Overview

Dragonfly Energy Holdings Corp. (the “Company”) is 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. The Company has proprietary, patented and disruptive battery cell manufacturing and non-flammable solid-state cell technology currently under development.

Key Highlights:

• The Company has sold over 340,000 batteries since 2020. For the quarters ended March 31, 2025, and March 31, 2024, the Company sold 10,845 and 11,098 batteries, respectively, and had $13.4 million and $12.5 million in net sales, respectively.

• The Company’s increase in sales is a reflection of a slight recovery in the RV market and increased market penetration. However, direct-to-consumer (DTC) sales remained relatively flat.

• The Company is focused on product development to drive near-term revenue and profit, including accelerating the development of purpose-built solutions for the trucking and industrial markets.

• In July 2023, the Company completed the construction of its proprietary and patented cell manufacturing pilot line using a dry deposition process that is chemistry agnostic and less capital intensive.

• In July 2024, the Company entered into a License Agreement with Stryten, granting Stryten an exclusive, worldwide license to use certain trademarks relating to the Company’s lithium-ion battery brand, Battle Born Batteries®, for business-to-business sales in certain markets.

• The Company has faced challenges in meeting the financial covenants under its Term Loan Agreement and has obtained waivers from the lenders. The Company has also taken various actions, including entering into amendments to the Term Loan Agreement, to address its liquidity needs.

• As of March 31, 2025, the Company had cash totaling $2.8 million. The Company expects that it will need to raise additional funds, including through the use of its ChEF Equity Facility and the issuance of equity, equity-related or debt securities, to fund its ongoing operations and strategic plans.

Financial Performance:

The Company’s net sales increased by 6.8% in Q1 2025 compared to Q1 2024, primarily due to higher OEM battery and accessory sales, as well as licensing revenue. Gross profit increased by 28.7% due to the increase in sales and lower material costs. However, the Company continued to incur net losses, though the loss was reduced compared to the prior year quarter.

Outlook and Challenges:

The Company faces several key challenges, including:

• Maintaining and growing demand from end market consumers, particularly in the RV market
• Securing a reliable supply of components, especially from its China-based suppliers
• Managing product and customer mix to maintain profitability
• Expanding into new markets, such as trucking and industrials, while continuing to develop its solid-state battery technology

The Company’s ability to address these challenges and execute on its strategic initiatives will be critical to its future financial performance and long-term success.