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Dragonfly Energy Files Annual Report on Form 10-K and Updates Operating Results for the Fourth Quarter and Year ended December 31, 2022
Source: Nasdaq GlobeNewswire / 17 Apr 2023 16:58:42 America/New_York
RENO, Nev., April 17, 2023 (GLOBE NEWSWIRE) -- Dragonfly Energy Holdings Corp. (“Dragonfly” or the “Company”) (Nasdaq: DFLI), an industry leader in energy storage and producer of deep cycle lithium-ion storage batteries, today filed its Annual Report on Form 10-K and updated its financial results for the fourth quarter and audited full year ended December 31, 2022.
On March 29, 2023, the Company announced its unaudited financial results for the year ended December 31, 2022 and provided the press release under Items 2.02 and 9.01 of Form 8-K on that day. In connection with the completion of the 2022 audit, $19.8 million in deal-related expenses from the Company’s October 7, 2022 Business Combination, which were initially recognized within equity, were classified as general and administrative expenses. These expenses were unique to the Business Combination and are not expected to recur in future quarters. This press release updates and supersedes the press release issued on March 29, 2023 to reflect adjustments to the Company’s financial results. For additional information on these changes, including the Company’s audited financial statements for the year ending December 31, 2022, please see the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) earlier today.
Dragonfly’s Net Sales and Gross Profit remain unchanged. Below, please find a summary of the of the adjustments to operations from preliminary to final results.
Adjustments from preliminary to final results:
Fourth quarter 2022 Full Year 2022 ($ thousands) Preliminary Change Final Preliminary Change Final Operating Expenses ($12,481 ) ($20,460 ) ($32,941 ) ($37,541 ) ($20,460 ) ($58,001 ) Net (Loss) Income ($11,655 ) ($20,460 ) ($32,115 ) ($19,111 ) ($20,460 ) ($39,571 ) EBITDA ($7,843 ) ($19,750 ) ($27,593 ) ($12,645 ) ($19,799 ) ($32,444 ) Adj. EBITDA ($4,833 ) $458 ($4,375 ) ($7,951 ) $411 ($7,540 ) About Dragonfly
Dragonfly Energy Holdings Corp. (Nasdaq: DFLI) headquartered in Reno, Nevada, is a leading supplier of deep cycle lithium-ion batteries. Dragonfly’s research and development initiatives are revolutionizing the energy storage industry through innovative technologies and manufacturing processes. Today, Dragonfly’s non-toxic deep cycle lithium-ion batteries are displacing lead-acid batteries across a wide range of end-markets, including RVs, marine vessels, off-grid installations, and other storage applications. Dragonfly is also focused on delivering an energy storage solution to enable a more sustainable and reliable smart grid through the future deployment of the Company’s proprietary and patented solid-state cell technology. To learn more, visit www.dragonflyenergy.com/investors.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s intent, belief or expectations, including, but not limited to planned products and services, business strategy and plans, market size and growth opportunities, competitive position and technological and market trends. Some of these forward-looking statements can be identified by the use of forward-looking words, including “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “plan,” “targets,” “projects,” “could,” “would,” “continue,” “forecast” or the negatives of these terms or variations of them or similar expressions. These forward-looking statements are subject to risks, uncertainties, and other factors (some of which are beyond the Company’s control) which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to: the Company’s ability to recognize the anticipated benefits of the of the Company’s recent business combination with Chardan NexTech Acquisition 2 Corp. and related transactions; the Company’s ability to successfully increase market penetration into target markets; the growth of the addressable markets that the Company intends to target; the Company’s ability to access capital as and when needed under its $150 million ChEF Equity Facility; the Company’s ability to protect its patents and other intellectual property; and the Company’s ability to generate revenue from future product sales and its ability to achieve and maintain profitability. These and other risks and uncertainties are described more fully in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on April 17, 2023 and in the Company’s other filings with the SEC.If any of these risks materialize or any of the Company’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company presently does not know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements contained in this press release speak only as of the date they were made. Except to the extent required by law, the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.
Investor Relations
Sioban Hickie, ICR, Inc.
DragonflyIR@icrinc.com
Dragonfly Energy Holdings Corp. Balance Sheet Years Ended December 31, 2022 and 2021 (in thousands) 2022 2021 Current Assets Cash $ 17,781 $ 25,586 Restricted cash - 3,044 Accounts receivable, net of allowance for doubtful accounts 1,444 783 Inventory 49,846 27,127 Prepaid expenses 1,624 293 Prepaid inventory 2,002 7,461 Prepaid income tax 525 - Other current assets 267 1,787 Total Current Assets 73,489 66,081 Property and Equipment Property and Equipment, Net 10,760 4,461 Operating lease right of use asset 4,513 5,709 Total Assets $ 88,762 $ 76,251 Current Liabilities Accounts payable $ 13,475 $ 11,360 Accrued payroll and other liabilities 6,295 2,608 Customer deposits 238 434 Uncertain tax position liability 128 - Income tax payable - 631 Notes payable, current portion, net of debt issuance costs 19,242 1,875 Operating lease liability, current portion 1,188 1,082 Total Current Liabilities 40,566 17,990 Long‑Term Liabilities Notes payable‑non current, net of debt discount - 37,053 Warrant liabilities 32,831 - Deferred tax liabilities - 453 Accrued expenses‑long term 492 - Operating lease liability, net of current portion 3,541 4,694 Total Long‑Term Liabilities 36,864 42,200 Total Liabilities 77,430 60,190 Equity Common stock, 170,000,000 shares at $0.0001 par value, authorized, 43,272,728 and 36,496,998 shares issued and outstanding as of December 31, 2022 and 2021, respectively 4 4 Preferred stock, 5,000,000 shares at $0.0001 par value, authorized, no shares issued and outstanding as of December 31, 2022 and 2021, respectively - - Additional paid in capital 38,461 3,619 Retained (deficit) earnings (27,133 ) 12,438 Total Equity 11,332 16,061 Total Liabilities and Shareholders' Equity $ 88,762 $ 76,251 Dragonfly Energy Holdings Corp.
Statement of Operations
Years Ended December 31, 2022 and 2021
(in thousands, except share and per share data)2022 2021 Net Sales $ 86,251 $ 78,000 Cost of Goods Sold 62,247 48,375 Gross Profit 24,004 29,625 Operating Expenses Research and development 2,764 2,689 General and administrative 41,566 10,621 Selling and marketing 13,671 9,848 Total Operating Expenses 58,001 23,158 (Loss) Income From Operations (33,997 ) 6,467 Other Income (Expense) Other Income 40 1 Interest expense (6,945 ) (519 ) Change in fair market value of warrant liability 5,446 - Debt extinguishment (4,824 ) - Total Other Expense (6,283 ) (518 ) (Loss) Income Before Taxes (40,280 ) 5,949 Income Tax (Benefit) Expense (709 ) 1,611 Net (Loss) Income $ (39,571 ) $ 4,338 (Loss) Earnings Per Share- Basic $ (1.03 ) $ 0.12 (Loss) Earnings Per Share- Diluted $ (1.03 ) $ 0.11 Weighted Average Number of Shares- Basic 38,565,307 35,579,137 Weighted Average Number of Shares- Diluted 38,565,307 37,742,337 Dragonfly Energy Holdings Corp. Statement of Cash Flows Years Ended December 31, 2022 and 2021 (in thousands) 2022 2021 Cash flows from Operating Activities Net (Loss) Income $ (39,571 ) $ 4,338 Adjustments to Reconcile Net (Loss) Income to Net Cash Used in Operating Activities Stock based compensation 2,467 734 Debt extinguishment 4,824 - Amortization of debt discount 1,822 206 Change in fair market value of warrant liability (5,446 ) - Deferred tax liability (453 ) 122 Non‑cash interest expense (paid‑in kind) 1,192 - Provision for doubtful accounts 108 50 Depreciation and amortization 891 617 Loss on disposal of property and equipment 56 124 Assumption of Warrant Liability 1,990 - Changes in Assets and Liabilities Accounts receivable (769 ) 1,007 Inventories (22,719 ) (21,179 ) Prepaid expenses (1,467 ) 58 Prepaid inventory 5,459 (6,353 ) Other current assets 1,520 (1,214 ) Other assets 1,196 1,029 Income taxes payable (1,156 ) (651 ) Accounts payable and accrued expenses 4,428 8,903 Uncertain tax position liability 128 (19 ) Customer deposits (196 ) (1,345 ) Total Adjustments (6,125 ) (17,911 ) Net Cash Used in Operating Activities (45,696 ) (13,573 ) Cash Flows From Investing Activities Proceeds from disposal of property and equipment 35 61 Purchase of property and equipment (6,862 ) (2,970 ) Net Cash Used in Investing Activities (6,827 ) (2,909 ) Cash Flows From Financing Activities Proceeds from term loan 75,000 - Proceeds from note payable - 45,000 Repayment from note payable (45,000 ) - Payments of debt issuance costs (4,032 ) (6,278 ) Proceeds from exercise of options 706 184 Proceeds from stock purchase agreement 15,000 - Proceeds from revolving note agreement - 5,000 Repayments of revolving note agreement - (5,000 ) Net Cash Provided by Financing Activities 41,674 38,906 Net (Decrease) / Increase in Cash and Restricted Cash (10,849 ) 22,424 Beginning cash and restricted cash 28,630 6,206 Ending cash and restricted cash $ 17,781 $ 28,630 Supplemental Disclosures of Cash Flow Information: Cash paid for income taxes $ 773 $ 2,390 Cash paid for interest $ 2,252 $ 313 Supplemental Non‑Cash Items Receivable of options exercised $ - $ 250 Purchases of property and equipment, not yet paid $ 419 $ 255 Recognition of right of use asset obtained in exchange for operating lease liability $ - $ 5,745 Cashless exercise of liability classified warrants $ 16,669 $ - Dragonfly Energy Holdings Corp.
Statement of Operations
Quarters Ended December 31, 2022 and 2021
(in thousands, except share and per share data)Unaudited 2022 2021 Net Sales $ 20,209 $ 20,179 Cost of Goods Sold 15,766 14,061 Gross Profit 4,443 6,118 Operating Expenses Research and development 813 790 General and administrative 27,788 2,191 Selling and marketing 4,340 3,194 Total Operating Expenses 32,941 6,175 (Loss) Income From Operations (28,498 ) (57 ) Other Income (Expense) Other Income 40 1 Interest expense (3,288 ) (395 ) Change in fair market value of warrant liability 5,446 - Debt extinguishment (4,824 ) - Total Other Expense (2,626 ) (394 ) (Loss) Income Before Taxes (31,124 ) (451 ) Income Tax (Benefit) Expense 991 (371 ) Net (Loss) Income $ (32,115 ) $ (80 ) (Loss) Earnings Per Share- Basic $ (0.75 ) $ (0.00 ) (Loss) Earnings Per Share- Diluted $ (0.75 ) $ (0.00 ) Weighted Average Number of Shares- Basic 42,948,026 36,102,440 Weighted Average Number of Shares- Diluted 42,948,026 36,102,440 Use of Non-GAAP Financial Measures
The Company provides non-GAAP financial measures including EBITDA and Adjusted EBITDA as a supplement to GAAP financial information to enhance the overall understanding of the Company’s financial performance and to assist investors in evaluating the Company’s results of operations, period over period. Adjusted non-GAAP measures exclude significant unusual items. Investors should consider these non-GAAP measures as a supplement to, and not a substitute for financial information prepared on a GAAP basis.
Adjusted EBITDA
Adjusted EBITDA is considered a non-GAAP financial measure under the rules of the SEC because it excludes certain amounts included in net loss calculated in accordance with GAAP. Specifically, the Company calculates Adjusted EBITDA by GAAP net loss adjusted to exclude stock-based compensation expense, business combination related expenses and other one-time, non-recurring items.The Company has included Adjusted EBITDA because it is a key measure used by Dragonfly’s management team to evaluate its operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses. As such, the Company believes Adjusted EBITDA is helpful in highlighting trends in the ongoing core operating results of the business.
Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of net loss or other results as reported under GAAP. Some of these limitations are:
● Adjusted EBITDA does not reflect the Company’s cash expenditures, future requirements for capital expenditures, or contractual commitments; ● Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs; ● Adjusted EBITDA does not reflect the Company’s tax expense or the cash requirements to pay taxes; ● although amortization and depreciation are non-cash charges, the assets being amortized and depreciated will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; ● Adjusted EBITDA should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items for which the Company may adjust in historical periods; and ● other companies in the industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure. Reconciliations of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
The following table presents reconciliations of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measure for each of the periods indicated.Dragonfly Energy Holdings Corp. Years Ended December 31, 2022 and 2021 (in thousands, except share and per share data) 2022 2021 EBITDA Calculation Net (Loss) Income $ (39,571 ) $ 4,338 Plus: Interest 6,945 518 Plus: Taxes (709 ) 1,611 Plus: Depreciation & Amortization 891 617 EBITDA $ (32,444 ) $ 7,084 Adjustments to EBITDA Plus: Stock Based Compensation 2,467 734 Plus: ERP Implementation - 233 Plus: Promissory Note Forgiveness 469 - Plus: Loss on Disposal of Assets 56 124 Plus: Separation Agreement 1,197 - Plus: Debt-Extinguishment 4,824 - Plus: Change in fair market value of warrant liability (5,446 ) - Plus: Business Combination Expenses 21,337 295 Adjusted EBITDA $ (7,540 ) $ 8,470 Dragonfly Energy Holdings Corp. Statement of Operations Quarters Ended December 31, 2022 and 2021 (in thousands, except share and per share data) Unaudited 2022 2021 EBITDA Calculation Net (Loss) Income $ (32,115 ) $ (80 ) Plus: Interest 3,288 394 Plus: Taxes 991 (371 ) Plus: Depreciation & Amortization 243 185 EBITDA $ (27,593 ) $ 128 Adjustments to EBITDA Plus: Stock Based Compensation 1,312 185 Plus: ERP Implementation - 32 Plus: Loss on Disposal of Assets (6 ) - Plus: Separation Agreement 1,197 185 Plus: Debt-Extinguishment 4,824 - Plus: Change in fair market value of warrant liability (5,446 ) - Plus: Business Combination Expenses 21,337 295 Adjusted EBITDA $ (4,375 ) $ 825 Source: Dragonfly Energy Holdings Corp.
