DFLI Dragonfly Energy Holdings Corporation

On March 5, 2023, Dragonfly Energy Holdings Corp. (the “Company”) issued an unsecured promissory note (the “Note”) in the principal amount of $1,000,000 (the “Principal Amount”) to Brian Nelson, a director of the Company (the “Holder”), in a private placement in exchange for cash in an equal amount (the “Private Placement”). The Company intends to use the proceeds of the Private Placement for working capital and general corporate purposes.

The Note becomes due and payable in full on April 1, 2023 (the “Maturity Date”). The Company is also obligated to pay $100,000 (the “Loan Fee”) to the Holder on April 4, 2023 (the “Loan Fee Payment Date”). If the Company does not pay the Loan Fee by the Loan Fee Payment Date, an additional $100,000 will accrue in full on April 5, 2023 (the “Penalty Fee”). In addition, for so long as the Principal Amount, the Loan Fee and the Penalty Fee remain outstanding, an additional $100,000 will accrue in full on May 3, 2023. If the balance of the Note, including the outstanding Principal Amount and all accrued but unpaid fees, charges and expenses under the Note, has not been fully repaid by June 1, 2023, the Company will have the option to repay the balance with any combination of cash and shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). If the Company opts to repay the balance of the Note with shares of Common Stock, the amount of shares to be issued will be calculated at a price per share equal to the consolidated closing bid price of the Common Stock as reported by The Nasdaq Global Market (“Nasdaq”) on the date immediately prior to payment; however, such price will not be less than $4.18 per share.

The Note contains customary events of default, including nonpayment of any amounts under the Note when due, upon which the payment of the Principal Amount, the Loan Fee and any other unpaid fees, expenses or other charges may be accelerated. The Company may, at any time, prepay the amount due under the Note without premium or penalty. In addition, the Company is obligated to repay all outstanding obligations under the Note within one business day upon the occurrence of a Change of Control (as defined in the Note) of the Company.

The Holder has represented to the Company that it is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Company relied on the exemption from registration afforded by Section 4(2) of the Securities Act in connection with the issuance of the Note.

The foregoing summary is qualified in its entirety by reference to the full text of the Note, which is attached hereto as Exhibit 4.1 and incorporated herein by reference.