8-K: Dragonfly Energy Prices $5.5 Million Public Offering of Common Stock

Dragonfly Energy Holdings Corp. announced the pricing of an underwritten public offering of 21,980,000 shares of common stock at $0.25 per share, raising approximately $5.5 million in gross proceeds.

Summary

• Dragonfly Energy Holdings Corp. entered into an underwriting agreement with Canaccord Genuity LLC for an underwritten public offering of 21,980,000 shares of its common stock.
• The shares are priced at $0.25 per share, resulting in gross proceeds of approximately $5.5 million.
• Net proceeds to the Company are expected to be approximately $4.9 million, after deducting underwriting discounts and commissions and other estimated offering expenses.
• The offering is expected to close on or about July 31, 2025, subject to customary closing conditions.
• The Company intends to use the net proceeds for working capital, other general corporate purposes, and the repayment of its indebtedness.
• Dragonfly Energy has agreed to certain restrictions on the issuance and sale of its common stock and convertible securities for a 90-day period following the date of the Underwriting Agreement.
• Executive officers, directors, and certain stockholders are also subject to lock-up agreements for the 90-day restricted period.

Sentiment

Score: 3

Explanation: The offering provides needed capital but at a significantly dilutive price point, indicating potential financial strain and negatively impacting existing shareholder value.

Positives

• The offering provides approximately $4.9 million in net proceeds, enhancing the Company's working capital and liquidity.
• Funds will be used for general corporate purposes and repayment of indebtedness, addressing immediate financial needs.

Negatives

• The offering involves the sale of 21,980,000 shares at $0.25 per share, which is a low price point and represents significant dilution for existing shareholders.
• The Company's common stock market value held by non-affiliates was $19,670,766 as of July 29, 2025, indicating the offering represents a substantial portion relative to the existing market capitalization.
• The 90-day lock-up period for the Company and insiders restricts future capital-raising flexibility or share sales by key personnel.

Risks

• General market conditions could impact the Company's ability to complete the offering on favorable terms, or at all.
• Risks and uncertainties associated with the Company's business and finances in general, as detailed in its Annual Report on Form 10-K for the year ended December 31, 2024, and the Prospectus Supplement.
• There can be no assurances that the offering will be completed on the anticipated terms, or at all.

Future Outlook

The Company intends to use the net proceeds from the offering for working capital, general corporate purposes, and repayment of indebtedness. The offering is expected to close on or about July 31, 2025, subject to customary closing conditions.

Management Comments

• Dragonfly Energy intends to use the net proceeds from the proposed offering for working capital and other general corporate purposes, including the repayment of its indebtedness in the ordinary course.

Industry Context

NA

Stakeholder Impact

• Shareholders: Significant dilution due to the issuance of new shares at a low price, potentially decreasing the value of existing holdings.
• Creditors: Proceeds will be used for repayment of indebtedness, which could improve the Company's debt servicing capacity and reduce credit risk.
• Company Operations: Increased working capital and general corporate funds could support ongoing operations and strategic initiatives.

Next Steps

• The offering is expected to close on or about July 31, 2025, subject to customary closing conditions.
• The Company will use the net proceeds for working capital, general corporate purposes, and repayment of indebtedness.
• The Company and certain insiders are subject to a 90-day lock-up period.

Key Dates

Recommendation

The significant dilution from the issuance of 21,980,000 shares at a very low price of $0.25, coupled with the Company's relatively small existing market capitalization, suggests a distressed capital raise. While the funds address immediate working capital and debt repayment needs, the terms are highly unfavorable for existing shareholders, indicating potential underlying financial weakness and a substantial reduction in per-share value.

Keywords

Lithium Battery, Energy Storage, Battery Technology, Public Offering, Common Stock, Underwriting Agreement, Capital Raise, Dilution, Nasdaq, DFLI, Battle Born Batteries, Dry Electrode Manufacturing, All-Solid-State Battery Cells