   734 
   Debt extinguishment  4,824    
   Amortization of debt discount  1,822   206 
   Change in fair market value of warrant liability  (5,446)   
   Deferred tax liability  (453)  122 
   Non‑cash interest expense (paid‑in kind)  1,192    
   Provision for doubtful accounts  108   50 
   Depreciation and amortization  891   617 
   Loss on disposal of property and equipment  56   124 
   Assumption of Warrant Liability  1,990    
  Changes in Assets and Liabilities    
   Accounts receivable  (769)  1,007 
   Inventories  (22,719)  (21,179)
   Prepaid expenses  (1,467)  58 
   Prepaid inventory  5,459   (6,353)
   Other current assets  1,520   (1,214)
   Other assets  1,196   1,029 
   Income taxes payable  (1,156)  (651)
   Accounts payable and accrued expenses  4,428   8,903 
   Uncertain tax position liability  128   (19)
   Customer deposits  (196)  (1,345)
  Total Adjustments  (6,125)  (17,911)
  Net Cash Used in Operating Activities  (45,696)  (13,573)
         
  Cash Flows From Investing Activities    
   Proceeds from disposal of property and equipment  35   61 
   Purchase of property and equipment  (6,862)  (2,970)
   Net Cash Used in Investing Activities  (6,827)  (2,909)
         
  Cash Flows From Financing Activities    
   Proceeds from term loan  75,000    
   Proceeds from note payable     45,000 
   Repayment from note payable  (45,000)   
   Payments of debt issuance costs  (4,032)  (6,278)
   Proceeds from exercise of options  706   184 
   Proceeds from stock purchase agreement  15,000    
   Proceeds from revolving note agreement     5,000 
   Repayments of revolving note agreement     (5,000)
   Net Cash Provided by Financing Activities  41,674   38,906 
         
  Net (Decrease) / Increase in Cash and Restricted Cash  (10,849)  22,424 
  Beginning cash and restricted cash  28,630   6,206 
  Ending cash and restricted cash $17,781  $28,630 
         
  Supplemental Disclosures of Cash Flow Information:    
   Cash paid for income taxes $773  $2,390 
   Cash paid for interest $2,252  $313 
  Supplemental Non‑Cash Items    
   Receivable of options exercised $  $250 
   Purchases of property and equipment, not yet paid $419  $255 
   Recognition of right of use asset obtained in exchange for operating lease liability $  $5,745 
   Cashless exercise of liability classified warrants $16,669  $ 
         

Dragonfly Energy Holdings Corp.
Statement of Operations
Quarters Ended December 31, 2022 and 2021
(in thousands, except share and per share data)

  Unaudited    
  2022  2021 
       
Net Sales $20,209  $20,179 
         
Cost of Goods Sold  15,766   14,061 
         
Gross Profit  4,443   6,118 
         
Operating Expenses        
Research and development  813   790 
General and administrative  27,788   2,191 
Selling and marketing  4,340   3,194 
         
Total Operating Expenses  32,941   6,175 
         
(Loss) Income From Operations  (28,498)  (57)
         
Other Income (Expense)        
Other Income  40   1 
Interest expense  (3,288)  (395)
Change in fair market value of warrant liability  5,446    
Debt extinguishment  (4,824)   
Total Other Expense  (2,626)  (394)
         
(Loss) Income Before Taxes  (31,124)  (451)
         
Income Tax (Benefit) Expense  991   (371)
         
Net (Loss) Income $(32,115) $(80)
         
(Loss) Earnings Per Share- Basic $(0.75) $(0.00)
(Loss) Earnings Per Share- Diluted $(0.75) $(0.00)
Weighted Average Number of Shares- Basic  42,948,026   36,102,440 
Weighted Average Number of Shares- Diluted  42,948,026   36,102,440 

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. 
  Years Ended December 31, 2022 and 2021 
  (in thousands, except share and per share data) 
       2022   2021 
  EBITDA Calculation     
  Net (Loss) Income $(39,571) $4,338 
   Plus: Interest  6,945   518 
   Plus: Taxes  (709)  1,611 
   Plus: Depreciation & Amortization  891   617 
  EBITDA $(32,444) $7,084 
          
  Adjustments to EBITDA     
   Plus: Stock Based Compensation  2,467   734 
   Plus: ERP Implementation     233 
   Plus: Promissory Note Forgiveness  469    
   Plus: Loss on Disposal of Assets  56   124 
   Plus: Separation Agreement  1,197    
   Plus: Debt-Extinguishment  4,824    
   Plus: Change in fair market value of warrant liability  (5,446)   
   Plus: Business Combination Expenses  21,337   295 
  Adjusted EBITDA $(7,540) $8,470 
          
          
  Dragonfly Energy Holdings Corp. 
  Statement of Operations 
  Quarters Ended December 31, 2022 and 2021 
  (in thousands, except share and per share data) 
      Unaudited  
       2022   2021  
  EBITDA Calculation     
  Net (Loss) Income $(32,115) $(80) 
   Plus: Interest  3,288   394  
   Plus: Taxes  991   (371) 
   Plus: Depreciation & Amortization  243   185  
  EBITDA $(27,593) $128  
          
  Adjustments to EBITDA     
   Plus: Stock Based Compensation  1,312   185  
   Plus: ERP Implementation     32  
   Plus: Loss on Disposal of Assets  (6)    
   Plus: Separation Agreement  1,197   185  
   Plus: Debt-Extinguishment  4,824     
   Plus: Change in fair market value of warrant liability  (5,446)    
   Plus: Business Combination Expenses  21,337   295  
  Adjusted EBITDA $(4,375) $825  
          

Source: Dragonfly Energy Holdings Corp. 

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