In a recent filing with the Securities and Exchange Commission, Dragonfly Energy Holdings Corp. (NASDAQ:DFLI) disclosed an amendment to its loan agreement and the issuance of penny warrants. The Nevada-based energy company, specializing in miscellaneous electrical machinery, equipment, and supplies, entered into a limited waiver and first amendment to its Term Loan, Guarantee, and Security Agreement on Thursday.
The amendment comes as a response to the company's non-compliance with certain financial ratio tests as of June 30, 2024. To address this, Dragonfly Energy has issued penny warrants allowing the purchase of up to 2.1 million shares of common stock at $0.01 per share. These warrants are exercisable immediately and will remain valid for ten years from the date of issue.
Additionally, the amendment has adjusted the company's liquidity requirements, reducing the minimum to $3.5 million by the end of June 2024, followed by a monthly requirement of $10 million starting July 31, 2024. Furthermore, the interest due on July 1, 2024, will be paid in kind rather than in cash.
The issuance of the penny warrants and the adjustments to the loan agreement are strategic moves by Dragonfly Energy to maintain financial flexibility. The penny warrants and the shares issuable upon their exercise were offered in a private transaction, exempt from registration under the Securities Act of 1933, pursuant to Section 4(a)(2) of the Act.
This information is based on a press release statement.
In other recent news, Dragonfly Energy has been granted an additional 180-day grace period to meet Nasdaq's minimum bid price requirement. The renewable energy company, which initially fell short of the $1.00 minimum bid price, is considering all available options to regain compliance. However, there is no guarantee of achieving or maintaining the Nasdaq listing criteria.
On the financial front, Dragonfly Energy reported a return to growth in its Q1 2024 earnings call, particularly in the recreational vehicle market. The company recorded net sales of $12.5 million, with a net loss of $10.4 million for Q1. Dragonfly Energy anticipates Q2 revenues to rise to between $14.0 million and $15.0 million, with expected net losses ranging from $8 million to $10 million.
In addition to its financial performance, Dragonfly Energy has announced its entry into the heavy-duty trucking market. The company is also expanding into the industrial solar and stationary storage markets, with initial deployment in the oil and gas industry.
InvestingPro Insights
In the context of Dragonfly Energy Holdings Corp.'s (NASDAQ:DFLI) recent financial maneuvers, InvestingPro provides key metrics and tips that shed light on the company's current market position and performance. With a market capitalization of $51.73 million, Dragonfly Energy is navigating a challenging financial landscape, as evidenced by its significant debt burden and the amendment to its loan agreement.
An InvestingPro Tip highlights that the company is quickly burning through cash, which aligns with the recent amendment to its liquidity requirements and the issuance of penny warrants to enhance financial flexibility. Additionally, the company's stock price often moves in the opposite direction of the market, which could be a point of concern for investors looking for market-correlated growth.
From a valuation standpoint, Dragonfly Energy's Price / Book ratio for the last twelve months as of Q1 2024 stands at 2.9, which may be of interest to investors assessing the company's market value against its book value. Moreover, the company's revenue has seen a significant decline of 33.01% over the last twelve months as of Q1 2024, which may have implications for its ability to meet financial obligations and invest in growth opportunities.
Investors should note that Dragonfly Energy does not pay a dividend to shareholders, which could influence investment decisions for those seeking regular income streams. For those interested in a deeper analysis, InvestingPro offers additional insights, including a total of 13 InvestingPro Tips for Dragonfly Energy, which can be accessed at https://www.investing.com/pro/DFLI. To access these valuable tips and more, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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