Item
1.01 Entry into a Material Definitive Agreement.
On
June 20, 2023, Dragonfly Energy Holdings Corp. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with Roth Capital Partners, LLC, as representative of the several underwriters (the “Underwriters”),
pursuant to which the Company agreed to sell to the Underwriters, in a firm commitment underwritten public offering (the “Offering”),
an aggregate of (i) 10,000,000 shares (the “Shares”) of its common stock, par value $0.0001 per share (“Common
Stock”) and (ii) accompanying warrants to purchase up to 10,000,000 shares of Common Stock (the “Warrants”
and, together with the Shares, the “Securities”), at the combined public offering price of $2.00 per Share and accompanying
Warrant, less underwriting discounts and commissions. In addition, the Company granted the Underwriters a 45-day over-allotment option
to purchase up to an additional 1,500,000 shares of Common Stock and/or Warrants to purchase up to an aggregate of 1,500,000
shares of Common Stock at the public offering price per security, less underwriting discounts and commissions. The Offering is expected
to close on June 22, 2023.
Pursuant
to the Underwriting Agreement, the Company will issue to the Underwriters warrants to purchase up to an aggregate of 500,000 shares
of Common Stock (or up to 575,000 shares of Common Stock if the Underwriters’ option to purchase additional shares is exercised
in full) (the “Underwriters’ Warrants”). The Underwriters’ Warrants are exercisable upon issuance and
will expire on June 20, 2028. The initial exercise price of the Underwriters’ Warrants is $2.50 per share, which equals 125% of
the per share public offering price in the Offering.
The
net proceeds to the Company from the Offering are expected to be approximately $18.2 million (or approximately $21.0 million
if the Underwriters’ option to purchase additional Shares and/or Warrants is exercised in full), after deducting underwriting discounts
and commissions and estimated offering expenses. The Company expects to use the proceeds from the Offering for working capital and general
corporate purposes.
The
Warrants are exercisable for five years from the closing date of the Offering, have an exercise price of $2.00 per share and are immediately
exercisable. In the event of certain fundamental transactions, holders of the Warrants will have the right to receive the Black Scholes
Value (as defined in the Warrants) of their Warrants calculated pursuant to the formula set forth in the Warrants, payable either in cash
or in the same type or form of consideration that is being offered and being paid to the holders of Common Stock.
The Securities
are being sold to the public pursuant to the Company’s registration statement on Form S-1 (File No. 333-272401), initially filed
by the Company with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the
“Securities Act”) on June 5, 2023, and declared effective on June 20, 2023.
The
Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing,
indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act, other obligations
of the parties and termination provisions. Further, pursuant to the terms of the Underwriting Agreement and related “lock-up”
agreements, the Company and each director and executive officer of the Company have agreed with the Underwriters not to offer for sale,
issue, sell, contract to sell, pledge or otherwise dispose of any of our Common Stock or securities convertible into Common Stock for
a period of 90 days commencing on the date of the Underwriting Agreement.
The
foregoing description of the Underwriting Agreement, the Warrants and the Underwriters’ Warrants are not complete and are qualified
in their entirety by references to the full text of the form of Underwriting Agreement, the form of Warrant and the form of Underwriters’
Warrant, which are filed as Exhibits 1.1, 4.1 and 4.2, respectively, to this report and are incorporated by reference herein.