Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 10, 2023 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40730 | |
Entity Registrant Name | DRAGONFLY ENERGY HOLDINGS CORP. | |
Entity Central Index Key | 0001847986 | |
Entity Tax Identification Number | 85-1873463 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1190 Trademark Drive | |
Entity Address, Address Line Two | #108 | |
Entity Address, City or Town | Reno | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89521 | |
City Area Code | (775) | |
Local Phone Number | 622-3448 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,550,812 | |
Common Stock, par value $0.0001 per share | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | DFLI | |
Security Exchange Name | NASDAQ | |
Redeemable Warrants, exercisable for common stock at an exercise price of $11.50 per share, subject to adjustment | ||
Title of 12(b) Security | Redeemable Warrants, exercisable for common stock at an exercise price of $11.50 per share, subject to adjustment | |
Trading Symbol | DFLIW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash | $ 13,235 | $ 17,781 |
Accounts receivable, net of allowance for credit losses | 4,336 | 1,444 |
Inventory | 41,907 | 49,846 |
Prepaid expenses | 823 | 1,624 |
Prepaid inventory | 2,074 | 2,002 |
Prepaid income tax | 529 | 525 |
Other current assets | 118 | 267 |
Total Current Assets | 63,022 | 73,489 |
Property and Equipment | ||
Machinery and equipment | 16,337 | 10,214 |
Office furniture and equipment | 275 | 275 |
Leasehold improvements | 1,727 | 1,709 |
Vehicle | 33 | 195 |
Total | 18,372 | 12,393 |
Less accumulated depreciation and amortization | (2,496) | (1,633) |
Property and Equipment, Net | 15,876 | 10,760 |
Operating lease right of use asset | 3,615 | 4,513 |
Total Assets | 82,513 | 88,762 |
Current Liabilities | ||
Accounts payable | 9,889 | 13,475 |
Accrued payroll and other liabilities | 10,788 | 6,247 |
Customer deposits | 217 | 238 |
Uncertain tax position liability | 128 | 128 |
Notes payable, current portion, net of deferred financing fees | 18,700 | 19,242 |
Operating lease liability, current portion | 1,264 | 1,188 |
Financing lease liability, current portion | 36 | 10 |
Total Current Liabilities | 41,022 | 40,528 |
Long-Term Liabilities | ||
Warrant liabilities | 14,165 | 32,831 |
Accrued expenses-long term | 351 | 492 |
Operating lease liability, net of current portion | 2,565 | 3,541 |
Financing lease liability, net of current portion | 75 | 38 |
Total Long-Term Liabilities | 17,156 | 36,902 |
Total Liabilities | 58,178 | 77,430 |
Commitments and Contingencies (See Note 5) | ||
Equity | ||
Common stock, 170,000,000 shares at $0.0001 par value, authorized, 58,880,712 and 43,272,728 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 6 | 4 |
Preferred stock, 5,000,000 shares at $0.0001 par value, authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | ||
Additional paid in capital | 68,293 | 38,461 |
Retained deficit | (43,964) | (27,133) |
Total Equity | 24,335 | 11,332 |
Total Liabilities and Shareholders’ Equity | $ 82,513 | $ 88,762 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 170,000,000 | 170,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 58,880,712 | 43,272,728 |
Common stock, shares outstanding | 58,880,712 | 43,272,728 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Interim Consolidated
Condensed Interim Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net Sales | $ 15,889 | $ 26,117 | $ 53,954 | $ 66,042 |
Cost of Goods Sold | 11,317 | 19,079 | 40,541 | 46,481 |
Gross Profit | 4,572 | 7,038 | 13,413 | 19,561 |
Operating Expenses | ||||
Research and development | 1,385 | 753 | 3,332 | 1,951 |
General and administrative | 6,005 | 6,336 | 23,114 | 13,778 |
Selling and marketing | 3,083 | 3,358 | 11,075 | 9,331 |
Total Operating Expenses | 10,473 | 10,447 | 37,521 | 25,060 |
Loss From Operations | (5,901) | (3,409) | (24,108) | (5,499) |
Other (Expense) Income | ||||
Interest expense | (3,977) | (1,166) | (11,905) | (3,657) |
Change in fair market value of warrant liability | (145) | 19,182 | ||
Total Other (Expense) Income | (4,122) | (1,166) | 7,277 | (3,657) |
Loss Before Taxes | (10,023) | (4,575) | (16,831) | (9,156) |
Income Tax (Benefit) Expense | (886) | (1,700) | ||
Net Loss | $ (10,023) | $ (3,689) | $ (16,831) | $ (7,456) |
Loss Per Share- Basic | $ (0.17) | $ (0.10) | $ (0.34) | $ (0.20) |
Loss Per Share- Diluted | $ (0.17) | $ (0.10) | $ (0.34) | $ (0.20) |
Weighted Average Number of Shares- Basic | 58,736,013 | 38,129,422 | 50,166,320 | 37,098,990 |
Weighted Average Number of Shares- Diluted | 58,736,013 | 38,129,422 | 50,166,320 | 37,098,990 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Redeemable Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | |
Balance at Dec. 31, 2021 | $ 2,000 | $ 4 | $ 1,619 | $ 12,438 | $ 14,061 | |
Balance, shares at Dec. 31, 2021 | 10,000,000 | 20,875,475 | ||||
Retroactive application of recapitalization | $ (2,000) | 2,000 | 2,000 | |||
Retroactive application of recapitalization, shares | (10,000,000) | 15,621,523 | ||||
Adjusted balance, beginning of period | $ 4 | 3,619 | 12,438 | 16,061 | ||
Adjusted balance, beginning of period, shares | 36,496,998 | |||||
Net income (loss) | (2,298) | (2,298) | ||||
Stock compensation expense | 288 | 288 | ||||
Exercise of stock options | 113 | 113 | ||||
Exercise of stock options, shares | 100,374 | |||||
Balance at Mar. 31, 2022 | $ 4 | 4,020 | 10,140 | 14,164 | ||
Balance, shares at Mar. 31, 2022 | 36,597,372 | |||||
Balance at Dec. 31, 2021 | $ 2,000 | $ 4 | 1,619 | 12,438 | 14,061 | |
Balance, shares at Dec. 31, 2021 | 10,000,000 | 20,875,475 | ||||
Net income (loss) | $ (7,456) | |||||
Exercise of stock options, shares | [1] | 580,760 | ||||
Balance at Sep. 30, 2022 | $ 5 | 20,480 | 4,982 | $ 25,467 | ||
Balance, shares at Sep. 30, 2022 | 38,576,650 | |||||
Balance at Mar. 31, 2022 | $ 4 | 4,020 | 10,140 | 14,164 | ||
Balance, shares at Mar. 31, 2022 | 36,597,372 | |||||
Net income (loss) | (1,469) | (1,469) | ||||
Stock compensation expense | 431 | 431 | ||||
Exercise of stock options | 89 | 89 | ||||
Exercise of stock options, shares | 152,366 | |||||
Balance at Jun. 30, 2022 | $ 4 | 4,540 | 8,671 | 13,215 | ||
Balance, shares at Jun. 30, 2022 | 36,749,738 | |||||
Net income (loss) | (3,689) | (3,689) | ||||
Stock compensation expense | 436 | 436 | ||||
Exercise of stock options | 505 | 505 | ||||
Exercise of stock options, shares | 328,611 | |||||
Stock purchase agreement | $ 1 | 14,999 | 15,000 | |||
Stock purchase agreement, shares | 1,498,301 | |||||
Balance at Sep. 30, 2022 | $ 5 | 20,480 | 4,982 | 25,467 | ||
Balance, shares at Sep. 30, 2022 | 38,576,650 | |||||
Balance at Dec. 31, 2022 | $ 4 | 38,461 | (27,133) | 11,332 | ||
Balance, shares at Dec. 31, 2022 | 43,272,728 | |||||
Net income (loss) | 4,892 | 4,892 | ||||
Stock compensation expense | 4,487 | 4,487 | ||||
Exercise of stock options | 93 | 93 | ||||
Exercise of stock options, shares | 36,009 | |||||
Common stock issued in public offering (ATM), net of costs | 597 | 597 | ||||
Common stock issued in public offering (ATM), net of costs, shares | 73,500,000 | |||||
Exercise of Public Warrants | 747 | 747 | ||||
Exercise of public warrants, shares | 64,971,000 | |||||
Cashless exercise of liability classified warrants | $ 1 | 10,166 | 10,167 | |||
Cashless exercise of liability classified warrants, shares | 2,348,294 | |||||
Balance at Mar. 31, 2023 | $ 5 | 54,551 | (22,241) | 32,315 | ||
Balance, shares at Mar. 31, 2023 | 45,795,502 | |||||
Balance at Dec. 31, 2022 | $ 4 | 38,461 | (27,133) | 11,332 | ||
Balance, shares at Dec. 31, 2022 | 43,272,728 | |||||
Net income (loss) | $ (16,831) | |||||
Exercise of stock options, shares | [1] | 208,192 | ||||
Common stock issued in public offering (ATM), net of costs, shares | 10,000,000 | |||||
Exercise of Public Warrants | $ 747 | |||||
Exercise of public warrants, shares | 64,971 | |||||
Balance at Sep. 30, 2023 | $ 6 | 68,293 | (43,964) | $ 24,335 | ||
Balance, shares at Sep. 30, 2023 | 58,880,712 | |||||
Balance at Mar. 31, 2023 | $ 5 | 54,551 | (22,241) | 32,315 | ||
Balance, shares at Mar. 31, 2023 | 45,795,502 | |||||
Net income (loss) | (11,700) | (11,700) | ||||
Stock compensation expense | 954 | 954 | ||||
Exercise of stock options | 230 | 230 | ||||
Exercise of stock options, shares | 69,012 | |||||
Cashless exercise of liability classified warrants | 2,462 | 2,462 | ||||
Cashless exercise of liability classified warrants, shares | 748,029 | |||||
Common stock issued in public offering, net of costs | $ 1 | 7,877 | 7,878 | |||
Common stock issued in public offering, net of costs, shares | 11,405,000,000 | |||||
Common stock issued in public offering (ATM), net of costs | 74 | 74 | ||||
Common stock issued in public offering (ATM), net of costs, shares | 25,000,000 | |||||
Shares issued for vested restricted stock units | ||||||
Shares issued for vested restricted stock units, shares | 461,998 | |||||
Balance at Jun. 30, 2023 | $ 6 | 66,148 | (33,941) | 32,213 | ||
Balance, shares at Jun. 30, 2023 | 58,504,541 | |||||
Net income (loss) | (10,023) | (10,023) | ||||
Stock compensation expense | 946 | 946 | ||||
Exercise of stock options | 36 | 36 | ||||
Exercise of stock options, shares | 103,071 | |||||
Cash exercise of liability classified warrants | 1,163 | 1,163 | ||||
Cash exercise of liability classified warrants, shares | 273,100 | |||||
Balance at Sep. 30, 2023 | $ 6 | $ 68,293 | $ (43,964) | $ 24,335 | ||
Balance, shares at Sep. 30, 2023 | 58,880,712 | |||||
[1]Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately 1.182 as a result of the merger. See Note 1 for additional information. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from Operating Activities | ||
Net Loss | $ (16,831) | $ (7,456) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities | ||
Stock based compensation | 6,387 | 1,155 |
Amortization of debt discount | 995 | 1,783 |
Change in fair market value of warrant liability | (19,182) | |
Deferred tax liability | (1,707) | |
Non-cash interest expense (Paid-in Kind) | 3,738 | |
Provision for doubtful accounts | 147 | |
Depreciation and amortization | 909 | 648 |
Loss on disposal of property and equipment | 116 | 62 |
Changes in Assets and Liabilities | ||
Accounts receivable | (3,039) | (3,037) |
Inventories | 7,939 | (12,360) |
Prepaid expenses | 801 | (1,259) |
Prepaid inventory | (72) | 3,732 |
Other current assets | 149 | (2,114) |
Other assets | 898 | 831 |
Income taxes payable | (4) | (927) |
Accounts payable and accrued expenses | 343 | (3,915) |
Customer deposits | (21) | (147) |
Total Adjustments | 104 | (17,255) |
Net Cash Used in Operating Activities | (16,727) | (24,711) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (6,507) | (6,065) |
Net Cash Used in Investing Activities | (6,507) | (6,065) |
Cash Flows from Financing Activities | ||
Proceeds from public offering, net | 21,640 | |
Proceeds from public offering (ATM), net | 671 | |
Proceeds from note payable, related party | 1,000 | |
Repayment of note payable, related party | (1,000) | |
Repayment of note payable | (5,275) | |
Proceeds from exercise of Public Warrants | 747 | |
Proceeds from exercise of options | 359 | 707 |
Proceeds from stock purchase agreement | 15,000 | |
Proceeds from exercise of Investor Warrants | 546 | |
Net Cash Provided by Financing Activities | 18,688 | 15,707 |
Net Decrease in Cash | (4,546) | (15,069) |
Beginning cash | 17,781 | 28,630 |
Ending cash | 13,235 | 13,561 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for income taxes | 237 | 981 |
Cash paid for interest | 6,740 | 1,873 |
Supplemental Non-Cash Items | ||
Purchases of property and equipment, not yet paid | 53 | |
Recognition of warrant liability | 13,762 | |
Non-cash impact of cash exercise of liability classified warrants | 617 | |
Cashless exercise of liability classified warrants | $ 12,629 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | Note 1 - NATURE OF BUSINESS Dragonfly Energy Holdings Corp. (“New Dragonfly” or the “Company”) sells lithium-ion battery packs for use in a wide variety of applications. The Company sells to Original Equipment Manufacturers (“OEMs”) 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. On October 7, 2022, a merger transaction between Chardan NexTech Acquisition 2 Corporation (“CNTQ”), Dragonfly Energy Corp. (“Legacy Dragonfly”), and Bronco Merger Sub, Inc. (“Merger Sub”) was completed pursuant to which Merger Sub was merged with and into Legacy Dragonfly, with Legacy Dragonfly surviving the merger. As a result of the merger, Legacy Dragonfly became a wholly owned subsidiary of New Dragonfly. Although New Dragonfly was the legal acquirer of Legacy Dragonfly in the merger, Legacy Dragonfly was deemed to be the accounting acquirer, and the historical financial statements of Legacy Dragonfly became the basis for the historical financial statements of New Dragonfly upon the closing of the merger. New Dragonfly together with its wholly owned subsidiary, Dragonfly Energy Corp., is referred to hereinafter as the “Company.” Furthermore, the historical financial statements of Legacy Dragonfly became the historical financial statements of the Company upon the consummation of the merger. As a result, the financial statements included in this Quarterly Report reflect: (i) the historical operating results of Legacy Dragonfly prior to the merger; (ii) the combined results of CNTQ and Legacy Dragonfly following the close of the merger; (iii) the assets and liabilities of Legacy Dragonfly at their historical cost and (iv) the Legacy Dragonfly’s equity structure for all periods presented, as affected by the recapitalization presentation after completion of the merger. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying 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 subsidiary. 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 10-K filed with the SEC on April 17, 2023 (as amended May 1, 2023, the “Annual Report”) of the Company for the annual period ended December 31, 2022. The consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements as of and for the year then ended. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) 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, 2023, and 2022, the Company incurred losses from operations and had negative cash flow from operations. As of September 30, 2023, the Company had $ 13,235 22,000 In connection with the Company’s senior secured term loan facility in an aggregate principal amount of $ 75,000 In addition, the Company may need to raise additional debt and/or equity financings to fund our operations, strategic plans, and meet its financial covenants. The Company has historically been able to raise additional capital through issuance of equity and/or debt financings and the Company intends to use its equity facility and 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. Recently adopted accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements or financial statement disclosures. Recently issued accounting pronouncements There were no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 2 – Summary of Significant Accounting Policies (continued) Accounts Receivable The Company’s trade receivables are recorded when billed and represent claims against third parties that will be settled in cash. Generally, payment is due from customers within 30 – 90 days 178 90 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. We continually analyze our slow moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we establish 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. As of September 30, 2023 and December 31, 2022, no such reserves were necessary. Property and Equipment Property and equipment are stated at cost, including the cost of significant improvements and renovations. Costs of routine repairs and maintenance are charged to expense as incurred. Depreciation and amortization are calculated by the straight line method over the estimated useful lives for owned property, or, for leasehold improvements, over the shorter of the asset’s useful life or term of the lease. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $ 909 648 316 259 SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES Office furniture and equipment 3 7 Vehicles 5 Machinery and equipment 3 7 Leasehold improvements Remaining Term of Lease 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. Warrants The Company applies relevant accounting guidance for warrants to purchase the Company’s common stock, par value $ 0.0001 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 2 – Summary of Significant Accounting Policies (continued) 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, our 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. 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 OEMs are typically due within 30 90 217 238 230 434 Disaggregation of Revenue The following table presents our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL For The Three Months Ended September 30, For The Nine Months Ended September 30, Sales 2023 2022 2023 2022 Direct to Customer 10,305 12,249 $ 30,314 $ 41,755 Original equipment manufacture 5,584 13,868 23,640 24,287 Total $ 15,889 $ 26,117 $ 53,954 $ 66,042 During the quarter ended September 30, 2023, The Company deemed it more appropriate to classify Retail and Distributor revenues as a single line item referred to as direct-to-consumer revenue. The Company has combined previously reported retail and distributor amounts to direct-to-consumer revenue to conform with current year presentation. The consolidation into direct-to-consumer revenue is motivated by The Company’s strategic perspective on its operations and better represents how it evaluates their sales channels. Shipping and Handling Shipping and handling fees paid by customers are recorded within net sales, with the related expenses recorded in cost of sales. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses. Shipping and handling costs associated with outbound freight totaled $ 2,872 4,042 913 1,508 Product Warranty The Company offers assurance type warranties from 5 10 301 328 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 2 – Summary of Significant Accounting Policies (continued) Concentrations Receivables from two 38 15 18 10 10 Sales from one 19 One 20 one 11 One 34 Payables to one 68 one 61 For the nine months ended September 30, 2023, one 16 one 24 three 14 11 10 three 20 10 10 Advertising The Company expenses advertising costs as they are incurred and are included in selling and marketing expenses. Advertising expenses amounted to $ 2,020 1,777 750 515 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 option s 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. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 2 – Summary of Significant Accounting Policies (continued) Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has a liability of $ 128 Segment Reporting Operating segments are identified 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. To date, the Company has viewed its operations and manages its business as one |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | Note 3 - FAIR VALUE MEASUREMENTS ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability, either directly or indirectly. ● Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 3 - Fair Value Measurements (Continued) The following table presents assets and liabilities that were measured at fair value in the Condensed Consolidated Balance Sheets on a recurring basis as of September 30, 2023: SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES Carrying Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2023 Liabilities Warrant liability - Term Loan $ 911 $ 911 $ — $ — $ 911 Warrant liability - June public offering 13,149 13,149 — — 13,149 Warrant liability - Private placement warrants 105 105 — 105 — Total liabilities $ 14,165 $ 14,165 $ — $ 105 $ 14,060 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, 2022: Carrying Fair Value (Level 1) (Level 2) (Level 3) As of December 31, 2022 Liabilities Warrant liability- Term Loan $ 30,841 $ 30,841 $ — $ — $ 30,841 Warrant liability- Private placement warrants 1,990 1,990 — 1,990 — Total liabilities $ 32,831 $ 32,831 $ — $ 1,990 $ 30,841 The carrying amounts of accounts receivable and accounts payable are considered Level 1 and approximate fair value as of September 30, 2023 and December 31, 2022 because of the relatively short maturity of these instruments. The carrying value of the Term Loan as of September 30, 2023 and December 31, 2022 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. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | Note 4 - INVENTORY Inventory consists of the following: SCHEDULE OF INVENTORY September 30, 2023 December 31, 2022 Raw material $ 36,850 $ 42,586 Finished goods 5,057 7,260 Total inventory $ 41,907 $ 49,846 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 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, and engineering office, all located in Reno, Nevada. The leases require annual escalating monthly payments ranging from $ 111 128 230 23 21 3 2.4 The following table presents the breakout of the operating leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES September 30, 2023 December 31, 2022 Operating lease right-of-use assets $ 3,615 $ 4,513 Short-term operating lease liabilities 1,264 1,188 Long-term operating lease liabilities 2,565 3,541 Total operating lease liabilities $ 3,829 $ 4,729 Weighted average remaining lease term 2.9 3.6 Weighted average discount rate 5.2 % 5.2 % Assumptions used in determining our incremental borrowing rate include our implied credit rating and an estimate of secured borrowing rates based on comparable market data. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 5 - Commitments and Contingencies (Continued) Operating Leases (Continued) At September 30, 2023, the future minimum lease payments under these operating leases are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES Fiscal Years Ending Amount December 31, 2023 (1) $ 353 December 31, 2024 1,435 December 31, 2025 1,435 December 31, 2026 893 Total lease payments 4,116 Less imputed interest 287 Total operating lease liabilities $ 3,829 (1) Represents scheduled payments for the remaining three-month period ending December 31, 2023. SCHEDULE OF LEASE COST For The Three Months Ended September 30, For The Nine Months Ended September 30, Lease cost Classification 2023 2022 2023 2022 Operating lease cost Cost of goods sold $ 345 $ 349 $ 1,040 $ 876 Operating lease cost Research and development 22 23 67 82 Operating lease cost General and administration 11 14 35 44 Operating lease cost Selling and marketing 11 14 35 44 Total lease cost $ 389 $ 400 $ 1,177 $ 1,046 Finance Leases During the nine months ended September 30, 2023, the Company entered into a finance lease agreement for equipment to support the Company’s operations. Payments under the finance lease agreement are fixed for a term of 3 years. The leased assets are recognized in property plant & equipment. During the nine months ended September 30, 2022, the Company entered into a finance lease agreement for equipment to support the Company’s operations. Payments under the finance lease agreement are fixed for a term of 5 The following table presents the breakout of the finance leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE FINANCE LEASES September 30, 2023 December 31, 2022 Finance lease right-of-use assets $ 112 $ 45 Short-term finance lease liabilities 36 10 Long-term finance lease liabilities 75 38 Total finance lease liabilities $ 111 $ 48 Weighted average remaining lease term 3.0 4.2 Weighted average discount rate 5.2 % 5.2 % Assumptions used in determining our incremental borrowing rate include our implied credit rating and an estimate of secured borrowing rates based on comparable market data. At September 30, 2023, the future minimum lease payments under the finance lease are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE FINANCE LEASES Fiscal Years Ending Amount December 31, 2023 (1) $ 10 December 31, 2024 41 December 31, 2025 41 December 31, 2026 24 December 31, 2027 4 Total lease payments 120 Less imputed interest (9 ) Total finance lease liabilities $ 111 (1) Represents scheduled payments for the remaining three-month period ending December 31, 2023. Earnout The former holders of shares of Legacy Dragonfly common stock (including shares received as a result of the conversion of Legacy Dragonfly Preferred Stock into New Dragonfly common stock) are entitled to receive their pro rata share of up to 40,000,000 15,000,000 250,000 35,000 12,500,000 22.50 12,500,000 32.50 32.50 Other Contingencies See Note 7 for further discussion regarding contingent consideration arising from the April 2022 asset purchase agreement with Thomason Jones Company, LLC. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | Note 6 - DEBT Financing Trust Indenture On November 24, 2021, the Company entered into agreements to issue $ 45,000 45,000 In connection with the merger on October 7, 2022 (the “Closing Date”), the Company entered into a Term Loan, Guarantee and Security Agreement (see “ Term Loan Agreement 4,824 619 586 1,873 1,783 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 6 - Debt (continued) Term Loan Agreement On October 7, 2022, in connection with the merger, CNTQ, Legacy Dragonfly and CCM Investments 5 LLC, an affiliate of CCM LLC (“CCM 5”, and in connection with the Term Loan, the “Chardan Lender”), and EICF Agent LLC (“EIP” and, collectively with the Chardan Lender, the “Initial Term Loan Lenders”) entered into the Term Loan Agreement setting forth the terms of the Term Loan. The Chardan Lender backstopped its commitment under the Debt Commitment Letter by entering into a backstop commitment letter, dated as of May 20, 2022 (the “Backstop Commitment Letter”), with a certain third party financing source (the “Backstop Lender” and collectively with EIP, the “Term Loan Lenders”), pursuant to which the Backstop Lender committed to purchase from the Chardan Lender the aggregate amount of the Term Loan held by the Chardan Lender (the “Backstopped Loans”) immediately following the issuance of the Term Loan on the Closing Date. Pursuant to an assignment agreement, the Backstopped Loans were assigned by CCM 5 to the Backstop Lender on the Closing Date. Pursuant to the terms of the Term Loan Agreement, the Term Loan was advanced in one tranche on the Closing Date. The proceeds of the Term Loan were used (i) to refinance on the Closing Date prior indebtedness (including the obligations underlying the Trust Indenture), (ii) to support the Transaction under the merger Agreement, (iii) for working capital purposes and other corporate purposes, and (iv) to pay any fees associated with transactions contemplated under the Term Loan Agreement and the other loan documents entered into in connection therewith, including the transactions described in the foregoing clauses (i) and (ii) and fees and expenses related to the merger. The Term Loan amortizes in the amount of 5 937.5 24 13.5 7 6.5 7 4.5 6.5 11.5 13.5 1 In addition to optional prepayments by the Company upon written notice, the Term Loan Agreement provides for mandatory prepayments upon receipt of proceeds from certain transactions or casualty events. Beginning on the date the financial statements for the year ending December 31, 2023 are required to be delivered to the Term Loan Lenders, the Company will be required to prepay the Term Loan based on excess cash flow, as defined in the Term Loan Agreement. Pursuant to the Term Loan Agreement, the Company partially prepaid the Term Loan in the amount of $ 5,275 Unless the obligations under the Term Loan are accelerated under the terms of the agreement, the maturity date will be October 7, 2026. The Term Loan Lenders have been granted a first priority lien, and security interest in, the mortgaged properties underlying the Company’s mortgages. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 6 - Debt (continued) Term Loan Agreement (Continued) During the three and nine months ended September 30, 2023, a total of $ 3,589 10,736 375 995 The carrying balance of $ 18,700 69,725 4,930 55,955 Financial Covenants Maximum Senior Leverage Ratio The Senior Leverage Ratio is the ratio of (a) consolidated indebtedness, as defined, on such date minus 100% of the unrestricted cash and cash equivalents held (subject to adjustment) to (b) Consolidated earnings before interest, tax and amortization (“EBITDA”) for the trailing twelve (12) fiscal month period most recently ended. Starting with the fiscal quarter ending December 31, 2023, (or through fiscal quarter ended September 30, 2023, only if liquidity, as defined, is less than $17,500), the Senior Leverage Ratio shall not be permitted SCHEDULE OF LEVERAGE RATIO Test Period Ending Leverage Ratio June 30, 2023 - September 30, 2023 6.00 to 1.00 December 31, 2023 - March 31, 2024 5.00 to 1.00 June 30, 2024 - September 30, 2024 4.00 to 1.00 December 31, 2024 - March 31, 2025 3.25 to 1.00 June 30, 2025 and thereafter 3.00 to 1.00 Liquidity The Company shall not permit their Liquidity (determined on a consolidated basis) to be less than $10,000 as of the last day of each fiscal month (commencing with month ending December 31, 2022). Fixed Charge Coverage Ratio The Fixed Charge Coverage Ratio is the ratio of consolidated EBITDA (less capital expenditures and certain other adjustments) to consolidated fixed charges, as defined in the agreement. If Liquidity is less than $15,000 as of the last day of any fiscal quarter (commencing with the quarter ended December 31, 2022), then the Company shall not permit the Fixed Charge Coverage Ratio for the trailing four quarterly periods ending on the last day of any such quarter to be less than 1.15 to 1.00. Capital Expenditures If consolidated EBITDA for the trailing twelve-month period ending on the most recently completed fiscal quarter is less than $15,000, then the level of capital expenditures is limited. The Company was in compliance with its covenants as of June 30, 2023 and December 31, 2022. On March 29, 2023 and September 29, 2023, the Company obtained waivers from the Administrative Agent and the Term Loan Lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarters ended March 31, 2023 and September 30, 2023, respectively. As a result of the uncertainty of maintaining compliance with financial covenants the Company has continued to classify the entire Term Loan balance within current liabilities on the balance sheet. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 6 – Debt (continued) Future Debt Maturities At September 30, 2023, the future debt maturities are as follows: SCHEDULE OF FUTURE DEBT MATURITIES For Year Ending December 31, 2023 (1) $ — 2024 938 2025 3,750 2026 74,931 Total 79,619 Less: Estimated interest paid-in-kind (4,964 ) Total debt 74,655 Less: Unamortized debt issuance costs, noncurrent (55,955 ) Total carrying amount 18,700 Less: Current portion of debt (18,700 ) Total long-term debt $ — (1) Represents scheduled payments for the remaining three-month period ending December 31, 2023. |
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ASSET PURCHASE AGREEMENT | Note 7 – ASSET PURCHASE AGREEMENT Bourns Production, Inc On January 1, 2022, the Company entered into an asset purchase agreement (the “APA”) with Bourns Productions, Inc., a Nevada corporation (“Bourns Productions”) pursuant to which the Company acquired machinery, equipment and a lease for a podcast studio from Bourns Productions as set forth in the APA for a purchase price of $ 197 Thomason Jones Company, LLC In April 2022, the Company entered into an asset purchase agreement (the “April 2022 Asset Purchase Agreement”) with William Thomason, Richard Jones, and Thomason Jones Company, LLC (“Thomason Jones”) whereby the Company acquired inventory and intellectual property assets for up to $ 700 1,000 444 Contingent Compensation Pursuant to the April 2022 Asset Purchase Agreement, if, within twenty-four months of the April 2022 Asset Purchase Agreement the Company realizes $ 3,000 1,000 417 2,000 782 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) |
RELATED PARTY
RELATED PARTY | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY | Note 8 – RELATED PARTY The Company loaned its former Chief Financial Officer $ 469 On October 25, 2022, the Company entered into a separation and release of claims agreement with its former Chief Operating Officer (“COO”). As consideration for the COO’s execution of the agreement, the Company agreed to pay the employee a lump sum payment of $ 100, 1,000 In February 2023, the Company entered into an agreement with its COO in which the COO waived their rights to a transaction bonus resulting from the merger transaction (Note 1) in lieu of a Company van. The Company accounted for the cost of the van as an employee bonus, resulting in $ 116 On March 5, 2023, the Company entered into a convertible promissory note (the “Note”) with a board member in the amount of $ 1,000 100 On April 26, 2023, the Company entered into a separation and release of claims agreement with its former Chief Legal Officer (the “CLO”). As consideration for the CLO’s execution of the agreement, the Company agreed to pay the employee payments equivalent to $ 720 76 |
WARRANTS
WARRANTS | 9 Months Ended |
Sep. 30, 2023 | |
Warrants | |
WARRANTS | Note 9 - WARRANTS Common Stock Warrants classified as Equity Public Warrants On October 7, 2022, in connection with the merger, the Company assumed the outstanding public warrants of CNTQ. There were no Public Warrants outstanding prior to the merger. Each Public Warrant entitles the holder to the right to purchase one share of Common Stock at an exercise price of $ 11.50 0.01 16.00 9,487,500 The measurements of the Public Warrants after the detachment of the Public Warrants from the Units are classified as Level 1 due to the use of an observable market quote in an active market under the ticker DFLIW. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value of the Public Warrants as of each relevant date. During the nine months ended September 30, 2023, the Company received proceeds from Public Warrant exercises of $ 747 64,971 June 2023 Offering In connection with the entry into the underwriting agreement as further described in Note 10 of the financial statements, (the “June 2023 Offering”) the Company issued (i) underwriters warrants to purchase up to an aggregate of 570,250 2.50 125 10,000,000 2.00 1,500,000 1,500,000 1,405,000 1,405,000 Underwriters’ Warrants: SCHEDULE OF UNDERWRITER WARRANTS Common Stock Underwriters’ Warrants Outstanding, January 1, 2023 — Underwriters’ Warrants issued 570,250 Underwriters’ Warrants Outstanding, September 30, 2023 570,250 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 9 - Warrants (continued) Common Stock Warrants classified as Liability Private Placement Warrants On October 7, 2022, in connection with the merger, the Company assumed the outstanding private placement warrants of CNTQ. There were no Private Placement Warrants outstanding prior to the merger. The Private Placement Warrants (the “Private Warrants”) may not be redeemed by the Company so long as the Private Placement Warrants are held by the initial purchasers, or such purchasers’ permitted transferees. The Private Warrants: (i) will be exercisable either for cash or on a cashless basis at the holders’ option and (ii) will not be redeemable by the Company, in either case as long as the Private Warrants are held by the initial purchasers or any of their permitted transferees (as prescribed in the Subscription Agreement). The Private Warrants may not be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of, the Private Warrants (or any securities underlying the Private Warrants) for a period of one hundred eighty (180) days following the effective date of the Registration Statement to anyone other than any member participating in the Public Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. During the nine months ended September 30, 2023, private placement warrant holders exercised 3,126,472 1,100,000 1,501,386 4,627,858 The Private Placement Warrants are classified as Level 2 as the transfer of private placement warrants to anyone who is not a permitted transferee would result in the Private Placement Warrants having substantially similar terms as the Public Warrants (with the exception of a different remaining life). We determined, through use of a Binomial Lattice model, that the fair value of each Private Placement Warrant less a discount for the difference in remaining life is equivalent to that of each Public Warrant. Term Loan Warrants In connection with the entry into the Term Loan Agreement on October 7, 2022, and as a required term and condition thereof, the Company issued (i) the penny warrants to the Term Loan Lenders exercisable to purchase an aggregate of 2,593,056 1,600,000 10 457,142 2,000,000 1,996,323 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 9 - 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 FAIR VALUE WARRANTS As of September 30, 2023 As of Common stock price $ 1.54 $ 11.09 Exercise price 0.01 0.01 Dividend yield 0 % 0 % Term (in years) 9.02 9.77 Volatility 113.00 % 90.00 % Risk-free rate 4.60 % 3.90 % Fair value $ 1.54 $ 11.89 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 Common stock price $ 1.54 Exercise price $ 2.00 Dividend yield 0 % Term (in years) 4.73 Volatility 111.00 % Risk-free rate 4.6 % Fair value $ 1.18 The following table presents a roll-forward of the Company’s warrants from January 1, 2023 to September 30, 2023: SCHEDULE OF ROLL FORWARD IN WARRANTS Private Warrants: Common Warrants Outstanding, January 1, 2023 4,627,858 Warrants Outstanding, January 1, 2023 Warrants issued Exercise of warrants (3,126,472 ) Warrants Outstanding, September 30, 2023 Warrants Outstanding, September 30, 2023 1,501,386 Public Warrants: Common Warrants Outstanding, January 1, 2023 9,487,500 Exercise of warrants (64,971 ) Warrants Outstanding, September 30, 2023 9,422,529 Term Loan Warrants: Common Warrants Outstanding, January 1, 2023 2,593,056 Exercise of warrants (2,000,000 ) Warrants issued 501 Warrants Outstanding, September 30, 2023 593,557 Investor Warrants: Common Warrants Outstanding, January 1, 2023 — Warrants issued 11,405,000 Exercise of warrants (273,100 ) Warrants Outstanding, September 30, 2023 11,131,900 The following table presents a roll forward of the aggregate fair values of the Company’s warrant liabilities for which fair value is determined by Level 3 Inputs. The only class of warrants that were determined to be Level 3 are the term loan warrants. Warrant Balances, January 1, 2023 $ 30,841 Issuance of warrants 13,762 Exercise of warrants (11,901 ) Change in fair value of warrants (18,642 ) Balances, September 30, 2023 $ 14,060 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
COMMON STOCK | Note 10 - COMMON STOCK The Company is authorized to issue up to 170,000,000 58,880,712 43,272,728 For the nine months ended September 30, 2023 and 2022, the Company reserved shares of Common Stock for issuance as follows: SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE September 30, 2023 September 30, 2022 Options issued and outstanding 3,274,940 3,665,099 Common stock outstanding 58,880,712 38,576,658 Warrants outstanding 23,219,622 — Earnout shares 40,000,000 — Shares available for future issuance 4,470,153 639,395 Total 129,845,427 42,881,152 ChEF Equity Facility The Company and Chardan Capital Markets LLC, a New York limited liability company (“CCM LLC”) entered into a purchase agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “ChEF RRA”) in connection with the merger. Pursuant to the 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 $ 150 98,500 671 June 2023 Offering In the June 2023 Offering, the Company sold an aggregate of (i) 10,000,000 10,000,000 2.00 The Investor Warrants are exercisable for five years from the closing date of the June 2023 Offering, have an exercise price of $ 2.00 2.50 June 20, 2028 The Company granted the underwriters a 45-day over-allotment option to purchase up to an additional 1,500,000 1,500,000 1,405,000 1,405,000 The Company received gross proceeds of $ 22,810 2,074 1,169 904 13,762 Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | Note 11 - STOCK-BASED COMPENSATION Share-based compensation expense for options and restricted stock units (“RSUs”) totaling $ 6,387 1,155 946 436 Share-based compensation for the nine months ended September 30, 2023 and 2022 was allocated as follows: SCHEDULE OF STOCK BASED COMPENSATION September 30, 2023 2022 Cost of goods sold $ 104 $ 189 Research and development 82 307 Selling and marketing 1,033 326 General and administrative expense 5,168 333 Total $ 6,387 $ 1,155 Share-based compensation for the three months ended September 30, 2023 and 2022 was allocated as follows: September 30, 2023 2022 Cost of goods sold $ 29 $ 46 Research and development 33 136 Selling and marketing 62 134 General and administrative expense 822 120 Total $ 946 $ 436 A summary of the Company’s option activity and related information follows: SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION Number of Options (1) Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Life (in years) Aggregate intrinsic value Balances, January 1, 2022 3,690,955 $ 1.98 $ 1.38 8.52 $ 6,550 Options granted 602,275 4.08 1.81 Options forfeited (47,371 ) 3.29 2.07 Options exercised (580,760 ) 1.44 0.89 Balances, September 30, 2022 3,665,099 $ 2.40 $ — 8.22 $ 5,220 Balances, January 1, 2023 3,642,958 $ 2.02 $ 1.21 7.90 $ 35,989 Options granted 143,607 7.50 3.82 — Options forfeited (303,433 ) 3.50 1.89 — Options exercised (208,192 ) 1.72 0.96 — Balances, September 30, 2023 3,274,940 $ 2.14 $ 1.28 6.05 $ 0 At September 30, 2023 Vested and Exercisable 2,235,282 $ 1.68 5.07 $ 1,403 Vested and expected to vest 3,274,940 $ 2.14 6.05 $ 1,466 (1) Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately 1.182 as a result of the merger. See Note 1 for additional information. Restricted Stock Units On October 7, 2022, the Company granted 180,000 2,520 461,998 3,464 37,000 37,000 121 14 9,000 9,000 16 no Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 11 - Stock-Based Compensation (Continued) Restricted Stock Units (Continued) There were no grants of restricted stock units prior to October 7, 2022. The following table presents the restricted stock units activity for the nine months ended September 30, 2023: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY Number of Shares Weighted-Average Fair Market Value Unvested shares at January 1, 2023 180,000 $ 14.00 Granted and unvested 498,998 7.19 Vested (461,998 ) 7.50 Unvested shares, September 30, 2023 217,000 $ 12.17 Vested and exercisable as of September 30, 2023 — $ — As of September 30, 2023, there were 4,470,153 |
LOSS PER SHARE
LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | Note 12 - LOSS PER SHARE The Company follows the two two two Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding. In addition, in computing the dilutive effect of convertible securities, the numerator is adjusted to add back any convertible preferred dividends. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares that would have been outstanding during the period assuming the issuance of common shares for all potential dilutive common shares outstanding. Potential common shares consist of potential future exercises of outstanding stock options and Common Stock warrants. Because the inclusion of potential common shares would be anti-dilutive for all periods presented, they have been excluded from the calculation. The Company’s Common Stock warrants contractually entitle the holders of such securities to participate in dividends but do not not not The following table sets forth the information needed to compute basic and diluted loss per share for the three and nine months ended September 30, 2023 and 2022: SCHEDULE OF INFORMATION NEEDED TO COMPUTER BASIC AND DILUTED EARNINGS PER SHARE For The Three Months Ended September 30, For The Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net Loss attributable to common stockholders $ (10,023 ) $ (3,689 ) $ (16,831 ) $ (7,456 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 58,736,013 38,129,422 50,166,320 37,098,990 Net loss per share of Common Stock, basic and diluted $ (0.17 ) $ (0.10 ) $ (0.34 ) $ (0.20 ) Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) 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) INCOME PER SHARE September 30, September 30, Warrants 23,219,622 — Restricted stock units 217,000 — Options 3,274,940 3,665,099 Weighted average number of common shares-basic 26,711,562 3,665,099 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13 – INCOME TAXES The Company’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate adjusted for the effect of discrete items arising in that quarter. The Company recorded an income tax expense (benefit) of $ 0 1,700 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS Subsequent to the quarter ended September 30, 2023, we issued and sold approximately 490,000 607,973 4,277 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The accompanying 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 subsidiary. All significant intercompany transactions and balances are eliminated in consolidation. |
Basis of presentation | 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 10-K filed with the SEC on April 17, 2023 (as amended May 1, 2023, the “Annual Report”) of the Company for the annual period ended December 31, 2022. The consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements as of and for the year then ended. |
Going Concern | 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, 2023, and 2022, the Company incurred losses from operations and had negative cash flow from operations. As of September 30, 2023, the Company had $ 13,235 22,000 In connection with the Company’s senior secured term loan facility in an aggregate principal amount of $ 75,000 In addition, the Company may need to raise additional debt and/or equity financings to fund our operations, strategic plans, and meet its financial covenants. The Company has historically been able to raise additional capital through issuance of equity and/or debt financings and the Company intends to use its equity facility and 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. |
Recently adopted accounting standards | Recently adopted accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements or financial statement disclosures. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements There were no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Note 2 – Summary of Significant Accounting Policies (continued) |
Accounts Receivable | Accounts Receivable The Company’s trade receivables are recorded when billed and represent claims against third parties that will be settled in cash. Generally, payment is due from customers within 30 – 90 days 178 90 |
Inventory | 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. We continually analyze our slow moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we establish 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. As of September 30, 2023 and December 31, 2022, no such reserves were necessary. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, including the cost of significant improvements and renovations. Costs of routine repairs and maintenance are charged to expense as incurred. Depreciation and amortization are calculated by the straight line method over the estimated useful lives for owned property, or, for leasehold improvements, over the shorter of the asset’s useful life or term of the lease. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $ 909 648 316 259 SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES Office furniture and equipment 3 7 Vehicles 5 Machinery and equipment 3 7 Leasehold improvements Remaining Term of Lease |
Use of Estimates | 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. |
Warrants | Warrants The Company applies relevant accounting guidance for warrants to purchase the Company’s common stock, par value $ 0.0001 |
Revenue Recognition | 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, our 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. 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 OEMs are typically due within 30 90 217 238 230 434 |
Disaggregation of Revenue | Disaggregation of Revenue The following table presents our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL For The Three Months Ended September 30, For The Nine Months Ended September 30, Sales 2023 2022 2023 2022 Direct to Customer 10,305 12,249 $ 30,314 $ 41,755 Original equipment manufacture 5,584 13,868 23,640 24,287 Total $ 15,889 $ 26,117 $ 53,954 $ 66,042 During the quarter ended September 30, 2023, The Company deemed it more appropriate to classify Retail and Distributor revenues as a single line item referred to as direct-to-consumer revenue. The Company has combined previously reported retail and distributor amounts to direct-to-consumer revenue to conform with current year presentation. The consolidation into direct-to-consumer revenue is motivated by The Company’s strategic perspective on its operations and better represents how it evaluates their sales channels. |
Shipping and Handling | Shipping and Handling Shipping and handling fees paid by customers are recorded within net sales, with the related expenses recorded in cost of sales. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses. Shipping and handling costs associated with outbound freight totaled $ 2,872 4,042 913 1,508 |
Product Warranty | Product Warranty The Company offers assurance type warranties from 5 10 301 328 |
Concentrations | Concentrations Receivables from two 38 15 18 10 10 Sales from one 19 One 20 one 11 One 34 Payables to one 68 one 61 For the nine months ended September 30, 2023, one 16 one 24 three 14 11 10 three 20 10 10 |
Advertising | Advertising The Company expenses advertising costs as they are incurred and are included in selling and marketing expenses. Advertising expenses amounted to $ 2,020 1,777 750 515 |
Stock-Based Compensation | 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 option s 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 | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has a liability of $ 128 |
Segment Reporting | Segment Reporting Operating segments are identified 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. To date, the Company has viewed its operations and manages its business as one |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES | SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES Office furniture and equipment 3 7 Vehicles 5 Machinery and equipment 3 7 Leasehold improvements Remaining Term of Lease |
SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL | The following table presents our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL For The Three Months Ended September 30, For The Nine Months Ended September 30, Sales 2023 2022 2023 2022 Direct to Customer 10,305 12,249 $ 30,314 $ 41,755 Original equipment manufacture 5,584 13,868 23,640 24,287 Total $ 15,889 $ 26,117 $ 53,954 $ 66,042 During the quarter ended September 30, 2023, The Company deemed it more appropriate to classify Retail and Distributor revenues as a single line item referred to as direct-to-consumer revenue. The Company has combined previously reported retail and distributor amounts to direct-to-consumer revenue to conform with current year presentation. The consolidation into direct-to-consumer revenue is motivated by The Company’s strategic perspective on its operations and better represents how it evaluates their sales channels. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES | The following table presents assets and liabilities that were measured at fair value in the Condensed Consolidated Balance Sheets on a recurring basis as of September 30, 2023: SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES Carrying Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2023 Liabilities Warrant liability - Term Loan $ 911 $ 911 $ — $ — $ 911 Warrant liability - June public offering 13,149 13,149 — — 13,149 Warrant liability - Private placement warrants 105 105 — 105 — Total liabilities $ 14,165 $ 14,165 $ — $ 105 $ 14,060 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, 2022: Carrying Fair Value (Level 1) (Level 2) (Level 3) As of December 31, 2022 Liabilities Warrant liability- Term Loan $ 30,841 $ 30,841 $ — $ — $ 30,841 Warrant liability- Private placement warrants 1,990 1,990 — 1,990 — Total liabilities $ 32,831 $ 32,831 $ — $ 1,990 $ 30,841 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Inventory consists of the following: SCHEDULE OF INVENTORY September 30, 2023 December 31, 2022 Raw material $ 36,850 $ 42,586 Finished goods 5,057 7,260 Total inventory $ 41,907 $ 49,846 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES | The following table presents the breakout of the operating leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES September 30, 2023 December 31, 2022 Operating lease right-of-use assets $ 3,615 $ 4,513 Short-term operating lease liabilities 1,264 1,188 Long-term operating lease liabilities 2,565 3,541 Total operating lease liabilities $ 3,829 $ 4,729 Weighted average remaining lease term 2.9 3.6 Weighted average discount rate 5.2 % 5.2 % |
SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES | At September 30, 2023, the future minimum lease payments under these operating leases are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES Fiscal Years Ending Amount December 31, 2023 (1) $ 353 December 31, 2024 1,435 December 31, 2025 1,435 December 31, 2026 893 Total lease payments 4,116 Less imputed interest 287 Total operating lease liabilities $ 3,829 (1) Represents scheduled payments for the remaining three-month period ending December 31, 2023. |
SCHEDULE OF LEASE COST | SCHEDULE OF LEASE COST For The Three Months Ended September 30, For The Nine Months Ended September 30, Lease cost Classification 2023 2022 2023 2022 Operating lease cost Cost of goods sold $ 345 $ 349 $ 1,040 $ 876 Operating lease cost Research and development 22 23 67 82 Operating lease cost General and administration 11 14 35 44 Operating lease cost Selling and marketing 11 14 35 44 Total lease cost $ 389 $ 400 $ 1,177 $ 1,046 |
SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE FINANCE LEASES | The following table presents the breakout of the finance leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE FINANCE LEASES September 30, 2023 December 31, 2022 Finance lease right-of-use assets $ 112 $ 45 Short-term finance lease liabilities 36 10 Long-term finance lease liabilities 75 38 Total finance lease liabilities $ 111 $ 48 Weighted average remaining lease term 3.0 4.2 Weighted average discount rate 5.2 % 5.2 % |
SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE FINANCE LEASES | At September 30, 2023, the future minimum lease payments under the finance lease are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE FINANCE LEASES Fiscal Years Ending Amount December 31, 2023 (1) $ 10 December 31, 2024 41 December 31, 2025 41 December 31, 2026 24 December 31, 2027 4 Total lease payments 120 Less imputed interest (9 ) Total finance lease liabilities $ 111 (1) Represents scheduled payments for the remaining three-month period ending December 31, 2023. |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LEVERAGE RATIO | SCHEDULE OF LEVERAGE RATIO Test Period Ending Leverage Ratio June 30, 2023 - September 30, 2023 6.00 to 1.00 December 31, 2023 - March 31, 2024 5.00 to 1.00 June 30, 2024 - September 30, 2024 4.00 to 1.00 December 31, 2024 - March 31, 2025 3.25 to 1.00 June 30, 2025 and thereafter 3.00 to 1.00 |
SCHEDULE OF FUTURE DEBT MATURITIES | At September 30, 2023, the future debt maturities are as follows: SCHEDULE OF FUTURE DEBT MATURITIES For Year Ending December 31, 2023 (1) $ — 2024 938 2025 3,750 2026 74,931 Total 79,619 Less: Estimated interest paid-in-kind (4,964 ) Total debt 74,655 Less: Unamortized debt issuance costs, noncurrent (55,955 ) Total carrying amount 18,700 Less: Current portion of debt (18,700 ) Total long-term debt $ — (1) Represents scheduled payments for the remaining three-month period ending December 31, 2023. |
WARRANTS (Tables)
WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Warrants | |
SCHEDULE OF UNDERWRITER WARRANTS | Underwriters’ Warrants: SCHEDULE OF UNDERWRITER WARRANTS Common Stock Underwriters’ Warrants Outstanding, January 1, 2023 — Underwriters’ Warrants issued 570,250 Underwriters’ Warrants Outstanding, September 30, 2023 570,250 |
SCHEDULE FAIR VALUE WARRANTS | The following table provides the significant inputs to the Black-Scholes method for the fair value of the Penny Warrants: SCHEDULE FAIR VALUE WARRANTS As of September 30, 2023 As of Common stock price $ 1.54 $ 11.09 Exercise price 0.01 0.01 Dividend yield 0 % 0 % Term (in years) 9.02 9.77 Volatility 113.00 % 90.00 % Risk-free rate 4.60 % 3.90 % Fair value $ 1.54 $ 11.89 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 Common stock price $ 1.54 Exercise price $ 2.00 Dividend yield 0 % Term (in years) 4.73 Volatility 111.00 % Risk-free rate 4.6 % Fair value $ 1.18 |
SCHEDULE OF ROLL FORWARD IN WARRANTS | The following table presents a roll-forward of the Company’s warrants from January 1, 2023 to September 30, 2023: SCHEDULE OF ROLL FORWARD IN WARRANTS Private Warrants: Common Warrants Outstanding, January 1, 2023 4,627,858 Warrants Outstanding, January 1, 2023 Warrants issued Exercise of warrants (3,126,472 ) Warrants Outstanding, September 30, 2023 Warrants Outstanding, September 30, 2023 1,501,386 Public Warrants: Common Warrants Outstanding, January 1, 2023 9,487,500 Exercise of warrants (64,971 ) Warrants Outstanding, September 30, 2023 9,422,529 Term Loan Warrants: Common Warrants Outstanding, January 1, 2023 2,593,056 Exercise of warrants (2,000,000 ) Warrants issued 501 Warrants Outstanding, September 30, 2023 593,557 Investor Warrants: Common Warrants Outstanding, January 1, 2023 — Warrants issued 11,405,000 Exercise of warrants (273,100 ) Warrants Outstanding, September 30, 2023 11,131,900 The following table presents a roll forward of the aggregate fair values of the Company’s warrant liabilities for which fair value is determined by Level 3 Inputs. The only class of warrants that were determined to be Level 3 are the term loan warrants. Warrant Balances, January 1, 2023 $ 30,841 Issuance of warrants 13,762 Exercise of warrants (11,901 ) Change in fair value of warrants (18,642 ) Balances, September 30, 2023 $ 14,060 |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE | For the nine months ended September 30, 2023 and 2022, the Company reserved shares of Common Stock for issuance as follows: SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE September 30, 2023 September 30, 2022 Options issued and outstanding 3,274,940 3,665,099 Common stock outstanding 58,880,712 38,576,658 Warrants outstanding 23,219,622 — Earnout shares 40,000,000 — Shares available for future issuance 4,470,153 639,395 Total 129,845,427 42,881,152 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK BASED COMPENSATION | Share-based compensation for the nine months ended September 30, 2023 and 2022 was allocated as follows: SCHEDULE OF STOCK BASED COMPENSATION September 30, 2023 2022 Cost of goods sold $ 104 $ 189 Research and development 82 307 Selling and marketing 1,033 326 General and administrative expense 5,168 333 Total $ 6,387 $ 1,155 Share-based compensation for the three months ended September 30, 2023 and 2022 was allocated as follows: September 30, 2023 2022 Cost of goods sold $ 29 $ 46 Research and development 33 136 Selling and marketing 62 134 General and administrative expense 822 120 Total $ 946 $ 436 |
SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION | A summary of the Company’s option activity and related information follows: SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION Number of Options (1) Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Life (in years) Aggregate intrinsic value Balances, January 1, 2022 3,690,955 $ 1.98 $ 1.38 8.52 $ 6,550 Options granted 602,275 4.08 1.81 Options forfeited (47,371 ) 3.29 2.07 Options exercised (580,760 ) 1.44 0.89 Balances, September 30, 2022 3,665,099 $ 2.40 $ — 8.22 $ 5,220 Balances, January 1, 2023 3,642,958 $ 2.02 $ 1.21 7.90 $ 35,989 Options granted 143,607 7.50 3.82 — Options forfeited (303,433 ) 3.50 1.89 — Options exercised (208,192 ) 1.72 0.96 — Balances, September 30, 2023 3,274,940 $ 2.14 $ 1.28 6.05 $ 0 At September 30, 2023 Vested and Exercisable 2,235,282 $ 1.68 5.07 $ 1,403 Vested and expected to vest 3,274,940 $ 2.14 6.05 $ 1,466 (1) Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately 1.182 as a result of the merger. See Note 1 for additional information. |
SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY | There were no grants of restricted stock units prior to October 7, 2022. The following table presents the restricted stock units activity for the nine months ended September 30, 2023: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY Number of Shares Weighted-Average Fair Market Value Unvested shares at January 1, 2023 180,000 $ 14.00 Granted and unvested 498,998 7.19 Vested (461,998 ) 7.50 Unvested shares, September 30, 2023 217,000 $ 12.17 Vested and exercisable as of September 30, 2023 — $ — |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF INFORMATION NEEDED TO COMPUTER BASIC AND DILUTED EARNINGS PER SHARE | The following table sets forth the information needed to compute basic and diluted loss per share for the three and nine months ended September 30, 2023 and 2022: SCHEDULE OF INFORMATION NEEDED TO COMPUTER BASIC AND DILUTED EARNINGS PER SHARE For The Three Months Ended September 30, For The Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net Loss attributable to common stockholders $ (10,023 ) $ (3,689 ) $ (16,831 ) $ (7,456 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 58,736,013 38,129,422 50,166,320 37,098,990 Net loss per share of Common Stock, basic and diluted $ (0.17 ) $ (0.10 ) $ (0.34 ) $ (0.20 ) |
SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET (LOSS) INCOME PER SHARE | 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) INCOME PER SHARE September 30, September 30, Warrants 23,219,622 — Restricted stock units 217,000 — Options 3,274,940 3,665,099 Weighted average number of common shares-basic 26,711,562 3,665,099 |
SCHEDULE OF VARIOUS CLASSES OF
SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES (Details) | Sep. 30, 2023 |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | Leasehold Improvements [Member] |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 7 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 3 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 7 years |
SCHEDULE OF DISAGGREGATED REVEN
SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total | $ 15,889 | $ 26,117 | $ 53,954 | $ 66,042 |
Sales Channel, Directly to Consumer [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 10,305 | 12,249 | 30,314 | 41,755 |
Original Equipment Manufacture [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | $ 5,584 | $ 13,868 | $ 23,640 | $ 24,287 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 USD ($) Vendor Customer $ / shares | Sep. 30, 2022 USD ($) Vendor Customer | Sep. 30, 2023 USD ($) Segment Vendor Customer $ / shares | Sep. 30, 2022 USD ($) Vendor Customer | Dec. 31, 2022 USD ($) Vendor $ / shares | Mar. 05, 2023 USD ($) | |
Product Information [Line Items] | ||||||
Cash and cash equivalents | $ 13,235 | $ 13,235 | ||||
Working capital | $ 22,000 | |||||
Loan amount | $ 100 | |||||
Period within which payment is due from customers | 30 – 90 days | |||||
Allowance for doubtful accounts | 178 | $ 178 | $ 90 | |||
Depreciation expense | $ 316 | $ 259 | $ 909 | $ 648 | ||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Customer deposits | $ 217 | $ 217 | $ 238 | |||
Contract liability recognized | 230 | 434 | ||||
Shipping and handling costs | 913 | 1,508 | 2,872 | 4,042 | ||
Warrant obilgation outstanding | 301 | 301 | 328 | |||
Advertising expense | 750 | $ 515 | 2,020 | $ 1,777 | ||
Uncertain tax position | $ 128 | $ 128 | $ 128 | |||
Number of operating segments | Segment | 1 | |||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Number of customers | Customer | 2 | |||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 38% | 18% | ||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer Two [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 15% | 10% | ||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Customer Three [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 10% | |||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Number of customers | Customer | 1 | 1 | 1 | 1 | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 19% | |||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 11% | 34% | 20% | |||
Accounts Payable [Member] | Customer Concentration Risk [Member] | Vendor One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 61% | |||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Number of vendors | Vendor | 1 | 1 | ||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 68% | |||||
Total Purchases [Member] | Supplier Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Number of vendors | Vendor | 3 | 3 | 1 | 1 | ||
Total Purchases [Member] | Supplier Concentration Risk [Member] | Vendor One [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 14% | 20% | 16% | 24% | ||
Total Purchases [Member] | Supplier Concentration Risk [Member] | Vendor Two [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 11% | 10% | ||||
Total Purchases [Member] | Supplier Concentration Risk [Member] | Vendor Three [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk, percentage | 10% | 10% | ||||
Minimum [Member] | ||||||
Product Information [Line Items] | ||||||
Payment term for distributors and OEMs | 30 days | |||||
Term of product warranty provided | 5 years | |||||
Maximum [Member] | ||||||
Product Information [Line Items] | ||||||
Payment term for distributors and OEMs | 90 days | |||||
Term of product warranty provided | 10 years | |||||
Senior Secured Term Loan Facility [Member] | Term Loan [Member] | ||||||
Product Information [Line Items] | ||||||
Loan amount | $ 75,000 | $ 75,000 |
SCHEDULE OF FAIR VALUE, ASSETS
SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | $ 14,165 | $ 32,831 |
Fair Value | 14,165 | 32,831 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 105 | 1,990 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 14,060 | 30,841 |
Term Loan [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 911 | 30,841 |
Fair Value | 911 | 30,841 |
Term Loan [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | ||
Term Loan [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | ||
Term Loan [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 911 | 30,841 |
Public Offering [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 13,149 | |
Fair Value | 13,149 | |
Public Offering [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | ||
Public Offering [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | ||
Public Offering [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 13,149 | |
Private Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 105 | 1,990 |
Fair Value | 105 | 1,990 |
Private Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | ||
Private Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 105 | 1,990 |
Private Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 36,850 | $ 42,586 |
Finished goods | 5,057 | 7,260 |
Total inventory | $ 41,907 | $ 49,846 |
SCHEDULE OF TABLE REPRESENTING
SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease right-of-use assets | $ 3,615 | $ 4,513 |
Short-term operating lease liabilities | 1,264 | 1,188 |
Long-term operating lease liabilities | 2,565 | 3,541 |
Total operating lease liabilities | $ 3,829 | $ 4,729 |
Weighted average remaining lease term | 2 years 10 months 24 days | 3 years 7 months 6 days |
Weighted average discount rate | 5.20% | 5.20% |
SCHEDULE OF THE FUTURE MINIMUM
SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |||
December 31, 2023 | [1] | $ 353 | |
December 31, 2024 | 1,435 | ||
December 31, 2025 | 1,435 | ||
December 31, 2026 | 893 | ||
Total lease payments | 4,116 | ||
Less imputed interest | 287 | ||
Total operating lease liabilities | $ 3,829 | $ 4,729 | |
[1]Represents scheduled payments for the remaining three-month period ending December 31, 2023. |
SCHEDULE OF LEASE COST (Details
SCHEDULE OF LEASE COST (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 02, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Loss Contingencies [Line Items] | |||||
Operating lease cost | $ 23 | $ 389 | $ 400 | $ 1,177 | $ 1,046 |
Cost of Sales [Member] | |||||
Loss Contingencies [Line Items] | |||||
Operating lease cost | 345 | 349 | 1,040 | 876 | |
Research and Development Expense [Member] | |||||
Loss Contingencies [Line Items] | |||||
Operating lease cost | 22 | 23 | 67 | 82 | |
General and Administrative Expense [Member] | |||||
Loss Contingencies [Line Items] | |||||
Operating lease cost | 11 | 14 | 35 | 44 | |
Selling and Marketing Expense [Member] | |||||
Loss Contingencies [Line Items] | |||||
Operating lease cost | $ 11 | $ 14 | $ 35 | $ 44 |
SCHEDULE OF TABLE REPRESENTIN_2
SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE FINANCE LEASES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Finance lease right-of-use assets | $ 112 | $ 45 |
Short-term finance lease liabilities | 36 | 10 |
Long-term finance lease liabilities | 75 | 38 |
Total finance lease liabilities | $ 111 | $ 48 |
Weighted average remaining lease term | 3 years | 4 years 2 months 12 days |
Weighted average discount rate | 5.20% | 5.20% |
SCHEDULE OF THE FUTURE MINIMU_2
SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE FINANCE LEASES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |||
December 31, 2023 | [1] | $ 10 | |
December 31, 2024 | 41 | ||
December 31, 2025 | 41 | ||
December 31, 2026 | 24 | ||
December 31, 2027 | 4 | ||
Total lease payments | 120 | ||
Less imputed interest | (9) | ||
Total finance lease liabilities | $ 111 | $ 48 | |
[1]Represents scheduled payments for the remaining three-month period ending December 31, 2023. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 02, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Loss Contingencies [Line Items] | |||||
Monthly base rent | $ 230 | ||||
Operating lease costs | 23 | $ 389 | $ 400 | $ 1,177 | $ 1,046 |
Estimated monthly property taxes | $ 21 | ||||
Percentage of escalation of monthly base rent | 3% | ||||
Percentage of escalation of fix operating expense costs | 2.40% | ||||
Finance lease agreemen term | 3 years | 5 years | 3 years | 5 years | |
Number of shares | 40,000,000 | 40,000,000 | |||
Audited revenue | $ 250,000 | ||||
Audited operating income | $ 35,000 | ||||
Share-Based Payment Arrangement, Tranche One [Member] | |||||
Loss Contingencies [Line Items] | |||||
Earnout shares issuable | 15,000,000 | 15,000,000 | |||
Share-Based Payment Arrangement, Tranche Two [Member] | |||||
Loss Contingencies [Line Items] | |||||
Earnout shares issuable | 12,500,000 | 12,500,000 | |||
Volume weighted average price per share | $ 32.50 | ||||
Share-Based Payment Arrangement, Tranche Two [Member] | Holders of Outstanding Shares of Legacy Dragonfly Common Stock [Member] | |||||
Loss Contingencies [Line Items] | |||||
Volume weighted average price per share | $ 22.50 | ||||
Share-Based Payment Arrangement, Tranche Three [Member] | |||||
Loss Contingencies [Line Items] | |||||
Earnout shares issuable | 12,500,000 | 12,500,000 | |||
Share-Based Payment Arrangement, Tranche Three [Member] | Holders of Outstanding Shares of Legacy Dragonfly Common Stock [Member] | |||||
Loss Contingencies [Line Items] | |||||
Volume weighted average price per share | $ 32.50 | ||||
Minimum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Lease payments | $ 111 | ||||
Maximum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Lease payments | $ 128 |
SCHEDULE OF LEVERAGE RATIO (Det
SCHEDULE OF LEVERAGE RATIO (Details) | 9 Months Ended |
Sep. 30, 2023 | |
June 30, 2023 - September 30, 2023 [Member] | |
Line of Credit Facility [Line Items] | |
Leverage ratio | 6.00 to 1.00 |
December 31, 2023 - March 31, 2024 [Member] | |
Line of Credit Facility [Line Items] | |
Leverage ratio | 5.00 to 1.00 |
June 30, 2024 - September 30, 2024 [Member] | |
Line of Credit Facility [Line Items] | |
Leverage ratio | 4.00 to 1.00 |
December 31, 2024 - March 31, 2025 [Member] | |
Line of Credit Facility [Line Items] | |
Leverage ratio | 3.25 to 1.00 |
June 30, 2025 and Thereafter [Member] | |
Line of Credit Facility [Line Items] | |
Leverage ratio | 3.00 to 1.00 |
SCHEDULE OF FUTURE DEBT MATURIT
SCHEDULE OF FUTURE DEBT MATURITIES (Details) $ in Thousands | Sep. 30, 2023 USD ($) | |
Debt Disclosure [Abstract] | ||
2023 | [1] | |
2024 | 938 | |
2025 | 3,750 | |
2026 | 74,931 | |
Total | 79,619 | |
Less: Estimated interest paid-in-kind | (4,964) | |
Total debt | 74,655 | |
Less: Unamortized debt issuance costs, noncurrent | (55,955) | |
Total carrying amount | 18,700 | |
Less: Current portion of debt | (18,700) | |
Total long-term debt | ||
[1]Represents scheduled payments for the remaining three-month period ending December 31, 2023. |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Oct. 07, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 05, 2023 | Nov. 24, 2021 | |
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 100,000 | |||||||
Interest expense | $ 3,977,000 | $ 1,166,000 | $ 11,905,000 | $ 3,657,000 | ||||
Term loan amount | 5,275 | |||||||
Long term debt | 74,655,000 | 74,655,000 | ||||||
Paid in kind interest | 3,738,000 | |||||||
Debt issuance costs | 55,955,000 | $ 55,955,000 | ||||||
Liquidity description | The Company shall not permit their Liquidity (determined on a consolidated basis) to be less than $10,000 as of the last day of each fiscal month (commencing with month ending December 31, 2022). | |||||||
Fixed charge coverage ratio description | The Fixed Charge Coverage Ratio is the ratio of consolidated EBITDA (less capital expenditures and certain other adjustments) to consolidated fixed charges, as defined in the agreement. If Liquidity is less than $15,000 as of the last day of any fiscal quarter (commencing with the quarter ended December 31, 2022), then the Company shall not permit the Fixed Charge Coverage Ratio for the trailing four quarterly periods ending on the last day of any such quarter to be less than 1.15 to 1.00. | |||||||
Capital expenditures description | If consolidated EBITDA for the trailing twelve-month period ending on the most recently completed fiscal quarter is less than $15,000, then the level of capital expenditures is limited. | |||||||
Senior Secured Term Loan Facility [Member] | Term Loan Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, amortization percentage | 5% | |||||||
Debt instrument, amortization amount | $ 937,500 | |||||||
Debt instrument, amortization period | 24 months | |||||||
Senior Secured Term Loan Facility [Member] | Term Loan Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 13.50% | |||||||
Senior Secured Term Loan Facility [Member] | Term Loan Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Until April 1 2023 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate, payable in cash | 7% | |||||||
Variable rate, payable in kind | 6.50% | |||||||
Senior Secured Term Loan Facility [Member] | Term Loan Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | After April 1, 2023 Until October 1, 2024 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate, payable in cash | 7% | |||||||
Senior Secured Term Loan Facility [Member] | Term Loan Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | After April 1, 2023 Until October 1, 2024 [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1% | |||||||
Variable rate, payable in cash | 11.50% | |||||||
Variable rate, payable in kind | 4.50% | |||||||
Senior Secured Term Loan Facility [Member] | Term Loan Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | After April 1, 2023 Until October 1, 2024 [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate, payable in cash | 13.50% | |||||||
Variable rate, payable in kind | 6.50% | |||||||
Maximum Senior Leverage Ratio [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument description | The Senior Leverage Ratio is the ratio of (a) consolidated indebtedness, as defined, on such date minus 100% of the unrestricted cash and cash equivalents held (subject to adjustment) to (b) Consolidated earnings before interest, tax and amortization (“EBITDA”) for the trailing twelve (12) fiscal month period most recently ended. Starting with the fiscal quarter ending December 31, 2023, (or through fiscal quarter ended September 30, 2023, only if liquidity, as defined, is less than $17,500), the Senior Leverage Ratio shall not be permitted | |||||||
Senior Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 45,000,000 | |||||||
Debt instrument, insured amount | $ 45,000,000 | |||||||
Loss on extinguishment | $ 4,824,000 | |||||||
Interest expense | 619,000 | 1,873,000 | ||||||
Amortization of debt issuance costs | $ 586,000 | $ 1,783,000 | ||||||
Senior Notes [Member] | Term Loan Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | 69,725,000 | 69,725,000 | ||||||
Amortization of debt issuance costs | 375,000 | 995,000 | ||||||
Interest expense | 3,589,000 | 10,736,000 | ||||||
Long term debt | 18,700,000 | 18,700,000 | ||||||
Paid in kind interest | 4,930,000 | |||||||
Debt issuance costs | $ 55,955,000 | $ 55,955,000 |
ASSET PURCHASE AGREEMENT (Detai
ASSET PURCHASE AGREEMENT (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jan. 01, 2022 | Apr. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Apr. 26, 2023 | Dec. 31, 2022 | |
Asset Acquisition [Line Items] | ||||||||
Selling and marketing expense | $ 3,083 | $ 3,358 | $ 11,075 | $ 9,331 | ||||
Related Party [Member] | ||||||||
Asset Acquisition [Line Items] | ||||||||
Repayment to related party | $ 720 | |||||||
Bourns Production, Inc [Member] | ||||||||
Asset Acquisition [Line Items] | ||||||||
Purchase price for acquiring machinery and equipment | $ 197 | |||||||
Thomason Jones Company LLC [Member] | ||||||||
Asset Acquisition [Line Items] | ||||||||
Purchase price for acquiring machinery and equipment | 444 | |||||||
Contingent payments | $ 1,000 | |||||||
Revenues | 3,000 | |||||||
Selling and marketing expense | 417 | |||||||
Accrued expense | 2,000 | 2,000 | $ 782 | |||||
Thomason Jones Company LLC [Member] | Related Party [Member] | ||||||||
Asset Acquisition [Line Items] | ||||||||
Repayment to related party | $ 1,000 | $ 1,000 | ||||||
Thomason Jones Company LLC [Member] | Maximum [Member] | ||||||||
Asset Acquisition [Line Items] | ||||||||
Purchase price for acquiring machinery and equipment | $ 700 |
RELATED PARTY (Details Narrativ
RELATED PARTY (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Apr. 26, 2023 | Mar. 05, 2023 | |
Related Party Transaction [Line Items] | |||||||
Gneral and administrative expense | $ 6,005 | $ 6,336 | $ 23,114 | $ 13,778 | |||
Original princial amount | $ 100 | ||||||
Share based compensation | 1,403 | 1,403 | $ 76 | ||||
Chief Operating Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Gneral and administrative expense | $ 116 | ||||||
Board of Directors Chairman [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory note | $ 1,000 | ||||||
Related Party [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Repayment to related party | $ 720 | ||||||
Related Party [Member] | Chief Operating Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Repayment to officer | 100 | ||||||
Repayment to related party | $ 1,000 | 1,000 | |||||
Promissory Note with Related Party | Chief Financial Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Repayment to officer | $ 469 |
SCHEDULE OF UNDERWRITER WARRANT
SCHEDULE OF UNDERWRITER WARRANTS (Details) | 9 Months Ended |
Sep. 30, 2023 shares | |
Underwriters’ Warrants Outstanding, September 30, 2023 | 23,219,622 |
Underwriter Warrants [Member] | |
Underwriters’ Warrants Outstanding, January 1, 2023 | |
Underwriters’ Warrants issued | 570,250 |
Underwriters’ Warrants Outstanding, September 30, 2023 | 570,250 |
SCHEDULE FAIR VALUE WARRANTS (D
SCHEDULE FAIR VALUE WARRANTS (Details) | Sep. 30, 2023 $ / shares | Dec. 31, 2022 $ / shares |
Penny Warrants [Member] | ||
Common stock price | $ 1.54 | $ 11.09 |
Fair value of warrants | $ 1.54 | $ 11.89 |
Penny Warrants [Member] | Measurement Input, Share Price [Member] | ||
Common stock price | 0.01 | 0.01 |
Penny Warrants [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Common stock price | 0 | 0 |
Penny Warrants [Member] | Measurement Input, Expected Term [Member] | ||
Warrant term | 9 years 7 days | 9 years 9 months 7 days |
Penny Warrants [Member] | Measurement Input, Price Volatility [Member] | ||
Common stock price | 113 | 90 |
Penny Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Common stock price | 4.60 | 3.90 |
Offering Warrants [Member] | ||
Common stock price | $ 1.54 | |
Fair value of warrants | $ 1.18 | |
Offering Warrants [Member] | Measurement Input, Share Price [Member] | ||
Common stock price | 2 | |
Offering Warrants [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Common stock price | 0 | |
Offering Warrants [Member] | Measurement Input, Expected Term [Member] | ||
Warrant term | 4 years 8 months 23 days | |
Offering Warrants [Member] | Measurement Input, Price Volatility [Member] | ||
Common stock price | 111 | |
Offering Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Common stock price | 4.6 |
SCHEDULE OF ROLL FORWARD IN WAR
SCHEDULE OF ROLL FORWARD IN WARRANTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Underwriters’ Warrants Outstanding, September 30, 2023 | 23,219,622 | 23,219,622 | ||
Change in fair value of warrants | $ (145) | $ 19,182 | ||
Private Warrants [Member] | ||||
Warrants Outstanding, January 1, 2023 | 4,627,858 | |||
Exercise of warrants | (3,126,472) | |||
Warrants Outstanding, September 30, 2023 | 1,501,386 | 1,501,386 | ||
Public Warrants [Member] | ||||
Warrants Outstanding, January 1, 2023 | 9,487,500 | |||
Exercise of warrants | (64,971) | |||
Warrants Outstanding, September 30, 2023 | 9,422,529 | 9,422,529 | ||
Term Loan Warrants [Member] | ||||
Warrants Outstanding, January 1, 2023 | 2,593,056 | |||
Warrants issued | 501 | |||
Exercise of warrants | (2,000,000) | |||
Warrants Outstanding, September 30, 2023 | 593,557 | 593,557 | ||
Investor Warrants [Member] | ||||
Underwriters’ Warrants Outstanding, January 1, 2023 | ||||
Warrants issued | 11,405,000 | |||
Exercise of warrants | (273,100) | |||
Underwriters’ Warrants Outstanding, September 30, 2023 | 11,131,900 | 11,131,900 | ||
Warrant [Member] | ||||
Balances, January 1, 2023 | $ 30,841 | |||
Issuance of warrants | 13,762 | |||
Exercise of warrants | (11,901) | |||
Change in fair value of warrants | (18,642) | |||
Balances, September 30, 2023 | $ 14,060 | $ 14,060 |
WARRANTS (Details Narrative)
WARRANTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 10, 2022 | Oct. 07, 2022 | Sep. 30, 2022 | |
Warrant, excersie price | $ 11.50 | |||||
Warrants outstanding | 23,219,622 | |||||
Exercise of public warrants | $ 747 | $ 747 | ||||
Exercise of public warrants, shares | 64,971 | |||||
Common stock, shares issued | 58,880,712 | 43,272,728 | ||||
Warrant exercise purchase, description | the Company issued (i) the penny warrants to the Term Loan Lenders exercisable to purchase an aggregate of 2,593,056 shares of Common Stock (the “Penny Warrants”) and (ii) the $10 warrants to issue warrants to the Term Loan Lenders exercisable to purchase an aggregate of 1,600,000 shares of Common Stock at $10 per share (the “$10 Warrants” and, together with the Penny Warrants, the “Term Loan Warrants”). The $10 Warrants were exercised on a cashless basis on October 10, 2022, with the Company issuing 457,142 shares of Common Stock in connection with such exercise. | |||||
Underwriters Warrants [Member] | ||||||
Warrant, excersie price | $ 2.50 | |||||
Common stock, shares issued | 570,250 | |||||
Warrant excersie price, rate | 125% | |||||
Common Stock [Member] | ||||||
Exercise of public warrants | ||||||
Exercise of public warrants, shares | 64,971,000 | |||||
Warrants, shares | 73,500,000 | 10,000,000 | ||||
Share issued, price share | $ 2 | |||||
Common Stock [Member] | Maximum [Member] | ||||||
Warrants, shares | 10,000,000 | |||||
Common Stock [Member] | Over-Allotment Option [Member] | ||||||
Warrants, shares | 1,500,000 | |||||
Common Stock [Member] | Over-Allotment Option [Member] | Maximum [Member] | ||||||
Warrants, shares | 1,500,000 | |||||
Warrant [Member] | ||||||
Share issued, price share | $ 2 | |||||
Underwriting Warrants [Member] | Maximum [Member] | ||||||
Warrants, shares | 1,500,000 | |||||
Investor Warrants [Member] | ||||||
Warrants outstanding | 11,131,900 | |||||
Warrants, shares | 1,405,000 | |||||
Investor Warrants [Member] | Maximum [Member] | ||||||
Warrants, shares | 1,405,000 | |||||
Investor Warrants [Member] | Over-Allotment Option [Member] | ||||||
Warrants, shares | 1,405,000 | |||||
Public Warrants [Member] | ||||||
Warrant, excersie price | 0.01 | |||||
Sale price | $ 16 | |||||
Warrants outstanding | 9,487,500 | |||||
Private Placement Warrants [Member] | ||||||
Warrants outstanding | 1,501,386 | 4,627,858 | ||||
Warrants, shares | 1,100,000 | |||||
Number of warrants issued | 3,126,472 | |||||
Penny Warrants [Member] | ||||||
Number of warrants issued | 2,593,056 | |||||
Penny Warrants [Member] | Common Stock [Member] | ||||||
Number of warrants issued | 2,000,000 | |||||
10 Warrants [Member] | ||||||
Sale price | $ 10 | |||||
Number of warrants issued | 1,600,000 | 457,142 | ||||
10 Warrants [Member] | Common Stock [Member] | ||||||
Number of warrants issued | 1,996,323 |
SUMMARY OF RESERVED SHARES OF C
SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE (Details) - shares | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||||
Options issued and outstanding | [1] | 3,274,940 | 3,642,958 | 3,665,099 | 3,690,955 |
Common stock outstanding | 58,880,712 | 43,272,728 | 38,576,658 | ||
Warrants outstanding | 23,219,622 | ||||
Earnout shares | 40,000,000 | ||||
Shares available for future issuance | 4,470,153 | 639,395 | |||
Total | 129,845,427 | 42,881,152 | |||
[1]Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately 1.182 as a result of the merger. See Note 1 for additional information. |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Oct. 07, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Common stock, shares authorized | 170,000,000 | 170,000,000 | 170,000,000 | ||||
Common stock, shares issued | 58,880,712 | 58,880,712 | 43,272,728 | ||||
Common stock, shares outstanding | 58,880,712 | 38,576,658 | 58,880,712 | 38,576,658 | 43,272,728 | ||
Aggregate net proceeds | $ 15,000 | ||||||
Excersie price | $ 11.50 | ||||||
Expiration date | Jun. 20, 2028 | ||||||
Proceeds from issuance of common stock | $ 22,810 | ||||||
Related costs | 2,074 | ||||||
Adjustment to additional paid in capital warrant issued | 1,169 | ||||||
General and administrative expense | $ 6,005 | $ 6,336 | 23,114 | $ 13,778 | |||
Fair value liability | $ 13,762 | $ 13,762 | |||||
Common Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 73,500,000 | 10,000,000 | |||||
Share issued price share | $ 2 | $ 2 | |||||
Common Stock [Member] | Over-Allotment Option [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 1,500,000 | ||||||
Offering Warrants [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Excersie price | $ 2 | $ 2 | |||||
Underwriters Warrants [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Common stock, shares issued | 570,250 | 570,250 | |||||
Excersie price | $ 2.50 | $ 2.50 | |||||
Investor Warrants [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 1,405,000 | ||||||
Investor Warrants [Member] | Over-Allotment Option [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 1,405,000 | ||||||
Warrant [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Share issued price share | $ 2 | $ 2 | |||||
General and administrative expense | $ 904 | ||||||
Maximum [Member] | Common Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 10,000,000 | ||||||
Maximum [Member] | Common Stock [Member] | Over-Allotment Option [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 1,500,000 | ||||||
Maximum [Member] | Investor Warrants [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 1,405,000 | ||||||
Purchase Agreement [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Shares new issues | 98,500 | ||||||
Aggregate net proceeds | $ 671 | ||||||
Purchase Agreement [Member] | Maximum [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Aggregated purchase price | $ 150,000 |
SCHEDULE OF STOCK BASED COMPENS
SCHEDULE OF STOCK BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | $ 946 | $ 436 | $ 6,387 | $ 1,155 |
Cost of Sales [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | 29 | 46 | 104 | 189 |
Research and Development Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | 33 | 136 | 82 | 307 |
Selling and Marketing Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | 62 | 134 | 1,033 | 326 |
General and Administrative Expense [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total | $ 822 | $ 120 | $ 5,168 | $ 333 |
SCHEDULE OF OPTION ACTIVITY AND
SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Share-Based Payment Arrangement [Abstract] | |||
Number of Options, Balance at the beginning | [1] | 3,642,958 | 3,690,955 |
Weighted- Average Exercise Price - Balances at the beginning | $ 2.02 | $ 1.98 | |
Weighted- Average Grant Date Fair Value, Balances at the beginning | $ 1.21 | $ 1.38 | |
Weighted- Average Remaining Contractual Life (in years) | 7 years 10 months 24 days | 8 years 6 months 7 days | |
Aggregate Intrinsic value Balances at the beginning | $ 35,989 | $ 6,550 | |
Number of Options granted | [1] | 143,607 | 602,275 |
Weighted- Average Exercise Price Options granted | $ 7.50 | $ 4.08 | |
Weighted- Average Grant Date Fair Value, Options granted | $ 3.82 | $ 1.81 | |
Number of Options forfeited | [1] | (303,433) | (47,371) |
Weighted- Average Exercise Price Options forfeited | $ 3.50 | $ 3.29 | |
Weighted- Average Grant Date Fair Value, Options forfeited | $ 1.89 | $ 2.07 | |
Number of Options exercised | [1] | (208,192) | (580,760) |
Weighted- Average Exercise Price Options exercised | $ 1.72 | $ 1.44 | |
Weighted- Average Grant Date Fair Value, Options exercised | $ 0.96 | $ 0.89 | |
Number of Options, Balance at the end | [1] | 3,274,940 | 3,665,099 |
Weighted- Average Exercise Price Balances at the end | $ 2.14 | $ 2.40 | |
Weighted- Average Grant Date Fair Value,Balances at the end | $ 1.28 | ||
Weighted- Average Remaining Contractual Life (in years) | 6 years 18 days | 8 years 2 months 19 days | |
Aggregate Intrinsic value Balances at the end | $ 0 | $ 5,220 | |
Aggregate Intrinsic value Options granted | |||
Aggregate Intrinsic value Options forfeited | |||
Aggregate Intrinsic value Options exercised | |||
Number of Options, Vested and Exercisable | [1] | 2,235,282 | |
Weighted- Average Exercise Price Vested and Exercisable | $ 1.68 | ||
Weighted- Average Remaining Contractual Life (in years) | 5 years 25 days | ||
Aggregate Intrinsic value Vested and Exercisable | $ 1,403 | ||
Number of Options, Vested and expected to vest | [1] | 3,274,940 | |
Weighted- Average Exercise Price Vested and expected to vest | $ 2.14 | ||
Weighted- Average Remaining Contractual Life (in years) | 6 years 18 days | ||
Aggregate Intrinsic value Vested and expected to vest | $ 1,466 | ||
[1]Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately 1.182 as a result of the merger. See Note 1 for additional information. |
SCHEDULE OF RESTRICTED STOCK UN
SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares , beginning balance | 180,000 |
Weighted average fair market value , beginning balance | $ / shares | $ 14 |
Number of shares granted and unvested | 498,998 |
Weighted average fair market value granted and unvested | $ / shares | $ 7.19 |
Number of shares vested | (461,998) |
Weighted average fair market value vested | $ / shares | $ 7.50 |
Number of shares , ending balance | 217,000 |
Weighted average fair market value , ending balance | $ / shares | $ 12.17 |
Number of shares ,vested |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Oct. 07, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 10, 2023 | Dec. 31, 2022 | |
2022 Equity Incentive Plan and Employee Stock Purchase Plan [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Unissued authorized and available for future awards | 4,470,153 | 4,470,153 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ 946,000 | $ 436,000 | $ 6,387,000 | $ 1,155,000 | |||
Restricted Stock Units | 180,000 | 217,000 | 217,000 | 461,998 | 180,000 | ||
Restricted stock units, value | $ 2,520,000 | $ 3,464,000 | |||||
Restricted Stock Units Unvested [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restricted stock units, value | $ 16,000 | $ 121,000 | |||||
Restricted stock units, unvested | 9,000 | 37,000 | |||||
Restricted Stock Units Vested [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restricted stock units, value | $ 0 | $ 14,000 |
SCHEDULE OF INFORMATION NEEDED
SCHEDULE OF INFORMATION NEEDED TO COMPUTER BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net Loss attributable to common stockholders | $ (10,023) | $ (3,689) | $ (16,831) | $ (7,456) |
Weighted average common shares outstanding used to compute net loss per share, basic | 58,736,013 | 38,129,422 | 50,166,320 | 37,098,990 |
Weighted average common shares outstanding used to compute net loss per share, diluted | 58,736,013 | 38,129,422 | 50,166,320 | 37,098,990 |
Net loss per share of Common Stock, basic | $ (0.17) | $ (0.10) | $ (0.34) | $ (0.20) |
Net loss per share of Common Stock, diluted | $ (0.17) | $ (0.10) | $ (0.34) | $ (0.20) |
SCHEDULE OF POTENTIAL SHARES OF
SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET (LOSS) INCOME PER SHARE (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of common shares-basic | 26,711,562 | 3,665,099 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of common shares-basic | 3,274,940 | 3,665,099 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of common shares-basic | 217,000 | |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of common shares-basic | 23,219,622 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (886) | $ (1,700) | ||
Income tax expense (benefit) | $ 886 | $ 1,700 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 9 Months Ended | ||
Oct. 01, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Subsequent Event [Line Items] | |||
Net cash proceeds | $ 15,000,000 | ||
Purchase of warrants | 23,219,622 | ||
ChEF Equity Facility [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Common stock issued in public offering (ATM), net of costs, shares | 490,000 | ||
Net cash proceeds | $ 607,973 | ||
Purchase of warrants | 4,277 |