Dragonfly Energy Executes Comprehensive Definitive Term Loan Restructuring Agreements

Rhea-AI Summary

Dragonfly Energy (Nasdaq: DFLI) executed definitive term loan restructuring agreements on Nov 5, 2025 that materially reshape its capital structure.

Key actions: $45.0 million of senior secured term loan principal was prepaid using net proceeds from a recent stock offering; $25.0 million of principal was converted into newly created preferred stock convertible at $3.15 per share; $5.0 million of principal was forgiven; $19.0 million remains at a fixed 12% annual interest rate, payable monthly starting Dec 31, 2025 and maturing Oct 2027. Certain financial covenants are waived through Dec 31, 2026.

Positive

• Prepaid $45.0M principal using recent stock offering proceeds
• Converted $25.0M principal into preferred convertible stock at $3.15
• Forgave $5.0M principal, lowering total indebtedness
• Financial covenants waived through Dec 31, 2026 increasing flexibility

Negative

• Remaining $19.0M principal carries 12% annual interest
• Monthly interest payments begin Dec 31, 2025, increasing near-term cash needs
• Conversion into preferred stock creates potential dilution if converted to common

Insights

Corporate Finance Strategist

Debt restructuring materially reduces leverage and adds near-term covenant relief while leaving a smaller high‑rate tranche and convertible preferred.

The transaction prepays $45.0 million of senior secured term loan principal, converts $25.0 million into newly created preferred stock convertible at $3.15 per share, and secures forgiveness of $5.0 million, leaving $19.0 million outstanding. These moves reduce cash debt and substitute equity-like instruments, directly improving the reported balance sheet and liquidity metrics.

Risks and dependencies include the remaining tranche carrying a fixed 12% annual rate with monthly payments starting on December 31, 2025 and maturity in October 2027, which implies a meaningful ongoing interest burden. The conversion into preferred shares dilutes equity on conversion and depends on the preferred terms and conversion mechanics disclosed by the company. Waiver of covenants through December 31, 2026 gives short-term flexibility but leaves potential covenant risk thereafter.

Monitor the effective cash interest outflows and any further covenant renegotiations over the next 12 months, the pace of conversion of the preferred into common at $3.15 per share, and execution against stated manufacturing and technology expansion plans through 2026–2027. These items determine whether the restructuring translates into sustainable financial improvement or merely buys time.

Transaction Significantly Reduces Corporate Debt, Increases Financial Flexibility, and Strengthens Balance Sheet

RENO, Nev., Nov. 05, 2025 (GLOBE NEWSWIRE) -- Dragonfly Energy Holdings Corp. (“Dragonfly Energy” or the “Company”) (Nasdaq: DFLI), an industry leader in energy storage and battery technology, today announced the Company has finalized its agreements to restructure its outstanding indebtedness with its lenders under its existing term loan agreement (the “Term Loan Agreement”). The restructuring substantially improves Dragonfly Energy’s balance sheet by reducing outstanding debt and aligning capital resources to support continued execution of the Company’s growth strategy, including expansion of its proprietary battery manufacturing and technology initiatives.

“This restructuring with our term loan lenders marks a very important corporate milestone in strengthening Dragonfly Energy’s capital structure and increasing our financial flexibility,” said Dr. Denis Phares, chief executive officer of Dragonfly Energy. “Along with our recently completed capital raises, we believe this transaction positions us to better execute on our potential growth opportunities and drive long-term shareholder value.”

Key Terms of the Definitive Agreements:

• The Company has prepaid $45.0 million of outstanding principal of its senior secured term loan facility (the “Term Loan”) under the Term Loan Agreement using net proceeds from its recently completed stock offering.
• The Lenders have converted $25.0 million of outstanding principal of the Term Loan into shares of newly created preferred stock, convertible into common stock at a fixed price of $3.15 per share, and containing such other terms as previously disclosed by the Company.
• The Lenders have forgiven $5.0 million of outstanding principal of the Term Loan.
• The remaining $19.0 million in principal of the Term Loan carries a fixed interest rate of 12% per annum, payable monthly beginning December 31, 2025, and maturing in October 2027.
• Certain financial covenants under the Term Loan Agreement have been waived through December 31, 2026.
  

About Dragonfly Energy

Dragonfly Energy Holdings Corp. is a comprehensive lithium battery technology company, specializing in cell manufacturing, battery pack assembly, and full system integration. Through its renowned Battle Born Batteries® brand, Dragonfly Energy has established itself as a frontrunner in the lithium battery industry, with hundreds of thousands of reliable battery packs deployed in the field through top-tier OEMs and a diverse retail customer base. At the forefront of domestic lithium battery cell production, Dragonfly Energy’s patented dry electrode manufacturing process can deliver chemistry-agnostic power solutions for a broad spectrum of applications, including energy storage systems, electric vehicles, and consumer electronics. The Company's overarching mission is the future deployment of its proprietary, nonflammable, all-solid-state battery cells.

To learn more about Dragonfly Energy and its commitment to clean energy advancements, visit investors.dragonflyenergy.com.

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 about the Company’s expectations regarding the satisfaction of customary closing conditions related to the offering and the anticipated use of proceeds therefrom. 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. Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “may,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements necessarily contain these identifying words. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties associated with market conditions, as well as risks and uncertainties associated with the Company’s business and finances in general, including the risks and uncertainties in the section captioned “Risk Factors” in the the Company’s most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. There can be no assurances that we will be able to complete the offering on the anticipated terms, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.

Investor Relations:
Eric Prouty
Szymon Serowiecki
AdvisIRy Partners
DragonflyIR@advisiry.com

FAQ

How much debt did Dragonfly Energy (DFLI) prepay in the Nov 5, 2025 restructuring?

Dragonfly Energy prepaid $45.0 million of senior secured term loan principal using net proceeds from a recent stock offering.

What conversion terms did lenders receive under the DFLI term loan restructuring?

Lenders converted $25.0 million of principal into newly created preferred stock convertible into common at $3.15 per share.

What portion of the DFLI term loan was forgiven in the restructuring announced Nov 5, 2025?

$5.0 million of outstanding principal was forgiven by the lenders.

What are the interest rate and maturity for the remaining DFLI term loan balance?

The remaining $19.0 million principal carries a fixed 12% per annum interest rate, payable monthly beginning Dec 31, 2025, maturing in Oct 2027.

How long are financial covenants waived under Dragonfly Energy's loan restructuring?

Certain financial covenants have been waived through Dec 31, 2026.

How might the DFLI restructuring affect shareholders?

The deal reduces debt and broadens flexibility but includes a $25.0M conversion to preferred convertible stock that could dilute common shares if converted.