[10-Q] Dragonfly Energy Holdings Corp. Quarterly Earnings Report
Dragonfly Energy (DFLI) filed its Q3 2025 report, showing stronger top-line results alongside continued losses. Net sales were $15.967 million for the quarter, up from $12.720 million, with gross profit of $4.736 million versus $2.870 million. Operating loss narrowed to $3.778 million, but higher interest expense drove a net loss of $11.070 million. For the nine months, revenue reached $45.571 million compared with $38.433 million, and net loss was $24.901 million.
Liquidity and capital structure were the focus. Cash was $3.838 million and working capital $8.834 million as of September 30. The term loan’s carrying amount was $45.423 million, reflecting principal of $69.974 million plus PIK interest and unamortized discount. Subsequent to quarter-end, the company completed two equity financings, receiving net proceeds of $26.925 million on October 6 and $51.928 million on October 17. The term loan was restructured, including a $45 million prepayment in October, $5 million debt cancellation, and an exchange of $25 million principal into 25,000 shares of Series B Preferred on November 4. Management states these actions mitigated substantial doubt about going concern, with a monthly liquidity minimum of $5,000.
- None.
- None.
Insights
Revenue improved, losses persist; large post‑quarter financings reshape debt.
DFLI grew Q3 sales to
Balance sheet pressure remained at quarter-end with cash of
Management indicates these steps mitigate going concern concerns and reference a monthly liquidity minimum of
UNITED STATES
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DRAGONFLY ENERGY HOLDINGS CORP.
TABLE OF CONTENTS
| Page No. | ||
| PART I. FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | |
| Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 | 3 | |
| Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 | 5 | |
| Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2025 and 2024 | 6 | |
| Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 | 8 | |
| Notes to Condensed Consolidated Financial Statements | 10 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 45 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 65 |
| Item 4. | Controls and Procedures | 65 |
| PART II. OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 66 |
| Item 1A. | Risk Factors | 66 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 66 |
| Item 3. | Defaults Upon Senior Securities | 66 |
| Item 4. | Mine Safety Disclosures | 66 |
| Item 5. | Other Information | 67 |
| Item 6. | Exhibits | 67 |
| Signatures | 68 | |
| 2 |
Dragonfly Energy Holdings Corp.
condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, 2025 Unaudited | December 31,
2024 | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Prepaid inventory | ||||||||
| Prepaid income tax | ||||||||
| Assets held for sale | - | |||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and Equipment | ||||||||
| Machinery and equipment | ||||||||
| Office furniture and equipment | ||||||||
| Leasehold improvements | ||||||||
| Vehicle | ||||||||
| Total | ||||||||
| Less accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property and Equipment, Net | ||||||||
| Operating lease right of use asset, net | ||||||||
| Other assets | ||||||||
| Total Assets | $ | $ | ||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued payroll and other liabilities | ||||||||
| Accrued tariffs | ||||||||
| Accrued settlement, current portion | ||||||||
| Customer deposits | ||||||||
| Deferred revenue, current portion | ||||||||
| Uncertain tax position liability | ||||||||
| Notes payable, current portion, net of debt issuance costs | - | |||||||
| Operating lease liability, current portion | ||||||||
| Financing lease liability, current portion | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Liabilities | ||||||||
| Deferred revenue, net of current portion | ||||||||
| Warrant liabilities | ||||||||
| Accrued settlement, net of current portion | - | |||||||
| Notes payable, non current portion, net of debt issuance costs | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Financing lease liability, net of current portion | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (See Note 5) | - | |||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 3 |
Dragonfly Energy Holdings Corp.
condensed Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
September 30, 2025 Unaudited | December 31,
2024 | |||||||
| Redeemable Preferred stock | ||||||||
| Preferred stock-Series A, | - | - | ||||||
| Stockholders’ (Deficit) | ||||||||
| Preferred stock, | - | - | ||||||
| Common stock, | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities, Redeemable Preferred Stock and Stockholders’ (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 4 |
Dragonfly Energy Holdings Corp.
Unaudited condensed Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2025 and 2024
(in thousands, except share and per share data)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
For The Three Months Ended September 30, | For The Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net Sales | $ | $ | $ | $ | ||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (Expense) Income | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other expense | - | ( | ) | - | ( | ) | ||||||||||
| Change in fair market value of warrant liability | ( | ) | ||||||||||||||
| Total Other Expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss Before Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income Tax Expense (Benefit) | - | - | - | - | ||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss Per Common Share- Basic & Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted Average Number of Common Shares - Basic & Diluted | ||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 5 |
Dragonfly Energy Holdings Corp.
Unaudited Condensed Consolidated Statements of Shareholders’ Equity (Deficit)
For The Three and Nine Months Ended September 30, 2025 and 2024
(in thousands, except share data)
| Shares | Amount | Shares | Amount | Capital | (Deficit) | Total | ||||||||||||||||||||||
| Redeemable Preferred Stock | Common Stock | Additional Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | (Deficit) | Total | ||||||||||||||||||||||
| Balance - January 1, 2025 | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Common stock issued in public offering (ATM), net of costs | - | - | - | - | ||||||||||||||||||||||||
| Redeemable preferred stock issued, net | - | - | - | - | - | |||||||||||||||||||||||
| Shares issued for vested restricted stock units | - | - | - | - | - | - | ||||||||||||||||||||||
| Conversion of preferred to common | ( | ) | ( | ) | - | - | ||||||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance - March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Share issuance under ESPP | - | - | - | - | ||||||||||||||||||||||||
| Redeemable preferred stock issued, net | - | - | - | - | - | |||||||||||||||||||||||
| Shares issued for vested restricted stock units | - | - | - | - | - | - | ||||||||||||||||||||||
| Conversion of preferred to common | ( | ) | ( | ) | - | |||||||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance - June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Common stock issued in public offering, net | - | - | - | |||||||||||||||||||||||||
| Shares issued for vested restricted stock units | - | - | - | - | - | - | ||||||||||||||||||||||
| Conversion of preferred to common | ( | ) | ( | ) | - | - | ||||||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance - September 30, 2025 | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statement.
| 6 |
Dragonfly Energy Holdings Corp.
Unaudited Condensed Consolidated Statements of Shareholders’ Equity (Deficit) (Continued)
For The Three and Nine Months Ended September 30, 2025 and 2024
(in thousands, except share data)
| Redeemable Preferred Stock | Common Stock | Additional Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | (Deficit) | Total | ||||||||||||||||||||||
| Balance - January 1, 2024 | - | $ | - | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance - March 31, 2024 | - | - | ( | ) | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Common stock issued in public offering (ATM), net of cost | - | - | - | - | ||||||||||||||||||||||||
| Share issuance under ESPP | - | - | - | - | ||||||||||||||||||||||||
| Share cancellation | - | - | ( | ) | - | - | - | - | ||||||||||||||||||||
| Exercise of stock options | - | - | - | - | ||||||||||||||||||||||||
| Shares issued for vested restricted stock units | - | - | - | - | - | - | ||||||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance - June 30, 2024 | - | - | ( | ) | ||||||||||||||||||||||||
| Balance | - | - | ( | ) | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Common stock issued in public offering (ATM), net of cost | - | - | - | - | ||||||||||||||||||||||||
| Exercise of stock options | - | - | - | - | ||||||||||||||||||||||||
| Shares issued for vested restricted stock units | - | - | - | - | - | - | ||||||||||||||||||||||
| Stock compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Balance - September 30, 2024 | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Balance | - | $ | - | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 7 |
Dragonfly Energy Holdings Corp.
Unaudited Condensed Consolidated Statements of Cash Flows
For The Nine Months Ended September 30, 2025 and 2024
(in thousands)
| 2025 | 2024 | |||||||
| Cash flows from Operating Activities | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities | ||||||||
| Stock based compensation | ||||||||
| Amortization of debt discount | ||||||||
| Change in fair market value of warrant liability | ( | ) | ( | ) | ||||
| Non-cash interest expense (paid-in kind) | ||||||||
| Provision for credit losses | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right of use of assets | ||||||||
| Loss on disposal of property and equipment | - | |||||||
| Loss on impairment of right-of-use assets | - | |||||||
| Changes in Assets and Liabilities | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Prepaid inventory | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Other assets | ( | ) | ( | ) | ||||
| Income taxes payable | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Accrued tariffs | ( | ) | ||||||
| Accrued settlement | ( | ) | - | |||||
| Deferred revenue | ( | ) | ||||||
| Customer deposits | ( | ) | ( | ) | ||||
| Total Adjustments | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
The accompanying notes are an integral part of the consolidated financial statements.
| 8 |
Dragonfly Energy Holdings Corp.
Unaudited Condensed Consolidated Statements of Cash Flows (continued)
For The Nine Months Ended September 30, 2025 and 2024
(in thousands)
| (continued from previous page) | 2025 | 2024 | ||||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from public offering (ATM), net | ||||||||
| Proceeds from public offering, net | - | |||||||
| Proceeds from preferred stock offering, net of fees | - | |||||||
| Proceeds from note payable, related party | - | |||||||
| Repayment of note payable, related party | - | ( | ) | |||||
| Proceeds from exercise of options | - | |||||||
| Principal payment on finance leases | ( | ) | ( | ) | ||||
| Net Cash Provided by Financing Activities | ||||||||
| Net Change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents - beginning of period | ||||||||
| Cash and cash equivalents - end of period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash paid for income taxes | $ | $ | - | |||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental Non-Cash Items | ||||||||
| Purchases of property and equipment, not yet paid | $ | $ | ||||||
| Recognition of right of use asset obtained in exchange for operating lease liability | $ | $ | ||||||
| Recognition of leasehold improvements obtained in exchange for operating lease liability | $ | - | $ | |||||
| Recognition of warrant liability - Investor Warrants | $ | $ | ||||||
| Conversion of preferred stock to common stock | $ | $ | - | |||||
| Settlement of accrued liability for employee stock purchase plan | $ | $ | ||||||
| Reclassification of assets held for sale to machinery and equipment | $ | $ | - |
The accompanying notes are an integral part of the consolidated financial statements.
| 9 |
Dragonfly Energy Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in thousands, except share and per share data)
Note 1 - NATURE OF BUSINESS
Dragonfly Energy Holdings Corp. (the “Company”) sells lithium ion battery packs for use in a wide variety of applications. The Company sells to distributors under the Dragonfly Energy brand name, and sells direct to consumers under the trade name Battleborn Batteries. In addition, the Company develops technology for improved lithium ion battery manufacturing and assembly methods.
Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and present the consolidated financial statements of the Company and its wholly owned subsidiaries Dragonfly Energy Corp, Battle Born Battery Products, LLC and Dragonfly CellTech, Inc. All significant intercompany transactions and balances are eliminated in consolidation.
Basis of presentation
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These condensed consolidated financial statements should be read along with the Annual Report on Form 10-K filed with the SEC on March 31, 2025 of the Company for the annual period ended December 31, 2024. The consolidated balance sheet as of December 31, 2024 was derived from the audited consolidated financial statements as of and for the year then ended.
Going Concern
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
During
the nine months ended September 30, 2025 and 2024, the Company incurred losses from operations and had negative cash flow from operations.
As of September 30, 2025, the Company had $
In
connection with the Company’s senior secured term loan facility in an aggregate principal amount of $
| 10 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 2 – Summary of Significant Accounting Policies (continued)
Going Concern (Continued)
On
February 26, 2025, the Company entered into a Securities Purchase agreement (“Purchase Agreement”). The Purchase Agreement
called for the Company to authorize a new series of convertible preferred stock of the Company designated as the Series A Convertible
Preferred Stock, par value $
In
addition to the Purchase Agreement,
On
July 30, 2025, the Company completed an equity financing and received net proceeds of $
Subsequent
to September 30, 2025, the Company completed two equity financings. On October 6, 2025, the Company received net proceeds of $
As
presented above, strategic initiatives were executed in 2025 in order to alleviate the substantial doubt about the Company’s ability
to continue as a going concern. These initiatives include multiple capital raises (including those subsequent to September 30, 2025)
totalling a net cash increase of $
In addition, the Company may need to raise additional debt and/or equity financings to fund its operations, strategic plans, meet its financial covenants under the Term Loan and its obligations under the Series B Preferred Stock and repay its outstanding indebtedness under the Term Loan. The Company has historically been able to raise additional capital through issuance of equity and/or debt financings and the Company intends to raise additional capital as needed. However, the Company cannot guarantee that it will be able to raise additional equity, contain expenses, or increase revenue, and comply with the financial covenants under the Term Loan. If the Company is unable to obtain additional funding to support its current or proposed activities and operations and its outstanding indebtedness, it may not be able to continue its operations as currently anticipated, which may require it to suspend or terminate any ongoing development activities, modify its business plan, curtail various aspects of its operations, cease operations, or seek relief under applicable bankruptcy laws. In such event, the Company’s stockholders may lose a substantial portion or even all of their investment.
| 11 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 2 – Summary of Significant Accounting Policies (continued)
Inventory
Inventories
(Note 4), which consist of raw materials and finished goods, are stated at the lower of cost (first in, first out) or net realizable
value, net of reserves for obsolete inventory. The Company continually analyzes its slow moving and excess inventories. Based on historical
and projected sales volumes and anticipated selling prices, the Company established reserves. Inventory that is in excess of current
and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined
to be obsolete are written down to net realizable value. The Company had a reserve of $
Assets Held for Sale
Assets held for sale are valued at the lower of the carrying amount or the net realizable value estimated at September 30, 2025. Impairment to carrying amounts are recognized to non-operating expenses in the year ending December 31, 2024. The Assets held for sale, or the disposal group, consists of two research and development pieces of equipment that were not in use yet. Due to the nature of the disposal group being long-lived assets, the disposal group qualifies for the held for sale classification, as defined in ASC 360. Due to the Company shifting its focus from research and development efforts to product development, these assets would be put into service at an undeterminable time in the future and therefore, a search for a potential buyer was conducted. The sale was expected to be completed in the second quarter, but unforeseen circumstances forced the buyer to back out. Due to not being able to locate another buyer, the assets held for sale were reclassified as Property and Equipment as of September 30, 2025.
Use of Estimates
The preparation of financial statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company utilizes the use of estimates in its calculations for the reserve for obsolete or slow moving inventory, going concern, right of use asset, warrant liability, equity based compensation, income taxes, leases, right-of-use asset impairment, and license arrangement.
Revenue Recognition
Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.
Revenue is recognized when control of the promised goods is transferred to the customer or reseller, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods and services. Revenue associated with products holding rights of return are recognized when the Company concludes there is not a risk of significant revenue reversal in the future periods for the expected consideration in the transaction. There are no material instances including discounts and refunds where variable consideration is constrained and not recorded at the initial time of sale. Generally, the Company’s revenue is recognized at a point in time for standard promised goods at the time of shipment when title and risk of loss pass to the customer.
| 12 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 2 – Summary of Significant Accounting Policies (continued)
Revenue Recognition (continued)
The Company recognizes revenue from right-to-access license agreements upon the transfer of control to the customer. Upfront fees are deferred and recognized over the estimated period of benefit. Royalties are recognized as revenue when the customer’s underlying sales occur. The transaction price and timing of revenue recognition are adjusted as necessary to reflect changes in expectations.
The
Company may receive payments at the onset of the contract before delivery of goods for customers in the retail channel. Payment terms
for distributors and original equipment manufacturers (“OEMs”), are typically due within
During the nine months ended September 30, 2025, the Company recognized $
On
July 29, 2024, Dragonfly Energy Corp. (“Legacy Dragonfly”), a wholly-owned subsidiary of the Company, and Battle Born
Battery Products, LLC (“Battle Born LLC”), a wholly-owned subsidiary of Legacy Dragonfly, entered into a License
Agreement (the “License Agreement”) with Stryten Energy LLC (“Stryten”). The $
Disaggregation of Revenue
The following table presents the Company’s disaggregated revenues by distribution channel:
SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL
| Sales | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Sales | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Direct to customer | ||||||||||||||||
| Original equipment manufacture | ||||||||||||||||
| License fee revenue | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 13 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 2 – Summary of Significant Accounting Policies (continued)
Product Warranty
The
Company offers assurance type warranties from
The following table reflects the activity in the Company’s warranty obligation for the nine months ended September 30, 2025:
SCHEDULE OF WARRANTY OBLIGATION
| Beginning warranty obligation- | ||||
| Provision of warranty expense | ||||
| Settlement of warranty claims | ( | ) | ||
| Ending warranty obligation | $ |
Concentrations
As
of September 30, 2025, receivables from Customer A comprised approximately
For
the nine months ended September 30, 2025, sales from Customer A comprised approximately
As
of September 30, 2025, payables to Vendor A, Vendor B, and Vendor C comprised approximately
For
the nine months ended September 30, 2025, Vendor A and Vendor B accounted for approximately
| 14 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 2 – Summary of Significant Accounting Policies (continued)
Stock-Based Compensation
The Company accounts for stock based compensation arrangements with employees and non-employee consultants using a fair value method which requires the recognition of compensation expense for costs related to all stock based payments, including stock options (Note 11). The fair value method requires the Company to estimate the fair value of stock based payment awards to employees and non-employees on the date of grant using an option pricing model. Stock based compensation costs are based on the fair value of the underlying option calculated using the Black Scholes option pricing model and recognized as expense on a straight line basis over the requisite service period, which is the vesting period. Restricted stock unit awards are valued based on the closing trading value of the Company’s common stock on the date of grant and then amortized on a straight-line basis over the requisite service period of the award. The Company measures equity-based compensation awards granted to non-employees at fair value as the awards vest and recognizes the resulting value as compensation expense at each financial reporting period.
Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, expected dividend yield, expected term, risk free rate of return, and the estimated fair value of the underlying common stock. Due to the lack of company specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The group of representative companies have characteristics similar to the Company, including stage of product development and focus on the lithium ion battery industry. The Company uses the simplified method, which is the average of the final vesting tranche date and the contractual term, to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company uses an assumed dividend yield of zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company accounts for forfeitures as they occur.
Income Taxes
On July 4, 2025, the One Big Beautiful Bill (the “OBBB”) Act was signed into law in the United States. The OBBB Act includes significant provisions, such as the permanent extension and modification of certain provisions of the U.S. Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions beginning in 2025 and others beginning at various dates through 2027. The Company does not expect the OBBB Act to materially impact the Company’s income tax position in 2025.
| 15 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 2 – Summary of Significant Accounting Policies (continued)
Net Loss per Common Share
Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss earnings per share is calculated using the weighted-average number of common shares outstanding during the period and, if dilutive, the weighted-average number of potential shares of common stock.
The weighted-average number of common shares included in the computation of diluted net loss gives effect to all potentially dilutive common equivalent shares, including outstanding stock options and warrants.
Common stock equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive. In periods in which the Company reports a net loss, diluted net loss per share is generally the same as basic net loss per share since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
The following table sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share because their effect was anti-dilutive:
SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET LOSS PER SHARE
| 2025 | 2024 | |||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Warrants | ||||||||
| Restricted stock units | ||||||||
| Options | ||||||||
| Weighted average number of common shares-basic | ||||||||
Reclassification
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on previously reported net loss, total assets, total liabilities, or stockholders’ equity.
Segment Reporting
Operating segments are identified (Note 12) as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s Chief Executive Officer to make decisions with respect to resource allocation and assessment of performance. Previously, the Company recognized one operating segment. Historically, the Company reported a single operating and reportable segment, as management evaluated the business on a consolidated basis. During the fourth quarter of 2024, the Company reassessed its internal reporting structure and how management monitors operations and makes decisions. As a result of this reassessment, the Company determined that it now manages its business through two distinct operating segments. This change was driven by the development of the Company’s operations and internal decision-making processes, including the introduction of separate performance metrics and discrete financial information for each segment.
| 16 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 2 – Summary of Significant Accounting Policies (continued)
Recently issued accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis. The Company adopted ASU 2023-09 as of January 1, 2025.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires a public entity to disclose additional information about specific expense categories in the notes to the financial statements on an annual and interim basis. It is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. In January 2025, the FASB issued ASU 2025-01 to clarify that all public entities, including non-calendar year-end entities, should adopt the disclosure requirements of ASU 2024-03. The Company is currently evaluating the impact. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Accordingly, the Company will adopt the standard for the year ending December 31, 2027.
In July 2025, the FASB issued ASU 2025-05: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, amending the manner in which credit losses for accounts receivable and contract assets are determined. For public companies, the guidance introduces a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets. Under this expedient, entities may assume that conditions existing at the balance sheet date will persist for the remaining life of the asset, which simplifies the estimation process by eliminating the need to forecast future economic conditions for these short-term assets. This guidance is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements and related disclosures.
| 17 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 3 - FAIR VALUE MEASUREMENTS
The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of September 30, 2025:
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES
| Carrying Amount | Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||
| As of September 30, 2025 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Warrant liability- Term Loan | $ | $ | $ | - | $ | $ | - | |||||||||||||
| Warrant liability- June Public Offering | - | - | ||||||||||||||||||
| Total liabilities | $ | $ | $ | - | $ | $ | - | |||||||||||||
The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of December 31, 2024:
| Carrying Amount | Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Warrant liability- Term Loan | $ | $ | $ | - | $ | $ | - | |||||||||||||
| Warrant liability- June Public Offering | - | - | ||||||||||||||||||
| Total liabilities | $ | $ | $ | - | $ | $ | - | |||||||||||||
Due to Black Scholes calculation being utilized on all fair value measurement of warrant liabilities as of September 30, 2025 and December 31, 2024, the fair value warrant liabilities were transferred from Level 3 to Level 2 as of December 31, 2024. This is due to the observable inputs (such as the Company’s stock price and comparable company volatility calculations) included in the Black Scholes calculation, which makes the fair value measurement of the warrant liabilities more closely aligned with Level 2.
The carrying amounts of accounts receivable and accounts payable are considered Level 1 and approximate fair value as of September 30, 2025 and December 31, 2024 because of the relatively short maturity of these instruments.
The carrying value of the term loan as of September 30, 2025 and December 31, 2024 approximates fair value as the interest rate does not differ significantly from the current market rates available to the Company for similar debt and is considered Level 2.
| 18 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 3 - Fair Value Measurements (continued)
Level 3 Roll forward
Fair value measurements categorized within Level 3 are sensitive to changes in assumptions or methodology used to determine fair value, and such changes could result in a significant increase or decrease in the fair value.
The changes for Level 3 items measured at fair value on recurring basis using significant unobservable inputs are as follows:
There was no Level 3 activity for the three and nine months ended September 30, 2025.
SCHEDULE OF FAIR VALUE ON RECURRING BASIS USING SIGNIFICANT UNOBSERVABLE INPUTS
| Warrant Liability - Term Loan | Warrant liability- June Public Offering | |||||||
| Fair value as of January 1, 2024 | $ | $ | ||||||
| Change in fair value, gain included in net loss(1) | ( | ) | ( | ) | ||||
| Fair value as of March 31, 2024 | ||||||||
| Warrants Issued | - | |||||||
| Change in fair value, gain included in net loss(1) | ( | ) | ||||||
| Fair value as of June 30, 2024 | $ | $ | ||||||
| Fair value, Beginning balance | $ | $ | ||||||
| Warrant Issued | - | |||||||
| Change in fair value, loss included in net loss(1) | ( | ) | ( | ) | ||||
| Fair value as of September 30, 2024 | $ | $ | ||||||
| Fair value, Ending balance | $ | $ | ||||||
| (1) |
Note 4 - INVENTORY
Inventory consists of the following:
SCHEDULE OF INVENTORY
September 30, 2025 | December
31, 2024 | |||||||
| Raw material | $ | $ | ||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
| 19 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 5 - COMMITMENTS AND CONTINGENCIES
Litigation
From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, governmental actions, administrative actions, investigations or claims are pending against the Company or involve the Company that, in the opinion of the Company’s management, could reasonably be expected to have a material adverse effect on the Company’s business and financial condition.
Operating Leases
The
Company has leases related to the main office, warehouse space, research and development lab, engineering office, and sales office, all
located in Reno, Nevada. The leases require annual escalating monthly payments ranging from $
On
April 12, 2024 the Company entered into a lease agreement, pursuant to which the Company agreed to lease an approximately
On
May 8, 2025, the Company entered into a sixth lease amendment with its landlord to extend the lease term for an additional sixty-four
(
| 20 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 5 - Commitments and Contingencies (continued)
The following table presents the breakout of the operating leases as of:
SCHEDULE OF BREAKOUT OF OPERATING LEASES
September 30, 2025 | December
31, 2024 | |||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Short-term operating lease liabilities | ||||||||
| Long-term operating lease liabilities | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term | ||||||||
| Weighted average discount rate | % | % | ||||||
Assumptions used in determining the Company’s incremental borrowing rate include its implied credit rating and an estimate of secured borrowing rates based on comparable market data.
At September 30, 2025, the future minimum lease payments under these operating leases are as follows:
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES
| Fiscal Years Ending | ||||
| December 31, 2025(1) | ||||
| December 31, 2026 | ||||
| December 31, 2027 | ||||
| December 31, 2028 | ||||
| December 31, 2029 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less imputed interest | ||||
| Total operating lease liabilities | $ | |||
| (1) |
During
the three and nine months ended September 30, 2025, the Company recorded a non-cash impairment of a right-of-use asset of $
SCHEDULE OF LEASE COST
| Lease cost | Classification | 2025 | 2024 | 2025 | 2024 | |||||||||||||
| For The Three Months Ended September 30, | For The Nine Months Ended September 30, | |||||||||||||||||
| Lease cost | Classification | 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating lease cost | Cost of goods sold | $ | $ | $ | $ | |||||||||||||
| Operating lease cost | Research and development | |||||||||||||||||
| Operating lease cost | General and administration | |||||||||||||||||
| Operating lease cost | Selling and marketing | |||||||||||||||||
| Total lease cost | $ | $ | $ | $ | ||||||||||||||
All lease costs included in the schedule above are fixed.
| 21 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 5 - Commitments and Contingencies (continued)
Financing Leases
The
Company entered into finance lease agreements for equipment to support the Company’s operations. Payments under the finance lease
agreements are fixed for a term of
The following table presents the breakout of the financing leases as of:
SCHEDULE OF BREAKOUT OF FINANCE LEASES
| September
30, 2025 | December
31, 2024 | |||||||
| Finance lease right-of-use assets | $ | $ | ||||||
| Short-term finance lease liabilities | ||||||||
| Long-term finance lease liabilities | ||||||||
| Total finance lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term | ||||||||
| Weighted average discount rate | % | % | ||||||
Assumptions used in determining the Company’s incremental borrowing rate include its implied credit rating and an estimate of secured borrowing rates based on comparable market data.
At September 30, 2025, the future minimum lease payments under these financing leases are as follows:
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER FINANCE LEASES
| Fiscal Years Ending | ||||
| December 31, 2025(1) | ||||
| December 31, 2026 | ||||
| December 31, 2027 | ||||
| December 31, 2028 | ||||
| December 31, 2029 | ||||
| Total lease payments | ||||
| Less imputed interest | ||||
| Total financing lease liabilities | $ | |||
| (1) |
Other Contingencies
In
March 2025, the Company agreed to pay LithiumHub a total of $
| 22 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 6 - LONG TERM DEBT
Term Loan Agreement
As
of September 30, 2025, the Company had an outstanding term loan under a Term Loan, Guarantee and Security Agreement (the “Term
Loan Agreement”), dated October 7, 2022. The Term Loan matures on
Prior
to any amendments, the Term Loan accrues interest based on the Company’s senior leverage ratio. From inception through September
30, 2024, interest accrued at a per annum rate equal to adjusted SOFR (subject to a floor of 1.0%) plus
During
the nine months ended September 30, 2025 and 2024, the Company recognized interest expense of $
The obligations under the Term Loan Agreement are secured by a first-priority lien on substantially all of the Company’s assets, including certain mortgaged properties.
Subsequent to the original execution of the Term Loan Agreement, the Company entered into six amendments which modified certain terms of the facility, including, but not limited to, interest rate mechanics, the timing of principal payments, and certain financial and operational covenants. Five of these amendments were in effect as of September 30, 2025 and the Sixth Amendment was entered into on October 20, 2025.
Financial Covenants
| 23 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 6 - Long Term Debt (continued)
In February 2025, in connection with the Purchase Agreement, the Company entered into the Fifth Amendment to the Term Loan Agreement. This amendment extended the Term Loan’s maturity date by one year to October 2027 and deferred all principal and interest payments until April 2026. Additionally, the amendment postponed certain covenant requirements, significantly reducing the likelihood of a breach and the lender’s ability to accelerate repayment based on prior noncompliance, thereby allowing the Company to reclassify the debt as long-term as of December 31, 2024.
At September 30, 2025, the future debt maturities are as follows:
SCHEDULE OF FUTURE DEBT MATURITIES
| For Year Ended December 31, | ||||
| 2025 | $ | - | ||
| 2026 | ||||
| 2027 | ||||
| Total debt | ||||
| Less: Estimated interest paid-in-kind | ( | ) | ||
| Total debt | ||||
| Less: Unamortized debt discount costs | ( | ) | ||
| Total carrying amount | ||||
| Less: Current portion of debt | ( | ) | ||
| Total long-term debt | $ |
Subsequent to September 30, 2025, the Company entered into the Sixth Amendment to the Term Loan Agreement, for details, refer to Subsequent Event Note 12.
| 24 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 7 - RELATED PARTY
On
January 26, 2024 the Company entered into a convertible promissory note (the “January Note”) with a board member in the amount
of $
On
February 27, 2024 the Company entered into a convertible promissory note (the “February Note”) with a board member in the
amount of $
Effective
April 12, 2024, the Company entered into amendments to the employment agreements with its Chief Executive Officer, its Chief Revenue
Officer and its Chief Marketing Officer to amend the terms of their annual equity compensation (the “Amended Employee Agreements”).
The Amended Employee Agreements allow the Company to issue a combination of cash and equity awards on an annual basis up to a specified
amount ($
| 25 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 8 - WARRANTS
Common Stock Warrants classified as Equity
The following table presents a roll-forward of the Company’s equity warrants from January 1, 2025 to September 30, 2025 and January 1, 2024 to September 30, 2024:
SCHEDULE OF ROLL-FORWARD OF EQUITY WARRANTS
| Public
Warrants | Underwriters’ Warrants | |||||||
| Warrants Outstanding, January 1, 2025 | ||||||||
| Exercise of warrants | - | - | ||||||
| Warrants issued | - | - | ||||||
| Warrants Outstanding, September 30, 2025 | ||||||||
| Warrants Outstanding, January 1, 2024 | ||||||||
| Warrants Outstanding, Beginning | ||||||||
| Exercise of warrants | - | - | ||||||
| Warrants issued | - | - | ||||||
| Warrants Outstanding, September 30, 2024 | ||||||||
| Warrants Outstanding, Ending | ||||||||
Common Stock Warrants classified as Liability
Term Loan Warrants
On
February 26, 2025, the Company entered into the Fifth Amendment to the Term Loan with the lenders in connection with the February 2025
securities purchase agreement (see Note 9). The Fifth Amendment provided for a one-time issuance the February 2025 Penny Warrants
to purchase up to
The February 2025 Penny Warrants were valued utilizing a Black-Scholes model with the following assumptions:
SCHEDULE OF VALUATION ASSUMPTIONS OF PENNY WARRANTS
February 2025 penny warrants | ||||
| Stock price | $ | |||
| Strike price | $ | |||
| Term | ||||
| Volatility | % | |||
| Risk-free rate | % | |||
The Company concluded the Penny Warrants are not considered indexed to the Company’s common stock and to be accounted for as liabilities under ASC 815. As such, the estimated fair value is recognized as a liability each reporting period, with changes in the fair value recognized within income each period. There were no Penny Warrants outstanding prior to the merger.
| 26 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 8 - Warrants (continued)
Common Stock Warrants classified as Liability (Continued)
The following table provides the significant inputs to the Black-Scholes method for the fair value of the Penny Warrants:
SCHEDULE OF SIGNIFICANT INPUTS OF FAIR VALUE OF WARRANTS
| As
of September 30, 2025 | As
of December 31, 2024 | |||||||
| Common stock price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Dividend yield | % | % | ||||||
| Term | ||||||||
| Volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Fair value | $ | $ | ||||||
The following table provides the significant inputs to the Black-Scholes method for the fair value of the Investor Warrants issued in the June 2023 Offering:
| As
of September 30, 2025 | As
of December 31, 2024 | |||||||
| Common stock price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Dividend yield | % | % | ||||||
| Term | ||||||||
| Volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Fair value | $ | $ | ||||||
| 27 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 8 - Warrants (continued)
Common Stock Warrants classified as Liability (Continued)
The following table presents a roll-forward of the Company’s liability classified warrants from January 1, 2025 to September 30, 2025 and January 1, 2024 to September 30, 2024:
SCHEDULE OF ROLL FORWARD OF LIABILITY CLASSIFIED WARRANTS
| Private
Warrants | Term
Loan Warrants | Investor
Warrants | ||||||||||
| Warrants Outstanding, January 1, 2025 | ||||||||||||
| Exercise of warrants | - | - | - | |||||||||
| Warrants issued | - | - | ||||||||||
| Warrants Outstanding, September 30, 2025 | ||||||||||||
| Warrants Outstanding, January 1, 2024 | ||||||||||||
| Warrants Outstanding, Beginning | ||||||||||||
| Exercise of warrants | - | - | - | |||||||||
| Warrants issued | - | - | ||||||||||
| Warrants Outstanding, September 30, 2024 | ||||||||||||
| Warrants Outstanding, Ending | ||||||||||||
Private Placement Convertible Preferred Warrants classified as Liability
In
February 2025, in connection with a private placement offering of Series A Convertible Preferred Stock (see Note 9), the Company
issued
The
Company accounts for the Private Placement Convertible Preferred Warrants issued in connection with the initial offering in accordance
with the guidance contained in ASC 815-40. Such guidance provides that because the Private Placement Convertible Preferred Warrants do
not meet the criteria for equity treatment thereunder, each Private Placement Convertible Preferred Warrant must be recorded as a derivative
liability with the initial fair value of approximately $
| 28 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 8 - Warrants (continued)
Private Placement Convertible Preferred Warrants classified as Liability (Continued)
The following table presents a roll-forward of the Company’s Private Placement Convertible Preferred Warrants from January 1, 2025 to September 30, 2025:
SCHEDULE OF ROLL FORWARD OF PRIVATE PLACEMENT CONVERTIBLE PREFERRED WARRANTS
| Number of Warrants | Preferred
Shares Underlying Warrants | Common
Shares Underlying (at $1.00 floor) | ||||||||||
| Warrants Outstanding, January 1, 2025 | - | - | - | |||||||||
| Exercise of warrants | - | - | - | |||||||||
| Warrants issued | ||||||||||||
| Cancellation of warrants | ||||||||||||
| Warrants Outstanding, March 31, 2025 | ||||||||||||
| Exercise of warrants | - | - | - | |||||||||
| Warrants issued | - | - | - | |||||||||
| Cancellation of warrants | ( | ) | ( | ) | ( | ) | ||||||
| Warrants Outstanding, June 30, 2025 | - | - | - | |||||||||
| Warrants Outstanding, Beginning balance | - | - | - | |||||||||
| Exercise of warrants | - | - | - | |||||||||
| Warrants issued | - | - | - | |||||||||
| Warrants Outstanding, September 30, 2025 | - | - | - | |||||||||
| Warrants Outstanding, Ending balance | - | - | - | |||||||||
Note 9 - REDEEMABLE CONVERTIBLE PREFERRED STOCK
In
February 2025, the Company entered into the Purchase Agreement with an institutional investor. Pursuant to the Purchase Agreement, the
investor agreed to purchase in a registered direct offering (the “Registered Direct Offering”) from the Company
The
Company conducted an initial offering (the “Initial Closing”), which included the sale of Series A Preferred Stock through
a Registered Direct Offering (the “Registered Direct Offering”) and a Private Placement pursuant to the Purchase Agreement
(the “Private Placement”). In the Private Placement, the Company agreed to sell: (i)
In
total, the Company sold
On
April 28, 2025, the Company completed the second closing of the Private Placement (the “Second Closing”) pursuant to the
Purchase Agreement. In connection with the Second Closing, the investor purchased an additional
The
terms of the Series A Preferred Stock issued in the Second Closing were substantially similar to those issued in the Initial Closing,
except that the initial conversion price was set at $
| 29 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 9 - Redeemable Convertible Preferred Stock (continued)
While
the host contract is considered as an equity-classified instrument, it includes provisions that allow the investor to redeem the
instrument for cash or other assets upon the occurrence of events that are not solely within the company’s control. Because of
the Series A Preferred Stock containing this redemption feature, it was originally classified as mezzanine equity. From the issuance
date through September 30, 2025,
At
June 30, 2025, the Company did not have a sufficient number of registered shares to fully satisfy the conversion of the remaining
On
July 20, 2025, the Company entered into a Settlement and Release Agreement (the “Release Agreement”) with the holder of the
outstanding shares of Series A Preferred Stock. Pursuant to the terms of the Release Agreement, the Company issued and delivered
During
the nine months ended September 30, 2025, all of the Company’s redeemable preferred stock converted into
On October 20, 2025, the Company entered into a definitive agreement to issue newly-created Series B Preferred Stock, in exchange for an equivalent amount of its senior secured term-loan debt. See Note 13 – Subsequent Events for additional details.
| 30 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 10 - COMMON STOCK
No dividends on common stock had been declared by the Company.
For the nine months ended September 30, 2025 and 2024, the Company had reserved shares of common stock for issuance as follows:
SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE
| September
30, 2025 | September
30, 2024 | |||||||
| Options issued and outstanding | ||||||||
| Common stock outstanding | ||||||||
| Warrants outstanding | ||||||||
| Earnout shares | ||||||||
| Shares available for future issuance | ||||||||
| Total | ||||||||
ChEF Equity Facility
The
Company and Chardan Capital Markets LLC, a New York limited liability company (“CCM LLC”) entered into a purchase agreement
(the “Original Purchase Agreement”) and a Registration Rights Agreement in connection with the merger. Pursuant to the Original
Purchase Agreement, the Company has the right to sell to CCM LLC an amount of shares of common stock, up to a maximum aggregate purchase
price of $
July 2025 Public Offering
On
July 30, 2025, the Company entered into an underwriting agreement with Canaccord, as representative of the several underwriters named
in the certain underwriting agreement, relating to an underwritten public offering of
October 2025 Public Offering
Refer to Note 13 – Subsequent Events for information regarding the Company’s two October 2025 offerings completed under underwriting agreements with Canaccord, which included the issuance of additional shares of common stock and pre-funded warrants.
Note 11 - STOCK-BASED COMPENSATION
The
Company maintains the Dragonfly Energy Holdings Corp. Employee Stock Purchase Plan (the “ESPP”) which is designed to allow
eligible employees and the eligible employees of the Company’s participating subsidiaries to purchase shares of the Company’s
common stock, at semi-annual intervals, with their accumulated payroll deductions. A total of
| 31 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 11 - Stock-Based Compensation (Continued)
A summary of the Company’s option activity and related information follows:
SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION
| Number
of Options | Weighted- Average Exercise Price | Weighted- Average Grant Date Fair Value | Weighted- Average Remaining Contractual Life (in years) | Aggregate
intrinsic value | ||||||||||||||||
| Balances, January 1, 2025 | $ | $ | $ | - | ||||||||||||||||
| Options granted | - | - | - | - | - | |||||||||||||||
| Options forfeited | ( | ) | - | - | ||||||||||||||||
| Options expired | ( | ) | - | - | ||||||||||||||||
| Options exercised | - | - | - | - | - | |||||||||||||||
| Balances, September 30, 2025 | $ | $ | $ | - | ||||||||||||||||
| At September 30, 2025 | ||||||||||||||||||||
| Vested and Exercisable | $ | - | ||||||||||||||||||
| Vested and expected to vest | $ | - | ||||||||||||||||||
During the nine months ended September 30, 2025, the Company did not issue any stock options.
Share-based
compensation expense for options and RSUs totaling $
Of
the $
Of
the $
Restricted Stock Units
On
February 5, 2024, the Company granted
| 32 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 11 - Stock-Based Compensation (Continued)
Restricted Stock Units (continued)
On
April 12, 2024, the Company issued a total of
On
April 12, 2024, the board of directors authorized the issuance of
On
June 24, 2024, the Company granted
On
August 19, 2024, the Company granted
On
August 26, 2024, the Company granted
On
April 1, 2025 and May 19, 2025, the Company granted
The following table presents the RSU activity for the nine months ended September 30, 2025:
SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY
| Number
of Shares | Weighted- Average Fair Market Value | |||||||
| Unvested shares, January 1, 2025 | $ | |||||||
| Granted and unvested | ||||||||
| Forfeited | ( | ) | ||||||
| Vested | ( | ) | ||||||
| Unvested shares, September 30, 2025 | $ | |||||||
| 33 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 11 - Stock-Based Compensation (continued)
As
of September 30, 2025 and 2024 there were
Employee Stock Purchase Plan
The Company maintains the Dragonfly Energy Corporation, Inc. Employee Stock Purchase Plan (“ESPP”) which permits eligible employees to purchase shares at not less than 85% of the market value of the Company’s common stock on the offering date or the purchase date of the applicable offering period, whichever is lower. The plan was adopted by the Company’s Board of Directors on May 13, 2022.
On
April 24, 2024, the Company issued
During
the nine months ended September 30, 2025, the Company issued
| 34 |
Dragonfly Energy Holdings Corp.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - REPORTABLE SEGMENTS
The
Company has
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance for all of its reportable segments based on both segment gross and net profit or loss from operations.
For the DTC and OEM, the Chief Operating Decision Maker (“CODM”) uses both segment gross and net profit and loss from operations to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the annual budget and forecasting process.
Assets information for the reported segments is not disclosed as it is not used by the CODM in evaluating the performance of, or making decisions about, the reported segments.
The Company’s reportable segments are strategic business units that offer different branded products. They are managed separately because each segment requires different technology and marketing strategies.
The Company’s CODM is the Chief Executive Officer.
| 35 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
The following table presents the reportable segments information for the nine months ended September 30, 2025:
SCHEDULE OF REPORTABLE SEGMENTS INFORMATION
| DTC | OEM | Other | Total | |||||||||||||
| Net Sales | $ | $ | $ | (1) | $ | |||||||||||
| Reconciliation of Net Sales | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated Net Sales | $ | |||||||||||||||
| Direct material | - | |||||||||||||||
| Direct labor | - | |||||||||||||||
| Direct overhead and depreciation | - | |||||||||||||||
| Total Cost of Goods Sold | - | |||||||||||||||
| Gross profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Research & development | - | - | (2) | |||||||||||||
| Sales tax adjustment | - | - | ||||||||||||||
| Credit card & amazon transaction fees | - | - | ||||||||||||||
| Other general & administrative | - | - | (3) | |||||||||||||
| Shipping | - | |||||||||||||||
| Sales and marketing stock compensation | - | |||||||||||||||
| Sales and marketing wages | - | |||||||||||||||
| Marketing spend | - | |||||||||||||||
| Rent | - | |||||||||||||||
| Unallocated sales and marketing stock compensation | - | - | (4) | |||||||||||||
| Unallocated sales and marketing wages | - | - | (4) | |||||||||||||
| Other sales & marketing | - | - | (4) | |||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest expense, net | - | - | ( | )(5) | ( | ) | ||||||||||
| Change in FMV of warrant liability | - | - | ||||||||||||||
| Total Other Income (Expense) | - | - | ( | ) | ( | ) | ||||||||||
| Net Loss Before Taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income Tax Benefit | - | - | - | - | ||||||||||||
| Net Income (Loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Reconciliation of net loss | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated net loss | $ | ( | ) | |||||||||||||
| 36 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
| (1) |
| (2) |
| (3) |
| (4) |
| (5) |
There were no significant customer revenues from the Company’s DTC segment for the nine months ended September 30, 2025.
Revenues
from one customer of the Company’s OEM segment represent approximately $
| 37 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
The following table presents the reportable segments information for the nine months ended September 30, 2024:
| DTC | OEM | Other | Total | |||||||||||||
| Net Sales | $ | $ | $ | $ | ||||||||||||
| Reconciliation of Net Sales | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated Net Sales | $ | |||||||||||||||
| Direct material | - | |||||||||||||||
| Direct labor | - | |||||||||||||||
| Direct overhead and depreciation | - | |||||||||||||||
| Total Cost of Goods Sold | - | |||||||||||||||
| Gross profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Research & development | - | - | (1) | |||||||||||||
| Sales tax adjustment | - | - | ||||||||||||||
| Credit card & amazon transaction fees | - | - | ||||||||||||||
| Other general & administrative | - | - | (2) | |||||||||||||
| Shipping | - | |||||||||||||||
| Sales and marketing stock compensation | - | |||||||||||||||
| Sales and marketing wages | - | |||||||||||||||
| Marketing spend | - | |||||||||||||||
| Rent | - | |||||||||||||||
| Unallocated sales and marketing stock compensation | - | - | (3) | |||||||||||||
| Unallocated sales and marketing wages | - | - | (3) | |||||||||||||
| Other sales & marketing | - | - | (3) | |||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Income (Loss) from Operations | ( | ) | ( | ) | ||||||||||||
| Other income (expense) | - | - | ( | ) | ( | ) | ||||||||||
| Interest expense, net | - | - | ( | )(4) | ( | ) | ||||||||||
| Change in FMV of warrant liability | - | - | (4) | |||||||||||||
| Total Other Income (Expense) | - | - | ( | ) | ( | ) | ||||||||||
| Net Income (Loss) before taxes | ( | ) | ( | ) | ||||||||||||
| Income Tax Benefit | - | - | - | - | ||||||||||||
| Net Income (Loss) | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| Reconciliation of net loss | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated net loss | $ | ( | ) | |||||||||||||
| 38 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
| (1) |
| (2) |
| (3) |
| (4) |
There were no significant customer revenues from the Company’s DTC segment for the nine months ended September 30, 2024.
Revenues
from one customer of the Company’s OEM segment represent approximately $
| 39 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
he following table presents the reportable segments information for the three months ended September 30, 2025:
| DTC | OEM | Other | Total | |||||||||||||
| Net Sales | $ | $ | $ | (1) | $ | |||||||||||
| Reconciliation of Net Sales | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated Net Sales | $ | |||||||||||||||
| Direct material | - | |||||||||||||||
| Direct labor | - | |||||||||||||||
| Direct overhead and depreciation | - | |||||||||||||||
| Total Cost of Goods Sold | - | |||||||||||||||
| Gross profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Research & development | - | - | (2) | |||||||||||||
| Sales tax adjustment | - | - | ||||||||||||||
| Credit card & amazon transaction fees | - | - | ||||||||||||||
| Other general & administrative | - | - | (3) | |||||||||||||
| Shipping | - | |||||||||||||||
| Sales and marketing stock compensation | - | |||||||||||||||
| Sales and marketing wages | - | |||||||||||||||
| Marketing spend | - | |||||||||||||||
| Rent | - | |||||||||||||||
| Unallocated sales and marketing stock compensation | - | - | (4) | |||||||||||||
| Unallocated sales and marketing wages | - | - | (4) | |||||||||||||
| Other sales & marketing | - | - | (4) | |||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest expense, net | - | - | ( | )(5) | ( | ) | ||||||||||
| Change in FMV of warrant liability | - | - | ( | ) | ( | ) | ||||||||||
| Total Other Income (Expense) | - | - | ( | ) | ( | ) | ||||||||||
| Net Loss Before Taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income Tax Benefit | - | - | - | - | ||||||||||||
| Net Income (Loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Reconciliation of net loss | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated net loss | $ | ( | ) | |||||||||||||
| 40 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
| (1) |
| (2) |
| (3) |
| (4) |
| (5) |
There were no significant customer revenues from the Company’s DTC segment for the three months ended September 30, 2025.
Revenues
from one customer of the Company’s OEM segment represents approximately $
| 41 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
The following table presents the reportable segments information for the three months ended September 30, 2024:
| DTC | OEM | Other | Total | |||||||||||||
| Net Sales | $ | $ | $ | $ | ||||||||||||
| Reconciliation of Net Sales | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated Net Sales | $ | |||||||||||||||
| Direct material | - | |||||||||||||||
| Direct labor | - | |||||||||||||||
| Direct overhead and depreciation | - | |||||||||||||||
| Total Cost of Goods Sold | - | |||||||||||||||
| Gross profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Research & development | - | - | (1) | |||||||||||||
| Sales tax adjustment | - | - | ||||||||||||||
| Credit card & amazon transaction fees | - | - | ||||||||||||||
| Other general & administrative | - | - | (2) | |||||||||||||
| Shipping | - | |||||||||||||||
| Sales and marketing stock compensation | - | |||||||||||||||
| Sales and marketing wages | - | |||||||||||||||
| Marketing spend | - | |||||||||||||||
| Rent | - | |||||||||||||||
| Unallocated sales and marketing stock compensation | - | - | (3) | |||||||||||||
| Unallocated sales and marketing wages | - | - | (3) | |||||||||||||
| Other sales & marketing | - | - | (3) | |||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss from Operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Income (Loss) from Operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income (expense) | - | - | ( | ) | ( | ) | ||||||||||
| Interest expense, net | - | - | ( | )(4) | ( | ) | ||||||||||
| Change in FMV of warrant liability | - | - | (4) | |||||||||||||
| Total Other Income (Expense) | - | - | ( | ) | ( | ) | ||||||||||
| Net Loss before taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Net Income (Loss) before taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income Tax Benefit | - | - | - | - | ||||||||||||
| Net Income (Loss) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Reconciliation of net loss | ||||||||||||||||
| Reconciling items | - | |||||||||||||||
| Consolidated net loss | $ | ( | ) | |||||||||||||
| 42 |
DRAGONFLY ENERGY HOLDINGS CORP.
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
Note 12 - Reportable Segments (continued)
| (1) |
| (2) |
| (3) |
| (4) |
There were no significant customer revenues from the Company’s DTC segment for the three months ended September 30, 2024.
Revenues
from one customer of the Company’s OEM segment represent approximately $
Note 13 - SUBSEQUENT EVENTS
On
October 6, 2025, the Company entered into the First Offering Underwriting Agreement with Canaccord, as representative of the First Offering
Underwriters, relating to the First October 2025 Offering of
On
October 15, 2025 at the 2025 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company, the Company’s stockholders
approved an amendment (the “Plan Amendment”) to the Company’s 2022 Equity Incentive Plan (the “2022 Plan”)
increasing the number of shares available for issuance under the 2022 Plan by
On
October 16, 2025, the Company entered into the Second Offering Underwriting Agreement with Canaccord, as representative of the Second
Offering Underwriters, relating to the Second October 2025 Offering of (i)
On
October 20, 2025, the Company entered into the Sixth Amendment to the Term Loan Agreement to, among other matters, (i) adjust the fixed
interest rate of the remaining outstanding principal amount under the Term Loan Agreement to a fixed interest rate of
After the prepayments made as part of the First Offering
in the amount of $
| 43 |
DRAGONFLY ENERGY HOLDINGS CORP.
On
November 4, 2025, the Company and the lenders entered into the Exchange Agreement pursuant to which the Company issued
On November 4, 2025, the Company filed a Certificate of Designation of the Powers, Preferences and Relative, Participating,
Optional and Other Restrictions of Series B Convertible Preferred Stock of the Company (the “Series B Certificate of Designation”)
with the Secretary of State of the State of Nevada to establish the rights, privileges, preferences, and restrictions of the Series B
Preferred Stock. As set forth in the Certificate of Designation, the Company designated
On November 4, 2025, the Company issued
| 44 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us,” “our” or the “Company” refer to Dragonfly Energy Holdings Corp., a Nevada corporation. References to “Legacy Dragonfly” refer to Dragonfly Energy Corp., a Nevada corporation and one of our wholly-owned subsidiaries. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report and with our audited consolidated financial statements (and notes thereto) for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025 (the “Annual Report”), particularly those under “Risk Factors.” This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.
Cautionary Note Regarding Forward Looking-Statements
This Quarterly Report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “can,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future.
There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:
| ● | our ability to service our outstanding indebtedness and comply with the financial covenants in our loan agreement, the failure of which could allow our lenders to accelerate payment under our loan agreement, which would have a material adverse effect on our ability to operate and could require` among other things, to reduce operations, sell off our assets, seek the protection of bankruptcy courts or shut down our operations and dissolve; | |
| ● | our ability to raise additional capital to fund our operations; | |
| ● | our ability to successfully increase market penetration into target markets; | |
| ● | our ability to maintain the listing of our common stock and public warrants on the Nasdaq Capital Market; | |
| ● | the addressable markets that we intend to target do not grow as expected; | |
| ● | the potential for events or circumstances that result in our failure to timely achieve the anticipated benefits of our customer arrangements with THOR Industries and its affiliate brands (including Keystone RV Company (“Keystone”)), including Keystone’s decision in July 2023, that, due to weaker demand for its products and its subsequent focus on reducing costs, it would no longer install our storage solutions as standard equipment, but rather return to offering those solutions as an option to dealers and consumers; |
| 45 |
| ● | our ability to generate revenue from future product sales in our existing markets or new markets that we enter, including the trucking and industrials markets, and our ability to achieve and maintain profitability; | |
| ● | the loss of any members of our senior management team or other key personnel; | |
| ● | the loss of any relationships with key suppliers, including suppliers in China; | |
| ● | the loss of any relationships with key customers; | |
| ● | our ability to protect our patents and other intellectual property; | |
| ● | our ability to engage target customers and successfully retain these customers for future orders; | |
| ● | the failure to successfully optimize solid-state cells or to produce commercially viable solid-state cells in a timely manner or at all, or to scale to mass production; | |
| ● | the failure to produce lithium battery cells in the United States in a timely manner or at all, or to scale to mass production; | |
| ● | the failure to timely achieve the anticipated benefits of our recent licensing arrangement with Stryten Energy LLC (“Stryten”); | |
| ● | changes in applicable laws or regulations, including changes in the rates of tariffs or any adjustments to the amounts payable by us to customs as a result of improperly identifying the applicable tariff rate payable on our products; | |
| ● | the possibility that we may be adversely affected by other economic, business and/or competitive factors (including an economic slowdown or inflationary pressures); | |
| ● | our ability to sell the desired amounts of shares of common stock at desired prices under our committed equity facility; | |
| ● | the accuracy of our projections and estimates regarding our expenses, capital requirements, cash utilization, and need for additional financing; | |
| ● | developments relating to our competitors and our industry; | |
| ● | the reliance on two suppliers for our lithium iron phosphate cells and a single supplier for the manufacture of our battery management system; | |
| ● | our current dependence on one manufacturing facility; and | |
| ● | the potential impact of global and macroeconomic conditions, including economic, political and social instability, including the Russia-Ukraine conflict, the India-Pakistan conflict and Hamas’ attack on Israel, and their effects on our operations. |
The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in such forward-looking statements. Please see “Part I-Item 1A-Risk Factors” of our Annual Report and in this Quarterly Report for additional risks which could adversely impact our business and financial performance.
All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report or the date of the document incorporated by reference into this report. We have no obligation, and expressly disclaims any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith and believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished.
Overview
Our Business
We are a manufacturer of non-toxic deep cycle lithium-ion batteries that caters to customers in the consumer industry (including the recreational vehicle (“RV”), marine vessel, solar and off-grid residence industries), and trucking, industrial and energy storage markets, with proprietary, patented and disruptive battery cell manufacturing and non-flammable solid-state cell technology currently under development.
Since 2020, we have sold over 360,000 batteries. For the quarters ended September 30, 2025, and September 30, 2024, we sold 10,977 and 10,283 batteries, respectively, and had $16.0 million and $12.7 million in net sales, respectively. For the nine months ended September 30, 2025 and September 30, 2024, we sold 33,956 and 32,907 batteries, respectively, and had $45.6 million and $38.4 million in net sales, respectively. We currently offer several lines of batteries across our two brands, each differentiated by size, power and capacity, consisting of seven different models, which come with an option for internal heat for cold temperature operation or an option for wireless communication using our Dragonfly IntelLigence feature. We primarily sell “Battle Born” branded batteries directly to consumers (“DTC”) and “Dragonfly” branded batteries to original equipment manufacturers (“OEMs”).
Our increase in sales is a reflection of a slight recovery in the motorized RV market and increased market penetration as compared to prior quarter and prior year. Although our existing RV OEM customers have only slightly increased their year-over-year production rates, the incorporation of lithium storage systems has accelerated faster than the increase in RV units shipped. This is in contrast to the de-contenting trend that had occurred over the previous 18 months. DTC sales remained relatively flat, indicating generally constant consumer sentiment in the space.
| 46 |
During the third quarter of 2025, we continued to implement our corporate optimization initiative, prioritizing product development to drive near term revenue and profit. For instance, this strategic shift is accelerating our development of purpose-built solutions for the trucking and industrial markets, resulting in the recent launch of our Battle Born DualFlow Power Pack, a practical, cost-effective hybrid electrification solution for the trucking industry.
We currently source the lithium iron phosphate (“LFP”) cells incorporated into our batteries from a limited number of carefully selected suppliers that can meet our demanding quality standards and with whom we have developed long-term relationships.
To supplement our battery offerings, we are also a reseller of accessories for battery systems. These include chargers, inverters, monitors, controllers and other system accessories from brands such as Victron Energy, Progressive Dynamics, Magnum Energy and Sterling Power. Pursuant to the Asset Purchase Agreement dated April 22, 2022 by and among us and Thomason Jones Company, LLC (“Thomason Jones”) and the other parties thereto, we also acquired the assets, including the Wakespeed Offshore brand (“Wakespeed”) of Thomason Jones, allowing us to include our own alternator regulator in systems that we sell.
In addition to our conventional LFP batteries, we have been developing proprietary dry electrode cell manufacturing processes and solid-state cell technology. We believe that our solid-state technology design allows for a much safer, more efficient battery cell that we believe will be a key differentiator in the energy storage market.
In July 2023, we completed the construction of our proprietary and patented cell electrode manufacturing pilot line. Our patented dry deposition process is chemistry agnostic – meaning it can produce battery cells across a variety of chemistries – and is less capital intensive, uses less energy, and can produce cells in a smaller manufacturing footprint, leading to a lower total cost of manufacturing. In August 2023, we successfully demonstrated the ability to produce anode material at scale using this manufacturing process and did the same with cathode material in October 2023. We have since produced sample cells using PFAS-free binders and automotive-grade electrode loadings and C-rates, and are now working on the design and deployment of scaled-up coating equipment that can be applied to a GWh-scale factory, reflecting the shift in industry priorities from cell performance to cost-effective scalability.
As of September 30, 2025, we had cash totaling $3.8 million. Our net loss for the quarter ended September, 2025 was $11.1 million and our net loss for the quarter ended September 30, 2024 was $6.8 million. As set forth below, we raised additional capital and reduced a portion of our outstanding indebtedness after September 30, 2025.
As discussed under “—Liquidity and Capital Resources” below we expect that we will need to raise additional funds, including through the issuance of equity, equity-related or debt securities or by obtaining additional credit from financial institutions to fund, together with our principal sources of liquidity, ongoing costs. If such financings are not available, or if the terms of such financings are less desirable than we expect, we may be forced to take actions to reduce our capital or operating expenditures, including not seeking potential acquisition opportunities, eliminating redundancies, or reducing or delaying our production facility expansions, reduce operations, sell off our assets, seek the protection of bankruptcy courts or shut down our operations and dissolve.
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License Agreement with Stryten
On July 29, 2024, Legacy Dragonfly and Battle Born Battery Products, LLC (“Battle Born LLC”), a wholly-owned subsidiary of Legacy Dragonfly, entered into a License Agreement (the “License Agreement”) with Stryten. Pursuant to the License Agreement, Battle Born LLC granted Stryten an exclusive, worldwide license to use certain trademarks relating to Legacy Dragonfly’s lithium-ion battery brand, Battle Born Batteries® (the “Licensed Trademarks”) for business-to-business sales of batteries to customers within the following markets: (i) automative, (ii) marine, (iii) powersports, (iv) lawn and garden, (v) golf cart, and (vi) military and defense (such industries, the “Stryten Market”). In exchange for the licensing rights, Stryten agreed to pay Battle Born LLC an initial licensing fee of $5,000,000 (the “Initial Licensing Fee”), which was paid on August 29, 2024.
The License Agreement provides for mid-single digit royalty payments based on net sales using the Licensed Trademarks, with a tiered structure reaching up to $25,000,000, at which point Stryten will be required to pay a nominal annual license fee. Additional fees will apply for battery design and contract manufacturing services outside of the License Agreement. The License Agreement is perpetual in term, unless terminated by: (i) Battle Born LLC if Stryten fails to pay the royalty payments required by the License Agreement and such royalty payments remain unpaid thirty (30) days after notice of such overdue payments (provided that Battle Born LLC uses reasonable efforts to discuss such overdue payments with Stryten), or (ii) either party (x) if the other party materially breaches the License Agreement and fails to cure such material breach within thirty (30) days of notice of such breach, (y) upon the occurrence of certain bankruptcy-related events, or (z) under certain circumstances, if the aggregate royalty payments received by Battle Born LLC under the License Agreement are less than $15,000,000 after five (5) years.
Earnout Merger Consideration
In addition to the initial merger consideration in connection with our business combination in October of 2022, up to 4,444,445 additional shares of common stock (“Earnout Shares”) may be issued based on achieving specified milestones in three tranches:
| 1. | First Tranche (1,666,667 shares): Issuable if 2023 total audited revenue is at least $250 million and audited operating income is at least $35 million. This milestone was not achieved for 2023. | |
| 2. | Second Tranche (1,388,889 shares): Issuable if the volume-weighted average trading price of common stock reaches $202.50 over any 20 trading days within a 30-day period, on or before December 31, 2026. | |
| 3. | Third Tranche (1,388,889 shares): Issuable if the volume-weighted average trading price of common stock reaches $292.50 over any 20 trading days within a 30-day period, on or before December 31, 2028. |
If a change of control occurs during the second or third earnout periods, unachieved milestones will be automatically deemed satisfied if the share price at the time of the transaction meets or exceeds $202.50 for the second period or $292.50 for the third period.
ChEF Equity Facility
We and Chardan Capital Markets LLC, a New York limited liability company (“CCM LLC”) entered into a purchase agreement (as amended, the “ChEF Purchase Agreement”) and a Registration Rights Agreement in connection with our merger in October 2022 (the “Business Combination”). Pursuant to the Original Purchase Agreement, we have the right to sell to CCM LLC an amount of shares of common stock, up to a maximum aggregate purchase price of $150 million, pursuant to the terms of the ChEF Purchase Agreement (the “ChEF Equity Facility”), subject to certain restrictions set forth in the Term Loan Agreement (as defined below). The ChEF Purchase Agreement terminates in December 2025. In connection with the October 2025 Public Offering, we agreed not to sell shares of our common stock for a period of 90 days following the closing of the offering, subject to certain exceptions.
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February 2025 Registered Direct Offering and Concurrent Private Placement, Fifth Amendment to Term Loan Agreement and April 2025 Private Placement
On February 26, 2025, we entered into a securities purchase agreement with a single institutional investor, pursuant to which we sold in a registered direct offering (the “Registered Direct Offering”) 180 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), at a price of $10,000 per share, initially convertible into shares of our common stock, at a conversion price of $2.332 per share of common stock. The Series A Preferred Stock was also convertible by the investor at an adjusted conversion price, subject to the applicable floor price.
Concurrently with the sale of the Series A Preferred Stock in the Registered Direct Offering, in a private placement offering pursuant to the Purchase Agreement (the “Private Placement” and, together with the Registered Direct Offering, the “Offerings”), we sold, at the initial closing of the Private Placement (the “Initial Closing” and, together with the Registered Direct Offering, the “Initial Offerings”), (i) an additional 170 shares of Series A Preferred Stock at the same offering price as the Series A Preferred Stock offered in the Registered Direct Offering, initially convertible into shares of common stock at a conversion price of $2.332 per share, and (ii) warrants (the “Private Placement Convertible Preferred Warrants”) to purchase up to an aggregate of 4,000 shares of Series A Preferred Stock (the “Private Placement Warrant Shares”), with an exercise price of $10,000 per share of Series A Preferred Stock, and a term as described below.
The exercise price under each Private Placement Convertible Preferred Warrant was $10,000 per share of Series A Preferred Stock. Each Private Placement Convertible Preferred Warrant was exercisable for 200 shares of Series A Preferred Stock in minimum increments of $500,000. The Private Placement Convertible Preferred Warrants had a term beginning on the issuance date and ending on or prior to the earlier of (i) the thirty-three (33) month anniversary of the date the shares of common stock issued or issuable upon the conversion of the Series A Preferred Stock issued in the concurrent Private Placement were registered for resale (“Registration Effectiveness”) pursuant to an effective registration statement under the Securities Act of 1933, as amended, (the “Securities Act”) (such date, the “Registration Effectiveness Date”) and (ii) (A) the consummation of a Change of Control (as defined in the certificate of designation) and (B) the consummation of a redemption of the then outstanding Series A Preferred Stock in full. The exercise price and number of shares of Series A Preferred Stock issuable upon exercise was subject to appropriate adjustment in the event of share dividends, share splits, reorganizations or similar events affecting shares of our common stock.
On April 28, 2025, pursuant to the Purchase Agreement, we sold to the Purchaser, in the second closing of the Private Placement (the “Second Closing”) 450 Preferred Shares at a price of $10,000 per share, initially convertible into shares of common stock at a conversion price of $0.594 per share, subject to adjustment.
The net proceeds to us from the Initial Offerings and the Second Offering, after deducting the placement agent’s fees and expenses and estimated offering expenses, were approximately $3.2 million and $4.2 million, respectively, excluding the net proceeds, if any, from the exercise of the Private Placement Convertible Preferred Warrants.
As a condition precedent to the closing of the Initial Offerings, on February 26, 2025, we entered into the Fifth Amendment (the “Fifth Amendment”) to the Term Loan Agreement with the Term Loan Lenders. Under the Fifth Amendment, the Term Loan Lenders agreed to, among other matters (i) receive no principal or interest payments under the Term Loan Agreement through March 31, 2026, and (ii) remove certain financial covenant tests under the Term Loan, provided that we maintain cash and cash equivalents equal to at least $2.5 million through such date.
On June 23, 2025, we and the holder of Private Placement Convertible Preferred Warrants agreed to cancel such holder’s Private Placement Convertible Preferred Warrants to purchase up to an aggregate of 4,000 shares of Series A Preferred Stock, with an exercise price of $10,000 per share of Series A Preferred Stock. As a result, the Private Placement Convertible Preferred Warrants are no longer outstanding.
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On July 20, 2025, we entered into a Settlement and Release Agreement (the “Release Agreement”) with the holder of the outstanding shares of Series A Preferred Stock. Pursuant to the terms of the Release Agreement, we issued and delivered 2,100,000 shares of common stock to the holder and the holder surrendered to the Company all of the outstanding shares of Series A Preferred Stock. In addition, under the Release Agreement, upon the issuance of the shares of common stock, our obligations under the Purchase Agreement, the Certificate of Designation governing the Series A Preferred Stock and the other agreements entered into in connection with the offering of the Series A Preferred Stock were satisfied in full and the Purchase Agreement and the other agreements were deemed terminated and any remaining shares of Series A Preferred Stock that were outstanding or deemed to be outstanding were deemed cancelled and no longer outstanding. We have no further obligation to issue any shares of common stock or Series A Preferred Stock to the holder under the Purchase Agreement or otherwise. Under the Release Agreement, each party also provided a full release to the other party.
July 2025 Offering
On July 30, 2025, we entered into an underwriting agreement with Canaccord Genuity LLC (“Canaccord”), as representative of the several underwriters named in the certain underwriting agreement, relating to an underwritten public offering (the “July 2025 Public Offering”) of 21,980,000 shares of common stock, at a price to the public of $0.25 per share. On July 31, 2025, we completed the July 2025 Public Offering raising gross proceeds of approximately $5.5 million and net proceeds of $4.7 million after deducting underwriting discounts and commissions and other estimated offering expenses payable by us.
October 2025 Offerings
On October 6, 2025, we entered into an underwriting agreement with Canaccord, as representative of the several underwriters (the “First Offering Underwriters”) named in the underwriting agreement dated October 6, 2025, relating to an underwritten public offering (the “First October 2025 Offering”) of 20,000,000 shares of common stock at a price to the public of $1.25 per share, which includes the First Offering Underwriters’ option to purchase an additional 3,000,000 shares of common stock, at a public offering price of $1.25 per share. On October 8, 2025, we completed the First October 2025 Offering, including the full exercise of the additional 3,000,000 shares of common stock, raising gross proceeds of approximately $28.8 million and net proceeds of $26.9 million after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. On October 8, 2025 upon a request from our Term Loan Lenders under the term loan agreement, we repaid $4.0 million of principal to satisfy a portion of its outstanding principal under the Term Loan Agreement. On October 16, 2025, we entered into an additional underwriting agreement with Canaccord, as representative of the several underwriters (the “Second Offering Underwriters”) named in the underwriting agreement, dated October 17, 2025 (the “Second Offering Underwriting Agreement”), relating to an underwritten public offering (the “Second October 2025 Offering”) of 36,000,000 shares of common stock at a price to the public of $1.35 per share, and (ii) prefunded warrants (the “October 2025 Pre-Funded Warrants”) to purchase up to 5,000,000 shares of common stock (the “Pre-Funded Warrant Shares”) at a price to the public of $1.3499 per October 2025 Pre-Funded Warrant, which represents the per share public offering price for the Shares (as defined below) less the $0.0001 per share exercise price for each such Pre-Funded Warrant.
Sixth Amendment to Term Loan, Series B Preferred Stock Issuance and 2025 Debt Restructuring
In addition, our existing Term Loan Agreement (as defined below) with the Term Loan Lenders (as defined below) was amended on October 20, 2025 (the “Sixth Amendment”) to restructure our outstanding indebtedness. On November 4, 2025, we entered into an exchange agreement (the “Exchange Agreement”) with the Term Loan Lenders pursuant to we issued 25,000 shares of newly created Series B Convertible Preferred Stock (the “Series B Preferred Stock”) in exchange for $25.0 million outstanding principal amount of the Term Loan. Please see “- Liquidity and Capital Resources” below for additional information.
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Key Factors Affecting Our Operating Results
Our financial position and results of operations depend to a significant extent on the following factors:
End Market Consumers
The demand for our products ultimately depends on demand from consumers in our current end markets. We generate sales through (1) DTC and (2) through OEMs, particularly in the RV market.
An increasing proportion of our sales has been and is expected to continue to be derived from sales to RV OEMs, driven by continued efforts to develop and expand sales to RV OEMs with whom we have longstanding relationships. Our RV OEM sales have been on a purchase order basis, without firm revenue commitments, and we expect that this will likely continue to be the case. Therefore, future RV OEM sales will be subject to risks and uncertainties, including the number of RVs these OEMs manufacture and sell, which in turn may be driven by the expectations these OEMs have around end market consumer demand.
Demand from end market consumers is impacted by a number of factors, including travel restrictions, fuel costs and energy demands (including an increasing trend towards the use of green energy), as well as overall macro-economic conditions and inflation. Sales of our batteries have benefited from the increased adoption of the RV lifestyle, the demand for and inclusion of additional appliances and electronics in RVs, and the accelerating trend of solar power adoption among RV customers. However, macro-economic conditions and increased competition from imported battery packs have led to a decrease in direct to consumer sales. We have addressed this decrease through product diversification by the release of our Dragonfly IntelLigence feature, as well as more targeted marketing efforts to increase the efficiency of our marketing spend. We expect that direct to consumer sales will remain relatively flat through 2025. However, we expect growth among our existing RV OEM customers due to an overall increase in RV shipments as our customers expanding the number of models that will include our battery systems in the new model year. Moreover, we expect increased revenue through our market diversification efforts – especially in our industrials market, including industrial solar and oil and gas, as well as the trucking market, in which we have been piloting our systems with fleets for the last two years.
Our strategy includes plans to expand into new end markets that we have identified as opportunities for our LFP batteries, including, rail, specialty and work vehicles, material handling, solar integration, and emergency and standby power, in the medium term, and data centers, telecom and distributed on-grid storage in the longer term. We believe that our current LFP batteries and, eventually, our solid-state batteries, will be well-suited to supplant traditional lead-acid batteries as a reliable power source for the variety of low power density uses required in these markets (such as powering the increasing number of on-board tools needed in emergency vehicles). The success of this strategy requires (1) continued growth of these addressable markets in line with our expectations and (2) our ability to successfully enter these markets. We expect to incur significant marketing costs understanding these new markets, and researching and targeting customers in these end markets, which may not result in sales. If we fail to execute on this growth strategy in accordance with our expectations, our sales growth would be limited to the growth of existing products and existing end markets.
Supply
We currently rely on two carefully selected cell manufacturers located in China, and a single supplier, also located in China, to manufacture our proprietary battery management system. Our close working relationships with our China-based LFP cell suppliers, reflected in our ability to increase our purchase order volumes (qualifying us for related volume-based discounts) and order and receive delivery of cells in anticipation of required demand, has helped us moderate increased supply-related costs associated with inflation, currency fluctuations and U.S. government tariffs imposed on our imported battery cells and to avoid potential shipment delays. To mitigate against potential adverse production events, we opted to build our inventory of key components, such as battery cells. However, as many of the supply chain challenges and delays that were prevalent over the last several years have eased, we are actively working down our inventory to more appropriate safety stock levels.
As a result of our battery chemistry and active steps we have taken to manage our inventory levels, we have not been subject to the shortages or price impacts that have been present for manufacturers of nickel manganese cobalt and nickel cobalt aluminum batteries. As we look toward the production of our solid-state cells, we have signed a Commercial Offtake Agreement with a lithium mining company located in Nevada for the supply of lithium, which we expect will enable us to further manage our cost of goods over time.
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Product and Customer Mix
Our product sales consist of sales of seven different models of LFP batteries, along with accessories for battery systems (individually or bundled). These products are sold to different customer types (e.g., consumers, OEMs and distributors) and at different prices and involve varying levels of costs. In any particular period, changes in the mix and volume of particular products sold and the prices of those products relative to other products will impact our average selling price and our cost of goods sold. Despite our work to moderate increased supply-related costs, the price of our products may also increase as a result of increases in the cost of components due to inflation, currency fluctuations and tariffs. OEM sales typically result in lower average selling prices and related margins, which could result in margin erosion, negatively impact our growth or require us to raise our prices. However, this reduction is typically offset by the benefits of increased sales volumes. Sales of third-party sourced accessories typically have lower related margin. We expect accessory sales to increase as we further develop full-system design expertise and product offerings and consumers increasingly demand more sophisticated systems, rather than simple drop-in replacements. In addition to the impacts attributable to the general sales mix across our products and accessories, our results of operations are impacted by the relative margins of products sold. As we continue to introduce new products at varying price points, our overall gross margin may vary from period to period as a result of changes in product and customer mix.
Production Capacity
All of our battery assembly currently takes place at our 390,240 square foot headquarters and manufacturing facility located in Reno, Nevada. While the lease for the 99,000 facility is continuing, no manufacturing is taking place in this location. We currently operate three LFP battery production lines. Consistent with our operating history, we plan to continue to automate additional aspects of our battery production lines. Our existing facility has the capacity to add up to four additional LFP battery production lines and construct and operate a pilot production line for our solid-state cells, all designed to maximize the capacity of our manufacturing facility. Although our automation efforts are expected to reduce our costs of goods, we may not fully recognize the anticipated savings when planned and could experience additional costs or disruptions to our production activities. We have also focused on optimizing our manufacturing efficiency and throughput, enabling us to increase our production capacity without the need for increased headcount.
Competition
We compete with traditional lead-acid battery manufacturers and lithium-ion battery manufacturers, who primarily either import their products or components or manufacture products under a private label. As we continue to expand into new markets, develop new products and move towards production of our own conventional LFP cells and, in the longer term, solid state cells, we will experience competition with a wider range of companies. These competitors may have greater resources than we do and may be able to devote greater resources to the development of their current and future technologies. Our competitors may be able to source materials and components at lower costs, which may require us to evaluate measures to reduce our own costs, lower the price of our products or increase sales volumes in order to maintain our expected levels of profitability.
Research and Development
Our research and development is currently primarily focused on the scaling our proprietary dry electrode process for domestic production of full LFP cells. Although we have reallocated resources from the advanced manufacturing of solid-state lithium-ion batteries in order to focus on conventional cells, we expect to return to the solid-state chemistry as capital becomes more available for these longer term projects.
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Components of Results of Operations
Net Sales
Net sales are primarily generated from the sale of our LFP batteries to OEMs and directly to consumers, as well as chargers and other accessories, either individually or bundled.
Cost of Goods Sold
Cost of goods sold includes the cost of cells and other components of our LFP batteries, labor and overhead, logistics and freight costs, and depreciation of manufacturing equipment.
Gross Profit
Gross profit, calculated as net sales less cost of goods sold, may vary between periods and is primarily affected by various factors including average selling prices, product costs, product mix and customer mix.
Operating Expenses
Research and development
Research and development costs include personnel-related expenses for scientists, experienced engineers and technicians as well as the material and supplies to support the development of new products and our solid-state technology.
General and administrative
General and administrative costs include personnel-related expenses attributable to our executive, finance, human resources, and information technology organizations, certain facility costs, and fees for professional services.
Selling and marketing
Selling and marketing costs include outbound freight, personnel-related expenses, as well as trade show, industry event, marketing, customer support, and other indirect costs. We expect to continue to make the necessary sales and marketing investments to enable the execution of our strategy, which includes expanding into additional end markets.
Total Other (Expense
Other expense consists primarily of interest expense, the change in fair value of the warrant liability and amortization of debt issuance costs.
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Results of Operations
Comparisons for the Three months ended September 30, 2025, and September 30, 2024
The following table sets forth our results of operations for the three months ended September 30, 2025 and September 30, 2024. This data should be read together with our financial statements and related notes included elsewhere in this Quarterly Report, and is qualified in its entirety by reference to such financial statements and related notes.
| Three months ended September 30, | ||||||||||||||||
| 2025 | % Net Sales | 2024 | % Net Sales | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net Sales | $ | 15,967 | 100.0 | $ | 12,720 | 100.0 | ||||||||||
| Cost of Goods Sold | 11,231 | 70.3 | 9,850 | 77.4 | ||||||||||||
| Gross profit | 4,736 | 29.7 | 2,870 | 22.6 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 585 | 3.7 | 1,631 | 12.8 | ||||||||||||
| General and administrative | 5,299 | 33.2 | 4,361 | 34.3 | ||||||||||||
| Sales and marketing | 2,630 | 16.5 | 2,904 | 22.8 | ||||||||||||
| Total Operating expenses | 8,514 | 53.3 | 8,896 | 69.9 | ||||||||||||
| Loss From Operations | (3,778 | ) | (23.7 | ) | (6,026 | ) | (47.4 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense, net | (6,409 | ) | (40.1 | ) | (5,615 | ) | (44.1 | ) | ||||||||
| Other expense | - | - | (13 | ) | (0.1 | ) | ||||||||||
| Change in fair market value of warrant liability | (883 | ) | (5.5 | ) | 4,875 | 38.3 | ||||||||||
| Total Other Expense | (7,292 | ) | (45.7 | ) | (753 | ) | (5.9 | ) | ||||||||
| Loss Before Taxes | (11,070 | ) | (69.3 | ) | (6,779 | ) | (53.3 | ) | ||||||||
| Income Tax Benefit | - | - | - | - | ||||||||||||
| Net Loss | $ | (11,070 | ) | (69.3 | ) | $ | (6,779 | ) | (53.3 | ) | ||||||
| Three months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| DTC | 5,038 | 5,153 | ||||||
| % Net Sales | 31.6 | 40.5 | ||||||
| OEM | 10,679 | 7,400 | ||||||
| % Net Sales | 66.9 | 58.2 | ||||||
| Licensing Fee | 250 | 167 | ||||||
| % Net Sales | 1.5 | 1.3 | ||||||
| Net Sales | $ | 15,967 | 12,720 | |||||
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Net Sales
Net sales increased by $3.2 million, or 25.5%, to $16.0 million for the three months ended September 30, 2025, as compared to $12.7 million for the three months ended September 30, 2024. This increase was primarily due to higher OEM battery and accessory sales of new models to existing customers. We expect our sales to increase in the coming quarters as our customers expand the number of models that include our battery systems in the new model year and our entrance into new markets, trucking and industrials, with new product offerings.
Cost of Goods Sold
Cost of goods sold increased by $1.4 million, or 14.0%, to $11.2 million for the three months ended September 30, 2025, as compared to $9.9 million for the three months ended September 30, 2024. This increase was primarily due to product and labor costs due to higher unit volume of OEM accessories. Overhead also increased due to allocation of expense related for the new lease. We expect our Cost of Goods Sold to increase in conjunction with the anticipated increase in revenue over the next 12 months.
Gross Profit
Gross profit increased by $1.9 million, or 65.0%, to $4.7 million for the three months ended September 30, 2025, as compared to $2.9 million for the three months ended September 30, 2024. The increase in gross profit was primarily due to a higher unit volume of OEM accessory sales. Gross Profit percentage increased by 7.1% to 29.7% for the three months ended September 30, 2025, as compared to 22.6% for the three months ended September 30, 2024. This is primarily due to sales of higher margin accessory units and assemblies.
Research and Development Expenses
Research and development expenses decreased by $1.0 million, or 64.1%, to $0.6 million for the three months ended September 30, 2025, as compared to $1.6 million for the three months ended September 30, 2024. The decrease was primarily a result of lower wage expense in the amount of $0.7 million due to change in bonus accrual and reduced headcount. Overhead expense allocation is lower by $0.2 million and reduced spend of $0.1 million on patents and materials and supplies. We expect Research and Development expenses to be lower than last year as we change our focus from Solid State to Product Development.
General and Administrative Expenses
General and administrative expenses increased by $0.9 million, or 21.5%, to $5.3 million for the three months ended September 30, 2025, as compared to $4.4 million for the three months ended September 30, 2024. This increase was primarily due to an increase wage expense of $0.3 million due to increased headcount associated with the focus on product development, an increase in lease and depreciation expense and the impairment of one lease and related leasehold improvements in the amount of $0.6 million. We expect General and Administrative Expenses, as a percentage of revenue, to be relatively stable over the next 12 months.
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Selling and Marketing Expenses
Sales and marketing expenses decreased by $0.3 million, or 9.4%, to $2.6 million for the three months ended September 30, 2025, as compared to $2.9 million for the three months ended September 30, 2024. This decrease was primarily due to lower employee-related costs. We expect our Selling and Marketing Expenses to be relatively stable over the next 12 months.
Total Other Expense
Other expense totaled $7.3 million for the three months ended September 30, 2025 as compared to total other expense of $0.8 million for the three months ended September 30, 2024. Other expense of $7.3 million in three months ended September 30, 2025 was comprised primarily of interest expense of $6.4 million related to our debt securities and a negative change in fair market value of warrant liability in the amount of $0.9 million. The $0.8 million of other expense in three months ended September 30, 2024 was comprised primarily of interest expense of $5.6 million related to our debt securities offset by a positive change in fair market value of warrant liability in the amount of $4.9 million.
Income Tax (Benefit) Expense
There was no tax expense recorded for the three months ended September 30, 2025 or the three months ended September 30, 2024. Based on available evidence as of September 30, 2025 and September 30, 2024, management believes it is more likely than not that some or all the deferred tax assets will not be realized. Accordingly, we established a 100% valuation allowance. As a result of the full valuation allowance, we did not record a tax benefit during the three months ended September 30, 2025 or the three months ended September 30, 2024.
Net Loss
We experienced a net loss of $11.1 million for the three months ended September 30, 2025, as compared to net loss of $6.8 million for the three months ended September 30, 2024. As described above, this result was driven by higher sales of higher margin accessory units, lower operating expenses, and an increase in other expense (due to higher interest expense and the change in fair market value of our warrants).
Comparisons for the Nine months ended September 30, 2025 and September 30, 2024
The following table sets forth our results of operations for the nine months ended September 30, 2025, and the nine months ended September 30, 2024. This data should be read together with our financial statements and related notes included elsewhere in this Quarterly Report, and is qualified in its entirety by reference to such financial statements and related notes.
| Nine months ended September 30, | ||||||||||||||||
| 2025 | % Net Sales | 2024 | % Net Sales | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net Sales | $ | 45,571 | 100.0 | $ | 38,433 | 100.0 | ||||||||||
| Cost of Goods Sold | 32,302 | 70.9 | 29,345 | 76.4 | ||||||||||||
| Gross profit | 13,269 | 29.1 | 9,088 | 23.6 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 2,277 | 5.0 | 4,495 | 11.7 | ||||||||||||
| General and administrative | 16,275 | 35.7 | 14,878 | 38.7 | ||||||||||||
| Sales and marketing | 7,690 | 16.9 | 8,329 | 21.7 | ||||||||||||
| Total Operating expenses | 26,242 | 57.6 | 27,702 | 72.1 | ||||||||||||
| (Loss) From Operations | (12,973 | ) | (28.5 | ) | (18,614 | ) | (48.4 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense, net | (16,552 | ) | (36.3 | ) | (15,253 | ) | (39.7 | ) | ||||||||
| Other expense | - | - | (36 | ) | (0.1 | ) | ||||||||||
| Change in fair market value of warrant liability | 4,624 | 10.1 | 3,130 | 8.1 | ||||||||||||
| Total Other (Expense) Income | (11,928 | ) | (26.2 | ) | (12,159 | ) | (31.6 | ) | ||||||||
| Loss Before Taxes | (24,901 | ) | (54.6 | ) | (30,773 | ) | (80.1 | ) | ||||||||
| Income Tax Benefit | - | - | - | - | ||||||||||||
| Net Loss | $ | (24,901 | ) | (54.6 | ) | $ | (30,773 | ) | (80.1 | ) | ||||||
| Nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| DTC | 16,001 | 16,890 | ||||||
| % Net Sales | 35.1 | 44.0 | ||||||
| OEM | 28,820 | 21,376 | ||||||
| % Net Sales | 63.3 | 55.6 | ||||||
| Licensing fee | 750 | 167 | ||||||
| % Net Sales | 1.6 | 0.4 | ||||||
| Net Sales | $ | 45,571 | 38,433 | |||||
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Net Sales
Net sales increased by $7.1 million, or 18.6%, to $45.6 million for the nine months ended September 30, 2025, as compared to $38.4 million for the nine months ended September 30, 2024. This increase was primarily due to higher OEM battery and accessory sales of new models to existing customers and licensing revenue which is part of the Stryten agreement entered into the second half of 2024. We expect our sales to increase in the next 12 months as our customers expand the number of models they include our battery systems in for the new model year and our entrance into new markets, trucking and industrials, with new product offerings.
Cost of Goods Sold
Cost of goods sold increased by $3.0 million, or 10.1%, to $32.3 million for the nine months ended September 30, 2025, as compared to $29.3 million for the nine months ended September 30, 2024. This increase was primarily due to product and labor costs related to higher unit volume of accessory units. Overhead increased due to allocation of expense related to the new lease. We expect our Cost of goods sold to increase in conjunction with the anticipated increase in revenue and higher tariffs over the next 12 months.
Gross Profit
Gross profit increased by $4.2 million, or 46.0%, to $13.3 million for the nine months ended September 30, 2025, as compared to $9.1 million for the nine months ended September 30, 2024. The increase in gross profit was primarily due to a higher unit volume of accessory sales. Gross Profit percentage increased by 5.5% to 29.1% for the nine months ended September 30, 2025, as compared to 23.6% for the nine months ended September 30, 2024. This is primarily due to sales of higher margin accessory units and assemblies.
Research and Development Expenses
Research and development expenses decreased by $2.2 million, or 49.3%, to $2.3 million for the nine months ended September 30, 2025, as compared to $4.5 million for the nine months ended September 30, 2024. The decrease was primarily a result of lower employee related expense in the amount of $1.6 million due to change in bonus accrual and reduced headcount along with lower rent, travel and supplies. We expect Research and Development expenses to be lower than last year as we change our focus from Solid State to Product Development.
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General and Administrative Expenses
General and administrative expenses increased by $1.4 million, or 9.4%, to $16.3 million for the nine months ended September 30, 2025, as compared to $14.9 million for the nine months ended September 30, 2024. This increase was primarily due the allocation of lease and depreciation expense of $1.7 million on our properties and impairment of one lease and related leasehold improvements of $0.6 million partially offset by a decrease in legal and professional services of $0.8 million. We expect General and Administrative Expenses, as a percentage of revenue, to be relatively stable over the next 12 months.
Selling and Marketing Expenses
Sales and marketing expenses decreased by $0.6 million, or 7.7%, to $7.7 million for the nine months ended September 30, 2025, as compared to $8.3 million for the nine months ended September 30, 2024. This decrease was primarily due to lower employee related costs in the amount of $0.9 million primarily related to a change in bonus accrual and lower headcount. Partially offsetting this decrease is higher shipping costs in the amount of $0.3 million related to an increase in units sold. We expected Selling and Marketing Expenses, as a percentage of revenue, to be relatively stable over the next 12 months.
Total Other Expense
Other expense totaled $11.9 million for the nine months ended September 30, 2025 as compared to total other expense of $12.2 million for the nine months ended September 30, 2024. Other expense for the nine months ended September 30, 2025 is comprised of $16.5 million in interest expense related to our debt securities partially offset by a positive change in fair market value of our warrants in the amount of $4.6 million. Other expense for the nine months ended September 30, 2024 is comprised of $15.3 million in interest expense related to our debt securities partially offset by a positive change in fair market value of our warrants in the amount of $3.1 million.
Income Tax (Benefit) Expense
There was no tax expense recorded for the nine months ended September 30, 2025 or the nine months ended September 30, 2024. Based on available evidence as of September 30, 2025 and September 30, 2024, management believes it is more likely than not that some or all the deferred tax assets will not be realized. Accordingly, we established a 100% valuation allowance. As a result of the full valuation allowance, we did not record a tax benefit during the nine months ended September 30, 2025 or the nine months ended September 30, 2024.
Net Loss
We generated a net loss of $24.9 million for the nine months ended September 30, 2025, as compared to net loss of $30.8 million for the nine months ended September 30, 2024. As described above, this result was driven by higher sales of higher margin accessory sales and lower operating expenses.
Critical Accounting Estimates
Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the consolidated financial statements prospectively from the date of the change in the estimate.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our board of directors. In addition, there are other items within our financial statements that require estimation but are not deemed critical as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements.
We believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Inventory Valuation
We periodically review physical inventory for excess, obsolete, and potentially impaired items and reserves. Any such inventory is written down to net realizable value. The reserve estimate for excess and obsolete inventory is dependent on expected future use and requires management judgement. The level of the estimate is assessed by considering the recent sales experience, the aging of inventories, and other factors that affect inventory obsolescence
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Warrants
We apply relevant accounting guidance for warrants to purchase our stock based on the nature of the relationship with the counterparty. For warrants issued to investors or lenders in exchange for cash or other financial assets, we follow guidance issued within ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”), to assist in the determination of whether the warrants should be classified as liabilities or equity. Warrants that are determined to require liability classifications are measured at fair value upon issuance and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings. Warrants that are determined to require equity classifications are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. See “Note 8—Warrants” in our accompanying condensed consolidated financial statements for information on the warrants. Changes in assumptions used to estimate fair value could occur from stock pricing volatility depending on our performance and our position in the industry and changes in market interest rates which can result in materially different results.
Equity-Based Compensation
We use the Black-Scholes option-pricing model to determine the fair value of option grants. In estimating fair value, management is required to make certain assumptions and estimates such as the expected life of units, volatility of our future share price, risk-free rates, future dividend yields and estimated forfeitures at the initial grant date. Restricted stock unit awards are valued based on the closing trading price of our common stock on the date of grant. Changes in assumptions used to estimate fair value could occur from stock pricing volatility depending on our performance and our position in the industry and changes in market interest rates which can result in materially different results.
Income Taxes
We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted rates. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date.
We recognize the financial statement effect of an uncertain income tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized. A valuation allowance is recorded to reduce deferred income tax assets to an amount, which in the opinion of management is more likely than not to be realized.
Management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years; reversal of deferred tax liabilities; projected future taxable income exclusive of temporary differences; the character of the income tax asset, including income tax positions; tax planning strategies and the period over which we expect the deferred tax assets to be recovered in the determination of the valuation allowance. In the event that actual results differ from these estimates or we adjust our estimates in the future, we may need to adjust our valuation allowance, which could materially impact our financial position and results of operations.
The amount of the deferred tax asset considered realizable could be adjusted if our actual results in the future do not generate taxable income that is sufficient to allow us to utilize our deferred tax assets. Our future taxable income projections are subject to a high degree of uncertainty and could be impacted, both positively and negatively, by changes in our business or the markets in which we operate. A change in the assessment of the realizability of our deferred tax assets could materially impact our results of operations.
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Leases
Acquired right-of-use assets and assumed lease liabilities are measured based on the remaining lease payments over the remaining portion of the lease term. As our leases do not provide an implicit rate, our incremental borrowing rate is used as a discount rate in determining the present value of lease payments. Our incremental borrowing rate was determined by comparing current low- and high-end mortgage loan rates and calculating an average. To be conservative in our estimate, we chose to use the high-end average as our incremental borrowing rate for all lease arrangements.
License Arrangement
We have entered into license arrangements that involve receiving upfront compensation, which is recognized as revenue over a five-year period. Management estimates the appropriate recognition pattern based on the expected delivery of related services and the period over which the economic benefits will be realized. This estimate involves judgments about the timing of performance obligations and the likelihood of continued customer engagement. Changes in these assumptions or unexpected developments could result in adjustments to revenue recognition, impacting the financial statements. As of the reporting date, management believes the estimate reflects the current understanding of the license arrangements’ performance obligations.
Tariffs
We import certain components used in the manufacturing of our products and are responsible for calculating and paying the applicable tariffs. Tariff obligations involve significant judgment, including interpretation of customs classifications, trade agreements, and dutiable values.
Non-GAAP Financial Measures
This Quarterly Report includes a non-generally accepted account principles within the United States (“U.S. GAAP”) measure that we use to supplement our results presented in accordance with U.S. GAAP. Earnings before interest tax and amortization (“EBITDA”) is defined as earnings before interest and other income (expenses), income taxes, and depreciation and amortization. Adjusted EBITDA is calculated as EBITDA adjusted for stock-based compensation, change in fair market value of warrant liabilities, non-recurring costs associated with strategic financing, reverse stock split, litigation and loss on settlement. Adjusted EBITDA is a performance measure that we believe is useful to investors and analysts because it illustrates the underlying financial and business trends relating to our core, recurring results of operations and enhances comparability between periods.
Adjusted EBITDA is not a recognized measure under U.S. GAAP and is not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Investors should exercise caution in comparing our non-GAAP measure to any similarly titled measure used by other companies. This non-GAAP measure excludes certain items required by U.S. GAAP and should not be considered as an alternative to information reported in accordance with U.S. GAAP.
The table below presents our adjusted EBITDA, reconciled to net (loss) income for the three and nine months ended September 30, 2025, and September 30, 2024.
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| Net loss | $ | (11,070 | ) | $ | (6,779 | ) | $ | (24,901 | ) | $ | (30,773 | ) | ||||
| Interest Expense | 6,409 | 5,615 | 16,552 | 15,253 | ||||||||||||
| Depreciation and Amortization | 460 | 327 | 1,811 | 991 | ||||||||||||
| EBITDA | (4,201 | ) | (837 | ) | (6,538 | ) | (14,529 | ) | ||||||||
| Adjusted for: | ||||||||||||||||
| Stock-Based Compensation (1) | 168 | 256 | 579 | 759 | ||||||||||||
| Change in fair market value of warrant liability (2) | 883 | (4,875 | ) | (4,624 | ) | (3,130 | ) | |||||||||
| Non-Recurring/One-Time Expenses: | ||||||||||||||||
| Litigation Fees and loss on settlement (3) | - | - | 573 | - | ||||||||||||
| Prior year tariff estimate adjustment(4) | - | - | 287 | - | ||||||||||||
| Preferred Stock Financing Expenses(5) | 13 | - | 686 | - | ||||||||||||
| Impairment of right-of-use asset and disposal of associated assets(6) | 611 | - | 611 | - | ||||||||||||
| Debt Restructure(7) | 354 | - | 354 | - | ||||||||||||
| Severance | 35 | - | 35 | - | ||||||||||||
| Reverse Stock Split(8) | - | - | 15 | - | ||||||||||||
| Adjusted EBITDA | $ | (2,137 | ) | $ | (5,456 | ) | $ | (8,022 | ) | $ | (16,900 | ) | ||||
| (1) | Stock-Based Compensation is comprised of costs associated with option and RSU grants made to our employees, consultants and board members. |
| (2) | Change in fair market value of warrant liabilities represents the change in fair value from January 1, 2025 through September 30, 2025 and January 1, 2024 through September 30, 2024, respectively. |
| (3) | Litigation Fees and Loss on Settlement includes legal fees and expenses and settlement related to the International Trade Commission ‘ITC’ LithiumHub patent infringement case and other. |
| (4) | Revision to estimate of prior year tariff underpayment. |
| (5) | Preferred Stock Financing is comprised of the expense relating to the Offerings. |
| (6) | Impairment of Lease and leasehold improvements from our previous main office.
|
| (7) | Debt Restructure expenses including legal and professional services.
|
| (8) | Reverse Stock Split includes transfer agent and legal expenses and fees related to the reverse stock split with the SEC. |
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Liquidity and Capital Resources
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities. As of September 30, 2025, we had cash totaling $3.8 million.
Subsequent to September 30, 2025, we completed the First October 2025 Offering and the Second October 2025 Offering for net proceeds of approximately $26.9 million and $51.9 million, respectively. Please see “-October 2025 Offerings” above for additional information.
On October 20, 2205, we entered into the Sixth Amendment to the Term Loan Agreement with the Term Loan Lenders to, among other matters, (i) adjust the fixed interest rate of the remaining outstanding principal amount under the Term Loan Agreement to a fixed interest rate of 12% per annum, payable monthly commencing December 31, 2025 that will mature in October 2027, and (ii) waive any applicable financial covenants (except for a financial covenant requiring us to maintain cash and cash equivalents equal to or greater than $5.0 million) through December 31, 2026. In connection with the Sixth Amendment, (i) we made a prepayment of $45.0 million of outstanding indebtedness under the Term Loan Agreement from the net proceeds from the Second October 2025 Offering (the “Loan Prepayment”), (ii) the Term Loan Lenders forgave the repayment of $5.0 million of the outstanding principal under the Term Loan Agreement, (iii) we paid a fee to the Term Loan Lenders equal to approximately $450,000 in cash and $450,000 added to principal outstanding amount of the loan under the Term Loan Agreement; and (iv) we issued 25,000 shares of Series B Preferred Stock in exchange for $25.0 million outstanding principal amount of the Term Loan. The remaining outstanding principal amount under the Term Loan Agreement of approximately $19.0 million, after the repayment and forgiveness disclosed above, will have a fixed interest rate of 12% per annum, payable monthly commencing December 31, 2025 and will mature in October 2027. In addition, certain covenants under the Term Loan Agreement have been waived through December 31, 2026, and we have agreed to a minimum liquidity covenant of $5.0 million calculated on a monthly basis.
On November 4, 2025, we filed a Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Restrictions of Series B Convertible Preferred Stock (the “Series B Certificate of Designation”) with the Secretary of State of the State of Nevada to establish the rights, privileges, preferences, and restrictions of the Series B Preferred Stock. As set forth in the Certificate of Designation, we designated 25,000 shares of preferred stock as Series B Preferred Stock with a stated value of $1,000 per share. The Series B Preferred Stock is convertible into shares of common stock at the option of the Term Lenders at a conversion price of $3.15 per share, or an aggregate of 7,936,508 shares of common stock.
On November 4, 2025, we entered into the Exchange Agreement with the Term Loan Lenders pursuant to we issued 25,000 shares of newly created Series B Preferred Stock in exchange for $25.0 million outstanding principal amount of the Term Loan. The Series B Preferred Stock (i) is convertible into shares of common stock at the option of the Term Loan Lenders at a conversion price of $3.15 per share, or an aggregate of 7,936,508 shares of common stock, (ii) has a dividend of 8% per annum payable quarterly in cash and (iii) has a dividend of 2% per annum payable quarterly in kind (“PIK Dividends”), which includes the aggregate amount of all paid PIK Dividends and any accrued and unpaid PIK Dividends on the applicable dividend date. In addition, we have a right to redeem any outstanding shares of the Series B Preferred Stock at our option at the greater of (i) the stated value plus any outstanding dividends and (ii) the as-converted value of the shares of common stock underlying the Series B Preferred Stock (the “Optional Redemption Price”). The Term Loan Lenders have also agreed not to convert any shares of the Series B Preferred Stock for a period of six months following the issuance of the Series B Preferred Stock. In connection with any future equity offerings, we will be required to use 50% of the net proceeds from such offering to redeem outstanding shares of the Series B Preferred Stock at the Optional Redemption Price. In the event we have not redeemed the outstanding shares of Series B Preferred Stock by October 7, 2027 or upon the occurrence of a Non-Payment Event (as defined in the Series B Certificate of Designation), the holders will have the right to require us to redeem the Series B Preferred Stock at the Optional Redemption Price.
We expect that we will need to raise additional funds, including through the issuance of equity, equity-related or debt securities or by obtaining additional credit from financial institutions to fund, together with our principal sources of liquidity, ongoing costs, such as research and development relating to our solid-state batteries, expansion of our facilities, and new strategic investments. If such financings are not available, or if the terms of such financings are less desirable than we expect, we may be forced to take actions to reduce our capital or operating expenditures, including by not seeking potential acquisition opportunities, eliminating redundancies, or reducing or delaying our production facility expansions, reduce operations, sell off our assets, seek the protection of bankruptcy courts or shut down our operations and dissolve. Further, any future debt or equity financings may be dilutive to our current stockholders.
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Financing Obligations and Requirements
On November 24, 2021, we issued $45.0 million of fixed rate senior notes, secured by among other things, a security interest in our intellectual property. As part of the Business Combination, we entered into a senior secured term loan facility in an aggregate principal amount of $75 million (the “Term Loan”) pursuant to the Term Loan, Guarantee and Security Agreement (the “Original Term Loan Agreement” and, as amended, the “Term Loan Agreement”) by and among, us, Legacy Dragonfly, Alter Domus (US) LLC, as the Agent to the lenders time-to-time party thereto (such lenders, the “Term Loan Lenders”), the proceeds of which were used to repay the $45 million fixed rate senior notes, and ChEF Equity Facility.
As described in “-Liquidity and Capital Resources” above, under the Sixth Amendment, we (i) prepaid $45.0 million of principal using proceeds from the Second October 2025 Offering, (ii) exchanged $25.0 million of principal for Series B Preferred Stock (convertible at $3.15 per share, with 8% cash and 2% “in kind” dividends), and (iii) had $5.0 million of principal forgiven by the Term Loan Lenders. Following these transactions, approximately $19.0 million of principal remained outstanding under the Term Loan, bearing 12% interest payable monthly and maturing in October 2027. We paid $0.9 million in fees (half in cash, half added to principal) and obtained covenant waivers through December 2026, subject to maintaining $5.0 million of minimum liquidity.
The Sixth Amendment significantly improved our liquidity by reducing total debt from $72.0 million to approximately $19.0 million and deferring near-term cash interest requirements through the preferred stock exchange and covenant waivers.
The Term Loan proceeds were used to: (i) support the Business Combination, (ii) prepay the fixed rate senior notes at closing of the Business Combination, (iii) pay fees and expenses in connection with the foregoing, (iv) to provide additional growth capital and (v) for other general/corporate purposes. The Term Loan will mature on October 7, 2027, or the Maturity Date, and will be subject to quarterly amortization of 5% per annum beginning 24 months after issuance. The definitive documents for the Term Loan incorporate certain mandatory prepayment events and certain affirmative and negative covenants and exceptions hereto. The financial covenants for the Term Loan include a maximum senior leverage ratio covenant, a minimum liquidity covenant, a springing fixed charge coverage ratio covenant, and a maximum capital expenditures covenant. In accordance with U.S. GAAP, we reclassified our notes payable from a long-term liability to a current liability. The Term Loan accrues interest as follows: (i) until April 1, 2024, at a per annum rate equal to adjusted secured overnight financing rate (“SOFR”) plus 7% payable in cash plus an amount ranging from 4.5% to 6.5%, depending on our senior leverage ratio; (ii) effective April 1, 2024 and thereafter, interest payable to certain lenders subject to regulations of the U.S. Small Business Administration (“SBA”) with outstanding principal on that date of $30,846 will be limited to 14.0% per annum (except for default interest permitted under SBA regulations, as applicable); and (iii) the other outstanding principal will accrue interest from April 1, 2024 thereafter until October 1, 2024, at a per annum rate equal to adjusted SOFR plus 7% payable in cash plus an amount ranging from 4.5% to 6.5%, depending on the senior leverage ratio of the consolidated company, and at all times thereafter, at a per annum rate equal to adjusted SOFR plus a margin ranging from 11.5% to 13.5%, depending on our senior leverage ratio.
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The Term Loan is secured by substantially all assets of the Company, Battle Born LLC and Legacy Dragonfly, and we pledged our equity interests in Battle Born LLC and Legacy Dragonfly as additional collateral. In connection with the Business Combination, the Term Loan Lenders also received Penny Warrants and $10 Warrants.
During the year ended December 31, 2024, we issued 350,423 shares pursuant to the ChEF Purchase Agreement with CCM LLC for aggregate proceeds to us of $2,043,885. During the nine months ended September 30, 2025, we issued 23,160 shares pursuant to the ChEF Purchase Agreement for aggregate proceeds to us of $62,846. Subsequent to the quarter ended September 30, 2025, we have not issued any shares pursuant to the ChEF Purchase Agreement. The ChEF Purchase Agreement terminates in December 2025. In connection with the July 2025 Offering, we agreed not to sell shares of our common stock for a period of 90 days following the closing of the offering, subject to certain exceptions
In 2024, we identified an underpayment of tariffs to U.S. Customs and Border Protection (“CBP”) in the amount of approximately $1.66 million in the aggregate, related to the improper classification and valuation of certain of the products used in our batteries. We have reported the underpayment to CBP. In June 2025, after a comprehensive review of this tariff calculation, an additional $0.29 million was discovered and also reported to CBP and a payment plan of $0.05 million per week was put into place.
Going Concern
For the quarter ended September 30, 2025, we generated a net loss of $11.1 million and had a negative cash flow from operations. As of September 30, 2025, we had approximately $3.8 million in cash and cash equivalents and working capital of $8.8 million.
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In addition, as described above in “Liquidity and Capital Resources”, we completed 2 offerings raising $78.8 million and on October 20, 2025, we entered into the Sixth Amendment to restructure our outstanding indebtedness.
These strategic initiatives, along with continued revenue generation anticipated in the next twelve months and our ability to maintain covenant compliance, we have concluded that the substantial doubt regarding our ability to continue as a going concern has been mitigated.
We performed the following pro-forma financials as of September 30, 2025 to take into consideration the transactions above had they occurred as of the current quarter end:
| September 30, 2025 | ||||||||||||||||
Actual |
Capital Raise | Debt Restructuring Adjustment |
Pro-forma | |||||||||||||
| (in thousands) | ||||||||||||||||
| Current Assets | 34,509 | 74,854 | (45,466 | ) | 63,897 | |||||||||||
| Long Term Assets | 39,334 | - | - | 39,334 | ||||||||||||
| Total Assets | $ | 73,843 | $ | 74,854 | $ | (45,466 | ) | $ | 103,231 | |||||||
| Current Liabilities | 25,675 | - | 42 | 25,717 | ||||||||||||
| Long-Term Liabilities | 69,745 | (4,000 | ) | (32,733 | ) | 33,012 | ||||||||||
| Total Liabilities | $ | 95,420 | $ | (4,000 | ) | $ | (32,691 | ) | $ | 58,729 | ||||||
| Redeemable Preferred stock | ||||||||||||||||
| Preferred stock – Series B 25,000 shares at $0.0001 par value authorized, | - | - | 25,000 | 25,000 | ||||||||||||
| Common stock | 6 | - | - | 6 | ||||||||||||
| Additional paid in capital | 85,472 | 78,854 | - | 164,326 | ||||||||||||
| Accumulated deficit | (107,055 | ) | - | (37,774 | ) | (144,829 | ) | |||||||||
| Total Stockholders’ (Deficit) Equity | (21,577 | ) | 78,854 | (12,774 | ) | 44,502 | ||||||||||
| Total Liabilities, Redeemable Preferred Stock and Stockholders’ (Deficit) Equity | $ | 73,843 | $ | 74,854 | $ | (45,466 | ) | $ | 103,231 | |||||||
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Cash Flows for the Nine months ended September 30, 2025, and September 30, 2024
| Nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Net Cash (used in)/provided by: | ||||||||
| Operating Activities | $ | (11,245 | ) | $ | (4,685 | ) | ||
| Investing activities | $ | (1,808 | ) | $ | (1,691 | ) | ||
| Financing activities | $ | 12,042 | $ | 1,682 | ||||
Operating Activities
Net cash used in operating activities was $11.2 million for the nine months ended September 30, 2025, primarily due to a net loss of $24.9 million partially offset by $11.2 million of payment in-kind interest accrued on the Term Loan.
Net cash used in operating activities was $4.7 million for nine months ended September 30, 2024, primarily due to a net loss of $30.8 million partially offset by $4.8 million in deferred revenue related to the License Agreement, $6.6 million of payment in-kind interest accrued on the Term Loan and $14.8 million decrease in inventory as a result of management’s decision to lower overall stocking levels to adjust for more modest demand.
Investing Activities
Net cash used in investing activities was $1.8 million for the nine months ended September 30, 2025, as compared to net cash used in investing activities of $1.7 million for the nine months ended September 30, 2024. The cash used in investing activities was primarily due to capital expenses to support our core battery business.
Financing Activities
Net cash provided by financing activities was $12.0 million for the nine months ended September 30, 2025, primarily related to net proceeds of $7.3 million as part of the Purchase Agreement entered into in February 2025 and $4.7 million as part of the public offering in July 2025. This is compared to $1.7 million net cash provided in financing activities primarily from proceeds of issuing and selling shares under ChEF Equity Facility for the nine months ended June 30, 2024.
Contractual Obligations
Our estimated future obligations consist of short-term and long-term operating lease liabilities. As of September 30, 2025, we had $2.9 million in short-term operating lease and financing liabilities and $21.1 million in long-term operating and financing lease liabilities.
As disclosed above, we have a Term Loan and as of September 30, 2025, the principal amount outstanding under the Term Loan was $69.9 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, and the rules and regulations thereunder, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and implementation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2025. Based on that evaluation, management concluded that as of September 30, 2025, we did maintain effective disclosure controls and procedures.
Changes in Internal Control over Financial Reporting
No changes in our internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K may not be the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.
There were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K except as noted below.
If we do not continue to meet the continued listing requirements for The Nasdaq Capital Market, our common stock may be delisted, which could affect the market price and liquidity for our common stock and reduce our ability to raise additional capital.
Our common stock and [public warrants] are currently listed for trading on The Nasdaq Capital Market. We must satisfy the continued listing requirements of Nasdaq to maintain the listing of our securities on The Nasdaq Capital Market.
On December 12, 2024, we received a written notice (the “Notice”) from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market, LLC (“Nasdaq”) indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(2), which requires us to maintain a minimum Market Value of Listed Securities (“MVLS”) of $35 million for continued listing on The Nasdaq Capital Market (the “MVLS Requirement”) for the 30 consecutive business days preceding receipt of the Notice.
On May 14, 2025, we received a letter (the “Letter”) from the Staff indicating that, based upon our non-compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the “Bid Price Requirement”), the Staff had determined to delist our securities from Nasdaq unless we timely request a hearing before the Nasdaq Hearings Panel (the “Panel”). Pursuant to Listing Rule 5810(c)(3)(A)(iv), we are not eligible for any compliance period due to the fact that we have effected a reverse stock split over the prior one-year period. We timely requested a hearing before the Panel.
On June 11, 2025, we received an additional staff determination letter indicating that, based upon our non-compliance with the MVLS Requirement, the Staff had determined such non-compliance served as an additional basis for delisting our securities from Nasdaq.
On July 2, 2025, following our hearing with the Panel on June 24, 2025, we received notice from Nasdaq that, based on the plan of compliance that we had submitted, the Panel had granted us an exception until November 10, 2025 (the “Exception”) to regain compliance with the Bid Price Requirement and the MVLS Requirement, subject to our achievement of certain milestones.
On October 20, 2025, we received a letter from the Nasdaq Hearings Panel of the Nasdaq Stock Market, LLC stating that because our common stock, par value $0.0001, had a closing bid price at or above $1.00 per share for a minimum of 10 consecutive business days, we had regained compliance with the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq Capital Market (the “Minimum Bid Price Requirement”), as set forth in Nasdaq Listing Rule 5550(a)(2). Additionally, the Letter stated that because the our market value of listed securities had been $35 million or greater for a minimum of 10 consecutive business days, we had also regained compliance with the minimum market value of listed securities requirement for continued listing on the Nasdaq Capital Market (the “MVLS Requirement”), as set forth in Nasdaq Listing Rule 5550(b)(2). Accordingly, as of such date, we were in full compliance with Nasdaq’s continued listing requirements, and these matters are now closed. Pursuant to Nasdaq Listing Rule 5815(d)(4)(B), we will be subject to a Mandatory Panel Monitor through October 20, 2026. If, within that one-year monitoring period, we fail to maintain compliance with the Minimum Bid Price Requirement, the staff of the Nasdaq Listing Qualifications Department (the “Staff”) will issue a Delist Determination Letter, and we will have an opportunity to request a new hearing with the initial Panel or a newly convened Panel if the initial Panel is unavailable. Notwithstanding Nasdaq Listing Rule 5810(c)(2), we will not be permitted to provide the Staff with a plan of compliance with respect to any deficiency that arises during the one-year monitoring period, and the Staff will not be permitted to grant additional time for us to regain compliance with respect to any deficiency. Currently, our common stock is trading at less than $1.00, and in the event we are unable to continue to meet the Minimum Bid Price Requirement, we will need to complete a reverse stock split of our common stock. In October 2025, our stockholders approved a proposal to authorize our board of directors, in its discretion at any time within one year after such stockholder approval, to effect a reverse stock split of only the then-outstanding shares of our common stock (with no change to our authorized capital stock), at a ratio of not less than one-for-two (1:2) and not greater than one-for-fifty (1:50), with the exact ratio to be determined by our board of directors and included in a public announcement.
We must satisfy Nasdaq’s continued listing requirements, including, among other things, the Minimum Bid Price Requirement and the MVLS Requirement, or risk delisting, which could have a material adverse effect on our business. A delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal pre-emption of state securities laws, result in a default under the terms of our outstanding indebtedness, adversely affect its ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of our common stock may decline further and stockholders may lose some or all of their investment. There can be no assurance that we will be able to maintain compliance with the Minimum Bid Price Requirement or comply with the other continued listing standards of the Nasdaq Capital Market.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5. OTHER INFORMATION
During
the three months ended September 30, 2025, none of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange
Act)
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| Incorporation by Reference | ||||||||
| Exhibit No. | Description | Form | Exhibit | Filing Date | ||||
| 1.1 | Underwriting Agreement, dated October 6, 2025, by and between Dragonfly Energy Holdings Corp. and Canaccord Genuity LLC. | 8-K | 1.1 | 10/06/2025 | ||||
| 1.2 | Underwriting Agreement, dated October 16, 2025, by and between Dragonfly Energy Holdings Corp. and Canaccord Genuity LLC. | 8-K/A | 1.1 | 10/16/2025 | ||||
| 3.1 | Articles of Incorporation of Dragonfly Energy Holdings Corp. | 8-K | 3.1 | 03/31/2023 | ||||
| 3.2 | Bylaws of Dragonfly Energy Holdings Corp. | 8-K | 3.2 | 03/31/2023 | ||||
| 3.3 | Certificate of Amendment to the Articles of Incorporation of Dragonfly Energy Holdings Corp., dated April 25, 2025. | 8-K | 3.1 | 04/28/2025 | ||||
| 3.4 | Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Restrictions of Series B Convertible Preferred Stock. | 8-K | 3.1 | 11/04/2025 | ||||
| 4.1 | Form of October 2025 Pre-Funded Warrant. | 8-K | 4.1 | 10/16/2025 | ||||
| 10.1 | Form of Settlement and Mutual Release Agreement, dated July 20, 2025, by and between the Company and the investor party thereto. | 8-K | 10.1 | 07/21/2025 | ||||
| 10.3 | Amendment to the Dragonfly Energy Holdings Corp.’s 2022 Equity Incentive Plan. | 8-K | 10.1 | 10/15/2025 | ||||
| 10.4 | Sixth Amendment to Term Loan, Guarantee and Security Agreement, dated as of October 20, 2025, by and among the Company, Dragonfly Energy Corp., Battle Born Battery Products, LLC, the lenders from time to time party thereto and Alter Domus (US) LLC. | 8-K | 10.1 | 10/20/2025 | ||||
| 10.5 | Exchange Agreement, dated November 4, 2025, by and among Dragonfly Energy Holdings Corp. and the lenders party thereto. | 8-K | 10.1 | 11/04/2025 | ||||
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS* | Inline XBRL Instance Document. | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document and included as Exhibit 101). | |||||||
| * | Filed herewith. |
| ** | Furnished. |
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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, thereunto duly authorized.
| Dragonfly Energy Holdings Corp. | ||
| Date: November 14, 2025 | By: | /s/ Denis Phares |
| Denis Phares | ||
| Chief Executive Officer, President and Interim Chief Financial Officer | ||
| (Principal Executive Officer and Principal Financial and Accounting Officer) | ||
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FAQ
What were Dragonfly Energy (DFLI) Q3 2025 revenues and profit metrics?
How did DFLI perform year-to-date through Q3 2025?
What is DFLI’s liquidity position as of September 30, 2025?
What changes occurred to DFLI’s debt after quarter-end?
What equity financings did DFLI complete in October 2025?
Did management address going concern risks?
How many common shares were outstanding?
