Dragonfly Energy Issues Year-End CEO Letter to Shareholders

Rhea-AI Summary

Dragonfly Energy (Nasdaq: DFLI) issued a Year-End CEO letter outlining a 2025 turnaround driven by balance-sheet repair, commercial traction, and R&D progress. The company raised approximately $90 million via three common stock offerings, completed a debt restructuring that included a $45 million cash prepayment, conversion of $25 million debt to equity, and $5 million principal forgiveness, leaving total debt principal at $19 million. Operational wins include a 45% YoY increase in Q3 2025 RV OEM sales and a commercial deployment with Werner Enterprises for trucking idle-reduction systems. The company regained Nasdaq compliance and emphasized vertical integration, a near-100-patent IP portfolio, and optimism for 2026 growth.

Positive

• $90M raised via three common stock offerings in H2 2025
• Debt restructured with $45M cash prepayment and $25M conversion to equity
• Total debt principal reduced to $19M with lower interest rates
• RV OEM sales rose 45% YoY in Q3 2025
• Commercial deployment with Werner Enterprises (installed on new trucks)

Negative

• Company spent majority of 2025 out of Nasdaq compliance prior to remediation
• Reverse stock split completed in December may create near-term downward pressure
• Three common stock offerings imply shareholder dilution due to equity raises

Key Figures

Equity raised H2 2025 $90 million Raised through three common stock offerings in second half of 2025

Debt prepayment $45 million Cash prepayment on term loan as part of restructuring

Debt-to-equity conversion $25 million Senior debt converted to equity under restructuring

Debt forgiveness $5 million Principal amount forgiven by lenders

Total debt principal $19 million Debt principal outstanding after restructuring

Patent portfolio size Nearly 100 patents Filed, pending, or granted globally for battery technologies

RV OEM growth 45% year-over-year Increase in RV OEM business in Q3 2025 vs prior year

Werner fleet size 9,000 trucks Werner Enterprises fleet referenced as early trucking adopter

Market Reality Check

$3.91 Last Close

Volume Volume 526,817 is below the 20-day average of 1,150,352 (about 0.46x normal activity). low

Technical Shares at $3.96 are trading below the 200-day moving average of $5.72 and far under the $38.90 52-week high.

Peers on Argus

DFLI fell 4.35% while peers showed mixed moves: EPOW up 2.05%, but GWH, STI, CCTG, and XPON down between about 1.9% and 6.2%, indicating stock-specific pressure rather than a clean sector trend.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 16	Reverse stock split	Negative	-38.0%	1-for-10 reverse stock split to maintain Nasdaq listing compliance.
Dec 10	Rail partnership	Positive	+8.3%	Distribution partnership with National Railway Supply and new lithium battery standard.
Dec 08	Marine OEM expansion	Positive	+6.5%	World Cat expands use of Battle Born batteries as standard equipment.
Nov 28	Product launch	Positive	+2.4%	Launch of Battle Born industrial-grade Power Station 3000 and Pro 5000.
Nov 25	Product lineup expansion	Positive	+14.0%	Broader Battle Born system offerings and new inverter/charger and app features.

Pattern Detected

DFLI has generally reacted positively to commercial expansion and partnership news, but technical actions like the reverse split drew a sharp negative response.

Recent Company History

Over the last few months, DFLI has focused on commercial expansion and capital structure repair. Product launches and OEM wins in power systems, marine, and rail (late Nov 2025 to Dec 2025) all saw positive price reactions, suggesting investors welcomed growth-oriented news. In contrast, the Dec 16 reverse stock split, framed as a Nasdaq compliance step, coincided with a steep selloff. Today’s CEO letter emphasizes the same themes—balance sheet restructuring, OEM traction, and diversified end markets—against that backdrop of mixed responses to strategic versus technical actions.

Market Pulse Summary

This announcement outlines substantial balance sheet restructuring and commercial momentum. Management points to about $90 million raised, debt cut to $19 million, and a 45% year-over-year rise in RV OEM revenue in Q3 2025, alongside expansion into trucking, marine, and rail. Recent history shows the market reacting positively to OEM wins and product launches but negatively to the reverse split. Investors may watch upcoming revenue trends, debt levels, and new fleet deployments to gauge how effectively this strategy translates into sustained growth.

Key Terms

lithium-ion batteries technical

"enable widespread adoption of Lithium-ion batteries, while also enabling domestic"

Rechargeable lithium-ion batteries are lightweight, high-energy storage cells that use lithium ions moving between electrodes to store and release electricity, like a refillable fuel tank for electronic devices and electric vehicles. Investors care because they power a wide range of products from phones to cars and grid systems, so improvements, costs, supply chain constraints, or safety issues can directly affect manufacturers’ profits, product demand, and capital expenditure plans.

aerosol-based processes technical

"application of dry aerosol-based processes to the novel manufacture of battery"

Aerosol-based processes are methods that create, control or use tiny liquid or solid particles suspended in air—like sprays, mists or fog—to deliver materials, coat surfaces, sterilize, or carry out chemical and biological reactions. They matter to investors because these methods influence product performance, manufacturing scale, safety and regulatory scrutiny, and cost structure; think of them like choosing between a spray hose and a drip line for how efficiently and evenly something gets applied.

battery electrodes technical

"aerosol-based processes to the novel manufacture of battery electrodes, replacing"

Battery electrodes are the internal positive and negative plates inside a battery where chemical reactions store and release electrical energy; they act like a sponge or ledger for charged particles during charging and discharging. Electrode materials and design determine a battery’s capacity, charging speed, lifespan, safety and cost, so advances or supply disruptions can directly affect manufacturing costs, product competitiveness and a company’s exposure to raw‑material prices—key concerns for investors.

all-solid-state electrolyte technical

"low-cost production of cells having a composite all-solid-state electrolyte."

An all-solid-state electrolyte is a solid material that moves charged particles inside a battery, replacing the liquid or gel layer that normally carries ions between the positive and negative electrodes. It matters to investors because solid electrolytes can improve safety, increase how much energy a battery stores for its size, and lengthen lifespan—like swapping a fragile liquid-filled bottle for a sturdier solid casing—potentially changing product performance, manufacturing costs, and market demand.

electrochemistry technical

"pack-focused without in-house electrochemistry expertise, often relying on Asian"

Electrochemistry is the study of chemical reactions that produce or consume electricity when charged particles move between materials, such as in batteries, fuel cells and sensors. Investors should care because advances or problems in this area directly affect product performance, manufacturing costs and market demand for technologies like energy storage and industrial electrolysis; think of it as the wiring and plumbing that determines how well electrical products work and how much they cost to run.

idle-reduction power systems technical

"pilot of our advanced idle-reduction power systems. These achievements helped us"

Idle-reduction power systems are devices and setups that let a vehicle or equipment run lights, heating, cooling and electronics without keeping the main engine idling, similar to a phone’s low-power mode that preserves function while using less energy. For investors they matter because they lower fuel and maintenance costs, help fleets meet emissions rules, and create a steady market opportunity for manufacturers and service providers focused on efficiency and regulatory compliance.

reverse split financial

"I want to further address the reverse split that was completed in December."

A reverse split is when a company reduces the number of its outstanding shares by combining several existing shares into one new share, so the price per share rises proportionally while the company’s overall value stays the same. Investors care because it can make a stock appear more respectable or meet exchange rules — like turning many small coins into a single larger bill — but it can also signal financial trouble and often affects trading liquidity and investor perception.

minimum bid price regulatory

"have a reverse split approved by shareholders to ensure bid price compliance."

The minimum bid price is the lowest share price that a market, regulator, or specific offering will accept for a trade, listing, or auction—think of it as a reserve or floor that a stock must meet to qualify for certain actions. It matters to investors because falling below that floor can limit trading options, trigger compliance measures or delisting risks, and affect liquidity and the perceived value of a holding, much like a reserve price in an auction sets the baseline for a sale.

AI-generated analysis. Not financial advice.

RENO, Nev., Jan. 08, 2026 (GLOBE NEWSWIRE) -- Dragonfly Energy Holdings Corp. (Nasdaq: DFLI) (“Dragonfly Energy” or the “Company”), an industry leader in energy storage, today issued a Year-End Letter to Shareholders from its Chief Executive Officer and President, Dr. Denis Phares.

Dear DFLI Shareholders,

2025 marked an important inflection point in Dragonfly Energy’s history. We greatly improved our balance sheet, expanded our OEM footprint, and secured critical validation in heavy-duty trucking, including a commercial deployment from Werner Enterprises following a successful real-world pilot of our advanced idle-reduction power systems. These achievements helped us return to year-over-year revenue growth and position us to execute on the vision that drove us to become a public company three years ago.

The mission and strategy of the company have not changed. We aim to revolutionize energy storage through manufacturing innovations that will enable widespread adoption of Lithium-ion batteries, while also enabling domestic production. We are accomplishing these goals by engineering and assembling smart storage systems that we market and sell into focused high value commercial sectors, including RV, marine, rail, and trucking– leveraging an established brand demonstrating consistent execution.

We have taken decisive action in response to the tumultuous three years since we became a public company, characterized by inflation, rising interest rates, tariff uncertainties, and overseas price manipulation, all of which created an environment that stifled revenue growth and profitability. Operationally, we shifted our focus toward near-term revenue generating opportunities and effective cash management, accelerating commercial product development. On the capital structure side, we executed a comprehensive restructuring that reshaped our balance sheet. In the second half of 2025, we raised approximately $90 million through three common stock offerings and successfully negotiated a debt restructuring with our lenders, which included a $45 million cash prepayment, the conversion of $25 million of debt to equity, and the forgiveness of $5 million from the principal balance of the loan. Our total debt principal now stands at just $19 million with a significantly lower interest rate and extended covenant flexibility through 2026. As a result of this restructuring, we have emerged in a much stronger financial position to accomplish what we set out to achieve when we decided to become a public company in 2022.

I believe these actions represent a pivotal turning point for the company. For the majority of 2025, we were out of compliance with Nasdaq listing standards. After a panel review in June, we received an extension until November 10 and we were given a number of remediation tasks: 1) convert all outstanding preferred equity to common equity, 2) convert some portion of our senior debt to equity, 3) raise equity capital, and 4) have a reverse split approved by shareholders to ensure bid price compliance. Well in advance of November 10, we executed on all of these tasks and regained compliance on all standards - market cap, stockholder’s equity, and minimum bid price. I want to further address the reverse split that was completed in December. The optics of a reverse split are never ideal and can create near-term pressure on a stock. However, it is important to note this was a technical requirement by Nasdaq that addressed compliance to remain listed since our stock price had once again fallen below $1.00.

We are not the same company as last year having significantly strengthened the balance sheet and returned to year-over-year growth. We ended the year in a much stronger financial position, and I have never been more confident in the future prospects of the company.

As many of our investors are aware, Dragonfly Energy is unique in its combination of fundamental R&D and brand-driven commercial sales. Our research broadly addresses the application of dry aerosol-based processes to the novel manufacture of battery electrodes, replacing the conventional wet slurry-based processes. These processes enable significant cost reduction in the production of conventional Lithium-ion batteries, validated by a third-party analysis completed by Sphere Energy, while also facilitating the low-cost production of cells having a composite all-solid-state electrolyte. Dragonfly Energy has been proactive in protecting these technologies through a growing global patent portfolio, which currently stands at nearly 100 filed, pending, or granted patents. Our IP portfolio reinforces our evolution into a complete power systems provider.

Dragonfly Energy is also unique in its focus on vertical integration. Many Western battery technology companies are either cell-focused without downstream system capabilities or pack-focused without in-house electrochemistry expertise, often relying on Asian partners for cell manufacturing. This is where we excel. We are already well-known as a battery pack and system provider, and our ability to vertically integrate upstream as a cell manufacturer provides an incredible opportunity for value creation. Having established a world-class laboratory assembled in collaboration with partners like Tescan and Bruker, a domestic supply chain with partners like Ioneer (Domestic Lithium Supply), and in-house intellectual property and cell manufacturing expertise, I believe Dragonfly Energy is one of the best-positioned companies outside of Asia to contribute to the entire value chain from raw materials to storage systems.

Taking a look at our end markets, The RV market endured a painful post-COVID correction, exacerbated by stubbornly high interest rates. But this is a notoriously cyclical market. From a long-term value perspective, the important metric for us is the penetration of Lithium as an integral part of any RV energy system. This is where we gained significant traction. Dragonfly Energy’s systems are becoming increasingly standard on both motorized and non-motorized rigs at OEMs such as Thor brands including Airstream, Tiffin, and Keystone; Forest River brands such as FR3, OGV Vans and Pause; REV Group brands including Renegade and Midwest Automotive; and other leading manufacturers such as Leisure Travel Vans, Ember, and nuCamp, among others. We saw a 45% year-over-year increase in our RV OEM business in Q3 2025. The industry as a whole was flat, but we continue to gain meaningful market share.

Three primary factors drove this success. First, our engineering expertise combined with our U.S.-based manufacturing footprint enables superior quality, reliability, and technical support while also strengthening and diversifying our supply chain in the face of ongoing geopolitical uncertainty. Second, we continue to innovate in collaboration with our OEM customers. Since we are not simply importing finished products, we can tune systems down to the component level to meet the specific needs of individual OEM customers. And finally, our expertise in cell electrochemistry and our technology roadmap resonate with our large OEM customers. We regularly share our technology and product roadmap to ensure that we are headed in the same direction as our customers.

And we replicated this success beyond the RV sector, strengthening our position in several other strategic markets. Heavy-duty trucking represents our most significant near-term growth opportunity. Last year, we co-authored a technical whitepaper with PACCAR, considered one of the last true American manufacturers in heavy-duty trucking, focused on idle reduction solutions and validating the performance and relevance of our technology. The paper puts additional focus on health and comfort of the driver benefits driven by this technology.

The application of our systems to heavy duty trucking was a natural progression of what we accomplished in RV. A long-haul trucker’s behavior is analogous to a full-time RVer’s: a house battery bank charges during the drive, while operating house appliances during rest periods. Historically, trucks had to idle continuously during rest periods, resulting in higher fuel costs, accelerated engine wear, and driver discomfort. Our DualFlow Power Pack and All-Electric APU products significantly reduce and often even eliminate idling, delivering immediate, quantifiable benefits. Eliminating idling is the low hanging fruit in the trucking market, with the potential to save the industry billions of dollars in fuel and engine maintenance. As full electrification has proven more difficult than anticipated, the focus of the industry has turned to practical improvements that can be implemented today. In this regard, our approach has resonated with fleets, which many described as a “no-brainer”.

However, fleets are cautious. They move slowly in trying and adopting new technologies since lost revenue associated with down trucks is not acceptable – especially in the middle of a historic freight recession. While a multitude of fleets agreed to trial our systems through long-duration trials, pilots start small and grow slowly as data is collected and analyzed to ensure safety, reliability, and ROI. When the benefits are certain and the cash is available, fleets move. And now that our delisting threat is eliminated, our balance sheet stabilized, and pilot programs are showing positive results, we believe we are in a stronger position to increase our sales in this market.

Werner, an industry bellwether with a 9000-truck fleet, is the first big domino to fall for us. After engaging with us for nearly two years, and immediately following our recent debt restructuring, Werner selected our systems for installation on its latest order of new trucks. As of this week, they are all installed and on the road. Moreover, the DualFlow product is not limited to new trucks. In fact, we have demonstrated ROI for installation on existing trucks in fleets as well. We look forward to announcing more wins in the trucking market, at which point we believe we will be able to provide revenue guidance that does not prematurely divulge the activities of individual large fleets.

And beyond heavy duty trucking, we also expanded into several other exciting end markets. In marine, World Cat, the world’s largest manufacturer of power catamarans, expanded Dragonfly Energy systems across additional models, reinforcing our reputation for reliability in demanding environments. And in the rail sector, we recently announced a distribution partnership with National Railway Supply following the approval of AREMA’s first lithium battery standard, a standard our team helped shape through years of participation. These milestones show that our technology is gaining traction across multiple industries at once.

While the difficult economy continues to present headwinds, we are bullish on our growth prospects for 2026 as we experience continued momentum in RV, trucking, and adjacent markets.

Finally, I would like to share with you my appreciation for the resilience and commitment of Dragonfly Energy employees. Like many small cap companies, we have been put through the ringer due to the macroeconomic stresses and uncertainties over the last few years. And, as a public company, our trials and tribulations are far more visible and open to scrutiny. Dragonfly Energy’s employees have demonstrated an incredible work ethic and commitment to the mission of the company under these difficult circumstances. We are far stronger now than we were three years ago. I am bullish on 2026 and beyond because of our revenue diversification, technology portfolio, strengthened balance sheet, and the momentum we are building across multiple end markets. We have positioned Dragonfly Energy to capitalize on significant market opportunities while driving towards profitability. We believe the foundation is set for sustained growth and long-term value creation.

About Dragonfly Energy

Dragonfly Energy Holdings Corp. (Nasdaq: DFLI) 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 regarding the Company’s current financial position and market preparedness, the Company’s future 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. Such factors include those set forth 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, 2024, 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

Eric Prouty

Szymon Serowiecki

AdvisIRy Partners
DragonflyIR@advisiry.com

Source: Dragonfly Energy Holdings Corp.

FAQ

What capital actions did Dragonfly Energy (DFLI) complete in 2025?

Dragonfly Energy raised approximately $90 million via three common stock offerings and completed a debt restructuring including a $45M prepayment, $25M debt-to-equity conversion, and $5M principal forgiveness.

How much debt does Dragonfly Energy (DFLI) have after the 2025 restructuring?

After the restructuring the company's total debt principal stands at $19 million with a lower interest rate and extended covenant flexibility through 2026.

What commercial wins did Dragonfly Energy (DFLI) report for heavy-duty trucking in 2025?

Dragonfly reported a commercial deployment with Werner Enterprises (systems installed on new trucks) after pilots and co-authored a technical whitepaper with PACCAR validating idle-reduction solutions.

How did Dragonfly Energy (DFLI) perform in the RV OEM market in 2025?

The company reported a 45% year-over-year increase in RV OEM business in Q3 2025 and listed multiple OEM partners adopting its systems.

Did Dragonfly Energy (DFLI) regain Nasdaq compliance and what actions were taken?

Yes; the company converted preferred equity, converted portions of senior debt to equity, raised equity capital, and completed a shareholder-approved reverse split to restore compliance ahead of the November 10 deadline.