0001493152-24-019360 | 10-Q | XBRL Viewer | Dragonfly Energy Holdings Corp

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SCHEDULE OF CHANGES FOR LEVEL 3 ITEMS MEASURED AT FAIR VALUE ON RECURRING BASIS USING SIGNIFICANT UNOBSERVABLE INPUTS (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2024

Mar. 31, 2023

Term Loan [Member]

Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]

Fair value as of January 1, 2023

$ 1,014

$ 30,841

Warrant exercises

(8,822)

Change in fair value, gain included in net loss

^[1]

(4)

(17,998)

Fair value as of March 31, 2023

1,010

$ 4,021

June Public Offering [Member]

Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]

Fair value as of January 1, 2023

3,434

Change in fair value, gain included in net loss

^[1]

(220)

Fair value as of March 31, 2023

$ 3,214

[1]	Changes in fair value of warrant liabilities are disclosed separately in the Condensed Consolidated Statements of Operations

WARRANTS (Details Narrative) - $ / shares	3 Months Ended		12 Months Ended
WARRANTS (Details Narrative) - $ / shares	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 29, 2023	Oct. 10, 2022
Exercise of public warrants, shares	0
Warrants outstanding	24,510,575	12,266,971
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.
Common Stock [Member]
Exercise of public warrants, shares		64,971,000
Warrants, shares		73,500,000
Public Warrants [Member]
Warrants issued	9,487,500	9,487,500
Warrants outstanding	9,487,500	9,487,500
Private Placement Warrants [Member]
Number of warrants issued			3,126,472
Warrants, shares			1,100,000
Warrants outstanding	1,501,386		1,501,386
Penny Warrants [Member]
Number of warrants issued	2,593,056
Penny Warrants [Member] \| Common Stock [Member]
Number of warrants issued			2,000,000	1,286,671
Penny Warrants [Member] \| Common Stock [Member] \| Lenders [Member]
Number of warrants issued			4,783
Warrants 10 [Member]
Number of warrants issued	1,600,000				457,142
Share Price	$ 10
Warrants 10 [Member] \| Common Stock [Member]
Number of warrants issued			1,996,323

COMMON STOCK (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE

For the three months ended March 31, 2024 and 2023, the Company had reserved shares of common stock for issuance as follows:

	March 31, 2024		March 31, 2023
Options issued and outstanding		2,315,299		3,731,392
Common stock outstanding		60,260,282		45,795,502
Warrants outstanding		24,510,575		12,266,971
Earnout shares		40,000,000		40,000,000
Shares available for future issuance		10,986,525		4,319,309
Total		138,072,681		106,113,174

SCHEDULE FAIR VALUE WARRANTS (Details) - $ / shares	3 Months Ended	12 Months Ended
SCHEDULE FAIR VALUE WARRANTS (Details) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Penny Warrants [Member]
Common stock price	$ 0.54	$ 0.54
Exercise price	$ 0.01	$ 0.01
Dividend yield	0.00%	0.00%
Term		10 years
Volatility	96.00%	96.00%
Risk-free rate	4.20%	3.90%
Fair value	$ 0.54	$ 0.54
Penny Warrants [Member] \| Minimum [Member]
Term	8 years 6 months 7 days
Penny Warrants [Member] \| Maximum [Member]
Term	9 years 9 months
Investor Warrants [Member]
Common stock price	$ 0.54	0.54
Exercise price	$ 2.00	$ 2.00
Dividend yield	0.00%	0.00%
Term	4 years 2 months 23 days	4 years 5 months 23 days
Volatility	104.00%	106.00%
Risk-free rate	4.30%	3.90%
Fair value	$ 0.29	$ 0.31

LONG TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

SCHEDULE OF FUTURE DEBT MATURITIES

At March 31, 2024, the future debt maturities are as follows:

SCHEDULE OF FUTURE DEBT MATURITIES

For Year Ended December 31,
2024		-
2025		938
2026		78,703
Total		79,641
Less: Estimated interest paid-in-kind		(2,527	)
Total debt		77,114
Less: Unamortized debt issuance costs		(55,277	)
Total carrying amount		21,837
Less: Current portion of debt		(21,837	)
Total long-term debt	$	-

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

SCHEDULE OF BREAKOUT OF OPERATING LEASES (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating lease right-of-use assets	$ 23,988	$ 3,315
Short-term operating lease liabilities	1,682	1,288
Long-term operating lease liabilities	22,763	2,234
Total operating lease liabilities	$ 24,445	$ 3,522
Weighted average remaining lease term	9 years 3 months 14 days	2 years 7 months 6 days
Weighted average discount rate	7.75%	5.20%

NATURE OF BUSINESS

3 Months Ended

Mar. 31, 2024

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 distributors 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.

SUBSEQUENT EVENTS (Details Narrative)							3 Months Ended
SUBSEQUENT EVENTS (Details Narrative)	Apr. 30, 2024 USD ($) shares	Apr. 24, 2024 shares	Apr. 17, 2024 shares	Apr. 12, 2024 USD ($) ft² shares	Feb. 05, 2024 shares	Feb. 10, 2023 shares	Mar. 31, 2024 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) shares	May 13, 2024 $ / shares shares	Dec. 31, 2023 $ / shares
Subsequent Event [Line Items]
Stock options exercised shares \| shares
Stock options exercised value \| $								$ 93,000
Cash \| $							$ 8,501,000
Common stock, shares par value \| $ / shares							$ 0.0001			$ 0.0001
Common Stock [Member]
Subsequent Event [Line Items]
Stock options exercised shares \| shares								36,009
Stock options exercised value \| $
Restricted Stock Units (RSUs) [Member]
Subsequent Event [Line Items]
Shares issued \| shares					220,000	461,998	220,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, Conversion of Units \| shares			3,428
Stock Issued During Period, Shares, Employee Stock Purchase Plans \| shares		244,774
Stock options exercised shares \| shares	992
Stock options exercised value \| $	$ 1
Area of land \| ft²				64
Payments for rent \| $				$ 45,000
Lease term percentage				3.00%
Security deposit \| $				$ 50,000
Subsequent Event [Member] \| May 2024 Penny Warrants [Member] \| Common Stock [Member]
Subsequent Event [Line Items]
Warrans purchase \| shares									2,550,000
Common stock, shares par value \| $ / shares									$ 0.0001
Exercise price \| $ / shares									$ 0.01
Warrants exercisable Term									10 years
Subsequent Event [Member] \| Chief Executive Officer [Member]
Subsequent Event [Line Items]
Issuance of cash and equity awards \| $				1,532,000
Subsequent Event [Member] \| Chief Revenue Officer [Member]
Subsequent Event [Line Items]
Issuance of cash and equity awards \| $				490,000
Subsequent Event [Member] \| Chief Marketing Officer [Member]
Subsequent Event [Line Items]
Issuance of cash and equity awards \| $				$ 236,000
Subsequent Event [Member] \| Restricted Stock Units (RSUs) [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, Conversion of Units \| shares			4,875
Shares issued \| shares				836,295
Cash \| $				$ 30,000
Number of shares authorized for issuance \| shares				222,222
Subsequent Event [Member] \| Restricted Stock Units (RSUs) [Member] \| Chief Executive Officer [Member]
Subsequent Event [Line Items]
Issuance of cash and equity awards \| $				$ 511,000
Shares issued \| shares				567,407
Subsequent Event [Member] \| Restricted Stock Units (RSUs) [Member] \| Chief Revenue Officer [Member]
Subsequent Event [Line Items]
Issuance of cash and equity awards \| $				$ 163,000
Shares issued \| shares				181,481
Subsequent Event [Member] \| Restricted Stock Units (RSUs) [Member] \| Chief Marketing Officer [Member]
Subsequent Event [Line Items]
Issuance of cash and equity awards \| $				$ 79,000
Shares issued \| shares				87,407

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

SCHEDULE OF FAIR VALUE OF 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 March 31, 2024:

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of March 31, 2024
Liabilities
Warrant liability- Term Loan	$	1,010	$	1,010	$	-	$	-	$	1,010
Warrant liability- June Public Offering		3,214		3,214		-		-		3,214
Warrant liability- Private Placement Warrants		3		3		-		3		-
Total liabilities	$	4,227	$	4,227	$	-	$	3	$	4,224

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 December 31, 2023:

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of December 31, 2023
Liabilities
Warrant liability- Term Loan	$	1,014	$	1,014	$	-	$	-	$	1,014
Warrant liability- June Public Offering		3,434		3,434		-		-		3,434
Warrant liability- Private placement warrants		15		15		-		15		-
Total liabilities	$	4,463	$	4,463	$	-	$	15	$	4,448

SCHEDULE OF CHANGES FOR LEVEL 3 ITEMS MEASURED AT FAIR VALUE ON RECURRING BASIS USING SIGNIFICANT UNOBSERVABLE INPUTS

The changes for Level 3 items measured at fair value on recurring basis using significant unobservable inputs are as follows:

	Warrant Liability - Term Loan			Warrant liability- June Public Offering
Fair value as of January 1, 2024	$	1,014		$	3,434
Warrant exercises
Change in fair value, gain included in net loss⁽¹⁾		(4	)		(220	)
Fair value as of March 31, 2024	$	1,010		$	3,214

	Warrant Liability - Term Loan
Fair value as of January 1, 2023	$	30,841
Warrant exercises		(8,822	)
Change in fair value, gain included in net loss⁽¹⁾		(17,998	)
Fair value as of March 31, 2023	$	4,021

⁽¹⁾	Changes in fair value of warrant liabilities are disclosed separately in the Condensed Consolidated Statements of Operations

RELATED PARTY (Details Narrative) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended
RELATED PARTY (Details Narrative) - USD ($) $ in Thousands	Nov. 07, 2023	Apr. 26, 2023	Feb. 28, 2023	Mar. 31, 2024	Mar. 31, 2023	Feb. 27, 2024	Jan. 26, 2024	Mar. 05, 2023
Related Party Transaction [Line Items]
Stock options exercised
Gneral and administrative expense				$ 4,813	$ 9,495
Chief Legal Officer [Member]
Related Party Transaction [Line Items]
Due to related party		$ 720
Share based compensation		$ 76
March Note [Member]
Related Party Transaction [Line Items]
Promissory note								$ 1,000
Loan fee amount								$ 100
January Note [Member]
Related Party Transaction [Line Items]
Promissory note							$ 1,000
Loan fee amount							$ 50
February Note [Member]
Related Party Transaction [Line Items]
Promissory note						$ 1,700
Loan fee amount						$ 85
Chief Operating Officer [Member]
Related Party Transaction [Line Items]
Repayment to officer				100
Due to related party				$ 1,000
Stock options exercised	100,000
Stock options expired	76,316
Gneral and administrative expense			$ 116

ASSET PURCHASE AGREEMENT (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Apr. 30, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Asset Acquisition [Line Items]
Cost of sales	$ 3,000	$ 9,454	$ 14,124
Selling and Marketing Expense [Member]
Asset Acquisition [Line Items]
Compensation expense				$ 2,000
Thomason And Jones [Member]
Asset Acquisition [Line Items]
Payment of related party	1,000
Inventory and Intellectual Property Assets [Member]
Asset Acquisition [Line Items]
Purchase price for acquiring machinery and equipment		$ 444
Inventory and Intellectual Property Assets [Member] \| Richard Jones [Member]
Asset Acquisition [Line Items]
Contingent payments	1,000
Inventory and Intellectual Property Assets [Member] \| Maximum [Member]
Asset Acquisition [Line Items]
Purchase price for acquiring machinery and equipment	$ 700

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2024

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, engineering office, and sales office, all located in Reno, Nevada. The leases require annual escalating monthly payments ranging from $118 to $361. On February 2, 2022, the Company entered into a 124-month lease agreement in Reno, Nevada. The lease calls for monthly base rent of $230, $23 of fixed operating expense costs, and estimated monthly property taxes of $21. The monthly base rent and fixed operating expense costs are subject to escalation of 3% and 2.4%, respectively, on an annual basis. A certificate of substantial completion has been issued and the lease commencement date was March 25, 2024. The monthly rent under the lease will begin July 24, 2024.

The following table presents the breakout of the operating leases as of:

	March 31, 2024			December 31, 2023
Operating lease right-of-use assets	$	23,988		$	3,315
Short-term operating lease liabilities		1,682			1,288
Long-term operating lease liabilities		22,763			2,234
Total operating lease liabilities	$	24,445		$	3,522
Weighted average remaining lease term		9.29 years			2.6 years
Weighted average discount rate		7.75	%		5.2	%

Assumptions used in determining our incremental borrowing rate include the Company’s implied credit rating and an estimate of secured borrowing rates based on comparable market data.

At March 31, 2024, the future minimum lease payments under these operating leases are as follows:

Fiscal Years Ending
December 31, 2024⁽¹⁾	$	2,460
December 31, 2025		4,267
December 31, 2026		3,810
December 31, 2027		3,004
December 31, 2028		3,094
Thereafter		19,070
Total lease payments		35,705
Less imputed interest		11,260
Total operating lease liabilities	$	24,445

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2024.

		For The Three Months Ended March 31,
Lease cost	Classification	2024		2023
Operating lease cost	Cost of goods sold	$	350	$	347
Operating lease cost	Research and development		23		22
Operating lease cost	General and administration		270		12
Operating lease cost	Selling and marketing		12		12
Total lease cost		$	655	$	393

All lease costs included in the schedule above are fixed.

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)

Financing Leases

The Company entered into finance lease agreements for equipment to support the Company’s operations. Payments under the finance lease agreements are fixed for a term of 3-5 years. The leased assets are recognized in property plant & equipment.

The following table presents the breakout of the financing leases as of:

SCHEDULE OF BREAKOUT OF FINANCE LEASES

	March 31, 2024			December 31, 2023
Finance lease right-of-use assets	$	99		$	106
Short-term finance lease liabilities		37			36
Long-term finance lease liabilities		56			66
Total finance lease liabilities	$	93		$	102
Weighted average remaining lease term		2.5 years			2.7 years
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 March 31, 2024, the future minimum lease payments under these operating leases are as follows:

Fiscal Years Ending
December 31, 2024⁽¹⁾	$	31
December 31, 2025		41
December 31, 2026		24
December 31, 2027		4
Total lease payments		100
Less imputed interest		7
Total operating lease liabilities	$	93

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2024.

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)

SCHEDULE OF LEASE COST (Details) - USD ($) $ in Thousands		3 Months Ended
SCHEDULE OF LEASE COST (Details) - USD ($) $ in Thousands	Feb. 02, 2022	Mar. 31, 2024	Mar. 31, 2023
Loss Contingencies [Line Items]
Operating lease cost	$ 23	$ 655	$ 393
Cost of Sales [Member]
Loss Contingencies [Line Items]
Operating lease cost		350	347
Research and Development Expense [Member]
Loss Contingencies [Line Items]
Operating lease cost		23	22
General and Administrative Expense [Member]
Loss Contingencies [Line Items]
Operating lease cost		270	12
Selling and Marketing Expense [Member]
Loss Contingencies [Line Items]
Operating lease cost		$ 12	$ 12

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares			3 Months Ended
	Feb. 05, 2024	Feb. 10, 2023	Mar. 31, 2024
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares , beginning balance			47,000
Weighted average fair market value , beginning balance			$ 2.69
Number of shares , beginning balance	220,000	461,998	220,000
Weighted average fair market value , beginning balance			$ 0.43
Number of shares , beginning balance	(100,000)		(104,875)
Weighted average fair market value , beginning balance			$ 2.34
Number of shares , beginning balance			162,125
Weighted average fair market value , beginning balance			$ 0.97

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

SCHEDULE OF NUMBER OF POTENTIAL SHARES OF COMMON STOCK (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	26,987,999	11,034,930
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	24,510,575	10,923,915
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	162,125	111,015
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	2,315,299

SCHEDULE OF BASIC AND DILUTED EARNING (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Net income (loss)	$ (10,367)	$ 4,775
Weighted average number of common shares-basic	60,260,282	45,104,515
Net (Loss) Income per share, basic	$ (0.17)	$ 0.11
Dilutive effect related to stock options and warrants		3,351,481
Weighted average diluted shares outstanding	60,260,282	48,455,996
Net (Loss) Income per share, diluted	$ (0.17)	$ 0.10

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER FINANCE LEASES (Details) - USD ($)
$ in Thousands

Mar. 31, 2024

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

December 31, 2024

^[1]

$ 31

100

Less imputed interest

Total operating lease liabilities

$ 93

$ 102

[1]	Represents scheduled payments for the remaining nine-month period ending December 31, 2024.

STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION

A summary of the Company’s option activity and related information follows:

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (in years)		Aggregate intrinsic value

Balances, January 1, 2024		2,364,787		$	2.69	$	1.57		7.60	$	60
Options granted		-			-		-				-
Options forfeited		(49,488	)		3.11		1.77				-
Options exercised		-			-		-				-
Balances, March 31, 2024		2,315,299		$	2.68	$	1.56		6.42	$	60

At March 31, 2024
Vested and Exercisable		1,651,913		$	2.46				6.34	$	60
Vested and expected to vest		2,315,299		$	2.68				6.42	$	60

SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY

The following table presents the restricted stock units activity for the three months ended March 31, 2024:

	Number of Shares			Weighted-Average Fair Market Value

Unvested shares, January 1, 2024		47,000		$	2.69
Granted and unvested		220,000			0.43
Vested		(104,875	)		2.34
Unvested shares, March 31, 2024		162,125		$	0.97

LONG TERM DEBT

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

LONG TERM DEBT

Note 6 - LONG TERM DEBT

Term Loan Agreement

On October 7, 2022 (the “Closing Date”), 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”) entered into the Term Loan, Guarantee and Security Agreement (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 merger and related transactions 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% per annum (or $937.5 on the first day of each calendar quarter) beginning 24 months after the Closing Date and matures on the fourth anniversary of the Closing Date (“Maturity Date”). The Term Loan accrues interest (i) until April 1, 2023, at a per annum rate equal to the adjusted Secured Overnight Financing Rate (“SOFR”) plus a margin equal to 13.5%, of which 7% will be payable in cash and 6.5% will be paid in kind, (ii) thereafter until October 1, 2024, at a per annum rate equal to adjusted SOFR plus 7% payable in cash plus an amount ranging from 4.5% to 6.5%, depending on the senior leverage ratio of the consolidated company, which will be paid in kind and (iii) at all times thereafter, at a per annum rate equal to adjusted SOFR plus a margin ranging from 11.5% to 13.5% payable in cash, depending on the senior leverage ratio of the consolidated company. In each of the foregoing cases, adjusted SOFR will be no less than 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. The Company is required to prepay the Term Loan based on excess cash flow, as defined in the agreement, beginning with the financial statements for the year ended December 31, 2023.

During the year ended December 31, 2023, the Company prepaid the first four installments of the Term Loan which amounted to $5,275 and pushed back the first principal payment to October 2025.

In connection with the entry into the Term Loan Agreement, 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 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. Refer to Note 9 for further information.

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.

During the three months ended March 31, 2024 and 2023, a total of $3,701 and $3,496, respectively, of interest expense was incurred under the debt. Amortization of the debt issuance costs amounted to $894 and $219, respectively, during the three months ended March 31, 2024 and 2023.

The carrying balance of $21,837 on March 31, 2024 consisted of $69,725 in principal, plus $7,389 PIK interest, less $55,277 in unamortized debt discount related to the debt issuance costs. The carrying balance of $19,683 on December 31, 2023 consisted of $69,725 in principal, plus $6,130 PIK interest, less $56,172 in unamortized debt discount related to the debt issuance costs.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 6 - Long Term Debt (continued)

Term Loan Agreement (continued)

Financial Covenants

The Company is subject to restrictive financial covenants pertaining to Maximum Senior Leverage Ratio, Liquidity, Fixed Charge Coverage Ratio, and Capital Expenditures as defined in the Term Loan Agreement. As of March 31, 2024, the Company was not in compliance with our financial covenants pertaining to the fixed charge coverage ratio, liquidity, and the maximum senior leverage ratio. On March 31, 2024, the Company received a waiver from its Administrative Agent and Term Loan Lenders in regards to its compliance with the liquidity requirement under the Term Loan as of the last day of the quarter ended March 31, 2024. If the Company is unable to obtain a waiver or if the Company is unable to comply with such covenants, the lenders have the right to accelerate the maturity of the Term Loan. Because of this, the entire debt is classified as current instead of long-term debt.

At March 31, 2024, the future debt maturities are as follows:

SCHEDULE OF FUTURE DEBT MATURITIES

For Year Ended December 31,
2024		-
2025		938
2026		78,703
Total		79,641
Less: Estimated interest paid-in-kind		(2,527	)
Total debt		77,114
Less: Unamortized debt issuance costs		(55,277	)
Total carrying amount		21,837
Less: Current portion of debt		(21,837	)
Total long-term debt	$	-

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
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-Paragraph 1B
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Cash flows from Operating Activities
Net (Loss) Income	$ (10,367)	$ 4,775
Adjustments to Reconcile Net (Loss) Income to Net Cash Used in Operating Activities
Stock based compensation	266	4,487
Amortization of debt discount	894	219
Change in fair market value of warrant liability	(236)	(18,523)
Non-cash interest expense (paid-in kind)	1,260	1,238
Provision for credit losses	47	52
Depreciation and amortization	332	297
Amortization of right of use of assets	422	308
Loss on disposal of property and equipment		116
Changes in Assets and Liabilities
Accounts receivable	(655)	(1,577)
Inventory	5,200	(1,966)
Prepaid expenses	(71)	(196)
Prepaid inventory	(87)	299
Other current assets	(591)	(129)
Income taxes payable	174
Accounts payable and accrued expenses	(100)	6,465
Accrued tariffs	87	117
Customer deposits	30	180
Total Adjustments	6,972	(8,613)
Net Cash Used in Operating Activities	(3,395)	(3,838)
Cash Flows From Investing Activities
Purchase of property and equipment	(817)	(589)
Net Cash Used in Investing Activities	(817)	(589)
Cash Flows From Financing Activities
Proceeds from public offering, net		597
Proceeds from note payable, related party	2,700	1,000
Repayment of note payable, related party	(2,700)
Proceeds from exercise of public warrants		747
Proceeds from exercise of options		93
Net Cash Provided by Financing Activities		2,437
Net Decrease in Cash and cash equivalents	(4,212)	(1,990)
Cash and cash equivalents - beginning of period	12,713	17,781	$ 17,781
Cash and cash equivalents - end of period	8,501	15,791	$ 12,713
Supplemental Disclosures of Cash Flow Information:
Cash paid for income taxes
Cash paid for interest	2,390	2,003
Supplemental Non-Cash Items
Purchases of property and equipment, not yet paid	412	352
Recognition of right of use asset obtained in exchange for operating lease liability	21,095
Cashless exercise of liability classified warrants		$ 10,167

STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ in Thousands			3 Months Ended		12 Months Ended
	Feb. 05, 2024	Feb. 10, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense			$ 266	$ 4,487
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Restricted stock units, vested	220,000	461,998	220,000
Restricted stock units, value			$ 3,464
Restricted stock units, vested	100,000		104,875
Restricted Stock Units Unvested [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Restricted stock units, value			$ 95
Restricted Stock Units Vested [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense			$ 45
Common Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock issued in public offering (ATM), net of costs, shares				73,500,000
2022 Stock Incentive Plan [Member] \| Common Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock issued in public offering (ATM), net of costs, shares			2,464,400		1,500,000
Outstanding shares percentage					1.00%
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			10,986,525
Cost of Sales [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense			$ 32	$ 36
Research and Development Expense [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense			65	29
Selling and Marketing Expense [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense			60	856
General and Administrative Expense [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense			$ 109	$ 3,566

ASSET PURCHASE AGREEMENT

3 Months Ended

Mar. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

ASSET PURCHASE AGREEMENT

Note 7 - ASSET PURCHASE AGREEMENT

Thomason Jones Company, LLC

In April 2022, the Company entered into an Asset Purchase Agreement with William Thomason, Richard Jones, and Thomason Jones Company, LLC whereby the Company acquired inventory and intellectual property assets for a price not to exceed $700 cash plus contingent payments of $1,000 each to William Thomason and Richard Jones (the “Earn Out”). The transaction was determined to be a business combination under the guidance in FASB ASC 805: Business Combinations. The Company followed the guidance under ASC 805-10-55 and determined the contingent consideration to be separate from the business combination and the earn out to be recognized as contingent compensation to Mr. Thomason and Mr. Jones as the contingency became probable of being met. The Company concluded the purchase price to be $444 and was allocated in its entirety to inventory.

Pursuant to the terms of the agreement dated April 2022, Dragonfly Energy Corp. agreed to a contingent compensation arrangement with Mr. Thomason and Mr. Jones. According to this agreement, if Dragonfly Energy Corp. realizes $3,000 in gross sales from products sold under the Wakespeed brand or which incorporate any portion of the Purchased Intellectual Property (IP) within twenty-four months of the acquisition, the Company is obligated to pay each of Thomason and Jones $1,000. The Company may satisfy this obligation in cash or by issuing common stock at its discretion.

The Company has determined that this arrangement constitutes compensation for post-acquisition services. Consequently, the Company has recognized this contingent consideration as a compensation expense, measured at its fair value at the acquisition date. The fair value was determined using a probability weighted expected outcome approach, considering the likelihood of reaching the gross sales target.

As of December 31, 2023, the Company has recognized $2,000 of compensation expense in connection with this arrangement. This expense is reflected in the statement of operations under Sales and marketing expense. The total amount has been recognized as compensation expense as of December 31, 2023, since it was deemed earned and no further service performance was required.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Total	$ 12,505	$ 18,791
Sales Channel, Directly to Consumer [Member]
Disaggregation of Revenue [Line Items]
Total	5,203	10,038
Original Equipment Manufacture [Member]
Disaggregation of Revenue [Line Items]
Total	$ 7,302	$ 8,753

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-41

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 32
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 4: http://fasb.org/us-gaap/role/ref/otherTransitionRef
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-42

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-4

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN

Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN

Principles of consolidation

The accompanying unaudited 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 SX. 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 16, 2024 (as amended April 29, 2024, the “Annual Report”) of the Company for the annual period ended December 31, 2023. The consolidated balance sheet as of December 31, 2023 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)

Note 2 – Summary of Significant Accounting Policies (continued)

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 three months ended March 31, 2024 and 2023, the Company incurred losses from operations and had negative cash flow from operations. As of March 31, 2024, the Company had $8,501 in cash and cash equivalents and working capital of $4,168. The Company’s ability to achieve profitability and positive cash flow depends on its ability to increase revenue, contain its expenses and maintain compliance with the financial covenants in its outstanding indebtedness agreements.

In connection with the Company’s senior secured term loan facility in an aggregate principal amount of $75,000 (the “Term Loan”), the Company is obligated to comply with certain financial covenants, which include maintaining a maximum senior leverage ratio, minimum liquidity, a springing fixed charge coverage ratio, and maximum capital expenditures (See Note 6). On March 31, 2024, the Company obtained a waiver from the Term Loan administrative agent and lenders of its failures to satisfy the liquidity requirement under the Term Loan for the quarter ended March 31, 2024. If the Company is unable to obtain a waiver or if the Company is unable to comply with such covenants, the lenders have the right to accelerate the maturity of the Term Loan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

In addition, the Company may need to raise additional debt and/or equity financings to fund its 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 issued accounting pronouncements:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the CODM, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

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)

Cash and Cash Equivalents

The Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. As of March 31, 2024 and December 31, 2023, the Company held no Cash Equivalents.

From time to time the Company has amounts on deposit with financial institutions that exceed federally insured limits. The Company has not experienced any significant losses in such accounts.

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 of the invoice date and the contracts do not have significant financing components. Trade accounts receivables are recorded gross and are net of any applicable allowance. The allowance for credit losses as of March 31, 2024 and December 31, 2023 were not material.

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 established 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. The inventory reserve as of March 31, 2024 and December 31, 2023 is immaterial.

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. The Company utilizes the use of estimates in its calculations for the reserve for obsolete or slow moving inventory, right of use assets, warrant liability, equity based compensation, and income taxes.

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 days after shipment. In such instances, the Company records a customer deposit liability. The Company recognizes these contract liabilities as sales after the revenue criteria are met. As of March 31, 2024 and December 31, 2023, the contract liability related to the Company’s customer deposits are $231 and $201, respectively.

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 (Continued)

The Company recognized $134 of the contract liability as of December 31, 2023 during the three months ended March 31, 2024. The Company recognized $211 of the contract liability as of December 31, 2022 during the three months ended March 31, 2023.

Disaggregation of Revenue

The following table present our disaggregated revenues by distribution channel:

	2024		2023
	For the Three Months Ended
	March 31
	2024		2023
Sales
Direct to Customer		5,203		10,038
Original equipment manufacturer		7,302		8,753
Total	$	12,505	$	18,791

During the year ended December 31, 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.

Product Warranty

The Company offers assurance type warranties from 5 to 10 years on its products. The Company estimates the costs associated with the warranty obligation using historical data of warranty claims and costs incurred to satisfy those claims. The Company estimates, based upon a review of historical warranty claim experience, the costs that may be incurred under its warranties and record a liability in the amount of such estimate at the time a product is sold. Factors that affect our warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of our recorded warranty liability and adjust the accrual as claims data and historical experience warrants. The Company has assessed the costs of fulfilling its existing assurance type warranties and has determined that the estimated outstanding warranty obligation at March 31, 2024 and December 31, 2023 to be $414 and $307, respectively.

SCHEDULE OF WARRANTY OBLIGATION

	March 31, 2024			December 31, 2023
Beginning warranty obligation		307			328
Provision of warranty expense		197			397
Settlement of warranty claims		(90	)		(418	)
Ending warranty obligation	$	414		$	307

Concentrations

As of March 31, 2024, receivables from Customer A, Customer B and Customer C comprised approximately 22%, 14% and 12%, respectively, of accounts receivable. As of December 31, 2023, receivables from Customer D and Customer E comprised approximately 28% and 10%, respectively, of accounts receivable.

For the three months ended March 31, 2024, sales from Customer A accounted for approximately 16% of the Company’s total revenue. For the three months ended March 31, 2023, sales from Customer B accounted for approximately 26% of the Company’s total revenue.

As of March 31, 2024, payables to Vendor A comprised approximately 60% of accounts payables. As of December 31, 2023, payables to Vendor A comprised approximately 65% of accounts payables.

For the three months ended March 31, 2024, Vendor A accounted for approximately 12% of the Company’s total purchases. For the three months ended March 31, 2023, Vendor B and Vendor C accounted for approximately 38% and 10%, respectively, of the Company’s total purchases.

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)

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 options (Note 11). The fair value method requires the Company to estimate the fair value of stock based payment awards to employees and non employees on the date of grant using an option pricing model. Stock based compensation costs are based on the fair value of the underlying option calculated using the Black Scholes option pricing model and recognized as expense on a straight line basis over the requisite service period, which is the vesting period. Restricted stock unit awards are valued based on the closing trading value of the Company’s common stock on the date of grant and then amortized on a straight-line basis over the requisite service period of the award. The Company measures equity based compensation awards granted to non employees at fair value as the awards vest and recognizes the resulting value as compensation expense at each financial reporting period.

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 $91 as of March 31, 2024, and December 31, 2023, respectively, of uncertain tax positions.

The Company’s accounting policy is to include penalties and interest related to income taxes if any, in selling, general and administrative expenses. The Company regularly assesses the need to record a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Net (Loss) Income per Common Share

Basic net (loss) income per share is calculated by dividing net (loss) earnings by the weighted-average number of common shares outstanding during the period. Diluted net (loss) income per share is calculated using the weighted-average number of common shares outstanding during the period and, if dilutive, the weighted-average number of potential shares of common stock.

The weighted-average number of common shares included in the computation of diluted net (loss) income gives effect to all potentially dilutive common equivalent shares, including outstanding stock options and warrants.

Common stock equivalent shares are excluded from the computation of diluted net (loss) income per share if their effect is antidilutive. In periods in which the Company reports a net loss, diluted net loss per share is generally the same as basic net loss per share since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement including the use of an identified asset(s) and the Company’s control over the use of that identified asset. The Company elected, as allowed under FASB ASU 2016-02, Leases (“ASC 842”), to not recognize leases with a lease term of one year or less on its balance sheet. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (“ROU”) assets and current and non-current lease liabilities, as applicable.

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 operating segment.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation in the condensed consolidated financial statements and these accompanying notes. The reclassifications did not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures. The impact on any prior period disclosures was immaterial.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw material	$ 26,995	$ 31,604
Finished goods	6,583	7,174
Total inventory	$ 33,578	$ 38,778

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands		3 Months Ended
	Feb. 02, 2022	Mar. 31, 2024	Mar. 31, 2023
Loss Contingencies [Line Items]
Monthly base rent	$ 230
Operating lease costs	23	$ 655	$ 393
Estimated monthly property taxes	$ 21
Percentage of escalation of monthly base rent	3.00%
Percentage of escalation of fix operating expense costs	2.40%
Minimum [Member]
Loss Contingencies [Line Items]
Lease payments		$ 118
Finance lease term		3 years
Maximum [Member]
Loss Contingencies [Line Items]
Lease payments		$ 361
Finance lease term		5 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL

The following table present our disaggregated revenues by distribution channel:

	2024		2023
	For the Three Months Ended
	March 31
	2024		2023
Sales
Direct to Customer		5,203		10,038
Original equipment manufacturer		7,302		8,753
Total	$	12,505	$	18,791

SCHEDULE OF WARRANTY OBLIGATION

	March 31, 2024			December 31, 2023
Beginning warranty obligation		307			328
Provision of warranty expense		197			397
Settlement of warranty claims		(90	)		(418	)
Ending warranty obligation	$	414		$	307

REVISIONS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2024

Accounting Changes and Error Corrections [Abstract]

REVISIONS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Note 14 - REVISIONS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company has revised the previously issued financial statements for the quarter ended March 31, 2023 for the underpayment of tariffs to U.S. Customs and Border Protection (“CBP”) related to the improper classification and valuation of certain of the products used in its batteries. The Company has reported the underpayment to CBP. The underpayment of tariffs was primarily the result of utilizing an improper tariff rate. The additional amount of the tariffs was allocated between inventory and cost of goods sold based on the status of imported items (i.e. included in the inventories held vs included in the inventories already sold to customers).

In accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the materiality of the error from qualitative and quantitative perspectives, and concluded that the error was immaterial to any prior annual or interim financial statements. Notwithstanding this conclusion, management has revised the accompanying condensed consolidated financial statements for the quarter ended March 31, 2023 and related notes included herein to correct this error for the financial statements for the quarter ended March 31, 2023 presented.

The following tables present the effect of correcting this error on the Company’s previously issued financial statements.

Consolidated Statements of Operations	As previously reported			Adjustment			As revised
	For the Period Ended March 31, 2023
Consolidated Statements of Operations	As previously reported			Adjustment			As revised
Cost of Goods Sold		14,048			76			14,124
Gross Profit		4,743			(76	)		4,667
Loss From Operations		(9,816	)		(76	)		(9,892	)
Interest Expense		(3,815	)		(41	)		(3,856	)
Income Before Taxes		4,892			(117	)		4,775
Net Income		4,892			(117	)		4,775
Net Income per share - Basic		(0.11	)		(0.0	)		(0.11	)
Net Income per share – Diluted		(0.10	)		(0.0	)		(0.10	)

For the Period Ended March 31, 2023

Consolidated Statements of Cash Flows

As previously reported

Adjustment

As revised

Net Income

4,892

(117

)

4,775

Change in Accrued Tariffs

117

Consolidated Statements of Stockholders’ Equity	As previously reported			Adjustment			As revised
	For the Period Ended March 31, 2023
Consolidated Statements of Stockholders’ Equity	As previously reported			Adjustment			As revised
Accumulated Deficit - January 1, 2023		(27,133	)		(589	)		(27,722	)
Net Income		4,892			(117	)		4,775
Accumulated Deficit - March 31, 2023		(22,241	)		(706	)		(22,947	)

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

REVISIONS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Changes and Error Corrections [Abstract]

SCHEDULE OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The following tables present the effect of correcting this error on the Company’s previously issued financial statements.

Consolidated Statements of Operations	As previously reported			Adjustment			As revised
	For the Period Ended March 31, 2023
Consolidated Statements of Operations	As previously reported			Adjustment			As revised
Cost of Goods Sold		14,048			76			14,124
Gross Profit		4,743			(76	)		4,667
Loss From Operations		(9,816	)		(76	)		(9,892	)
Interest Expense		(3,815	)		(41	)		(3,856	)
Income Before Taxes		4,892			(117	)		4,775
Net Income		4,892			(117	)		4,775
Net Income per share - Basic		(0.11	)		(0.0	)		(0.11	)
Net Income per share – Diluted		(0.10	)		(0.0	)		(0.10	)

For the Period Ended March 31, 2023

Consolidated Statements of Cash Flows

As previously reported

Adjustment

As revised

Net Income

4,892

(117

)

4,775

Change in Accrued Tariffs

117

Consolidated Statements of Stockholders’ Equity	As previously reported			Adjustment			As revised
	For the Period Ended March 31, 2023
Consolidated Statements of Stockholders’ Equity	As previously reported			Adjustment			As revised
Accumulated Deficit - January 1, 2023		(27,133	)		(589	)		(27,722	)
Net Income		4,892			(117	)		4,775
Accumulated Deficit - March 31, 2023		(22,241	)		(706	)		(22,947	)

INVENTORY

3 Months Ended

Mar. 31, 2024

Inventory Disclosure [Abstract]

INVENTORY

Note 4 - INVENTORY

Inventory consists of the following:

SCHEDULE OF INVENTORY

	March 31, 2024		December 31, 2023
Raw material	$	26,995	$	31,604
Finished goods		6,583		7,174
Total inventory	$	33,578	$	38,778

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

SCHEDULE OF BREAKOUT OF FINANCE LEASES (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Finance lease right-of-use assets	$ 99	$ 106
Short-term finance lease liabilities	37	36
Long-term finance lease liabilities	56	66
Total finance lease liabilities	$ 93	$ 102
Weighted average remaining lease term	2 years 6 months	2 years 8 months 12 days
Weighted average discount rate	5.20%	5.20%

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Net Sales	$ 12,505	$ 18,791
Cost of Goods Sold	9,454	14,124
Gross Profit	3,051	4,667
Operating Expenses
Research and development	1,333	880
General and administrative	4,813	9,495
Selling and marketing	2,744	4,184
Total Operating Expenses	8,890	14,559
Loss From Operations	(5,839)	(9,892)
Other Income (Expense)
Interest expense, net	(4,760)	(3,856)
Other expense	(4)
Change in fair market value of warrant liability	236	18,523
Total Other Income (Expense)	(4,528)	14,667
Net (Loss) Income Before Taxes	(10,367)	4,775
Income Tax (Benefit) Expense
Net (Loss) Income	$ (10,367)	$ 4,775
Net (loss) income Per Share- Basic	$ (0.17)	$ 0.11
Net (loss) income Per Share- Diluted	$ (0.17)	$ 0.10
Weighted Average Number of Shares - Basic	60,260,282	45,104,515
Weighted Average Number of Shares - Diluted	60,260,282	48,455,996

SCHEDULE OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Jan. 01, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of Goods Sold	$ 3,000	$ 9,454	$ 14,124
Gross Profit		3,051	4,667
Loss From Operations		(5,839)	(9,892)
Interest Expense		(4,760)	(3,856)
Income Before Taxes		(10,367)	4,775
Net income (loss)		$ (10,367)	$ 4,775
Net Income per share - Basic		$ 0.17	$ (0.11)
Net Income per share – Diluted		$ 0.17	$ (0.10)
Change in Accrued Tariffs			$ 117
Retained Earnings		$ (51,906)	(22,947)	$ (41,539)	$ (27,722)
Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of Goods Sold			14,048
Gross Profit			4,743
Loss From Operations			(9,816)
Interest Expense			(3,815)
Income Before Taxes			4,892
Net income (loss)			$ 4,892
Net Income per share - Basic			$ (0.11)
Net Income per share – Diluted			$ (0.10)
Change in Accrued Tariffs
Retained Earnings			(22,241)		(27,133)
Revision of Prior Period, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cost of Goods Sold			76
Gross Profit			(76)
Loss From Operations			(76)
Interest Expense			(41)
Income Before Taxes			(117)
Net income (loss)			$ (117)
Net Income per share - Basic			$ (0.0)
Net Income per share – Diluted			$ (0.0)
Change in Accrued Tariffs			$ 117
Retained Earnings			$ (706)		$ (589)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Principles of consolidation

Principles of consolidation

Basis of presentation

Basis of presentation

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)

Going Concern

Going Concern

Recently issued accounting pronouncements

Recently issued accounting pronouncements:

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)

Cash and Cash Equivalents

Cash and Cash Equivalents

From time to time the Company has amounts on deposit with financial institutions that exceed federally insured limits. The Company has not experienced any significant losses in such accounts.

Accounts Receivable

Accounts Receivable

Inventory

Inventory

Use of Estimates

Use of Estimates

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

Revenue Recognition

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 (Continued)

Disaggregation of Revenue

Disaggregation of Revenue

The following table present our disaggregated revenues by distribution channel:

	2024		2023
	For the Three Months Ended
	March 31
	2024		2023
Sales
Direct to Customer		5,203		10,038
Original equipment manufacturer		7,302		8,753
Total	$	12,505	$	18,791

Product Warranty

Product Warranty

SCHEDULE OF WARRANTY OBLIGATION

	March 31, 2024			December 31, 2023
Beginning warranty obligation		307			328
Provision of warranty expense		197			397
Settlement of warranty claims		(90	)		(418	)
Ending warranty obligation	$	414		$	307

Concentrations

Concentrations

As of March 31, 2024, payables to Vendor A comprised approximately 60% of accounts payables. As of December 31, 2023, payables to Vendor A comprised approximately 65% of accounts payables.

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)

Stock-Based Compensation

Stock-Based Compensation

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

Income Taxes

Net (Loss) Income per Common Share

Net (Loss) Income per Common Share

Leases

Leases

Segment Reporting

Segment Reporting

Reclassifications

Reclassifications

(LOSS) INCOME PER SHARE

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

(LOSS) INCOME PER SHARE

Note 13 - (LOSS) INCOME PER SHARE

(Loss) Income per Common Share

The following table sets forth the information needed to compute basic and diluted net (loss) income per share for the three months ended March 31, 2024 and 2023:

	March 31, 2024			March 31, 2023
Basic Net (Loss) Income per common share:
Net (Loss) Income	$	(10,367	)	$	4,775
Weighted average number of common shares-basic		60,260,282			45,104,515
Net (Loss) Income per share, basic	$	(0.17	)	$	0.11

Diluted Net (Loss) Income per common share:
Net (Loss) Income available to common stockholders	$	(10,367	)	$	4,775
Weighted average number of common shares-basic		60,260,282			45,104,515
Dilutive effect related to stock options and warrants		-			3,351,481
Weighted average diluted shares outstanding		60,260,282			48,455,996
Net (Loss) Income per share, diluted	$	(0.17	)	$	0.10

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:

	March 31, 2024		March 31, 2023
Warrants		24,510,575		10,923,915
Restricted stock units		162,125		111,015
Options		2,315,299		-
Weighted average number of common shares-basic		26,987,999		11,034,930

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES (Details) - USD ($)
$ in Thousands

Mar. 31, 2024

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

December 31, 2024

^[1]

$ 2,460

4,267

3,810

3,004

3,094

19,070

35,705

Less imputed interest

11,260

Total operating lease liabilities

$ 24,445

$ 3,522

[1]	Represents scheduled payments for the remaining nine-month period ending December 31, 2024.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Product Information [Line Items]
Cash and cash equivalents	$ 8,501,000
Working capital	4,168,000
Restricted cash	0		$ 0
Customer deposits	231,000		201,000
Contract liability recognized	134,000	$ 211,000	134,000	$ 211,000
Warranty obilgation outstanding	414,000		307,000	$ 328,000
Uncertain tax positions	$ 91,000		$ 91,000
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer A [Member]
Product Information [Line Items]
Concentration risk, percentage	22.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer B [Member]
Product Information [Line Items]
Concentration risk, percentage	14.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer C [Member]
Product Information [Line Items]
Concentration risk, percentage	12.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer D [Member]
Product Information [Line Items]
Concentration risk, percentage			28.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer E [Member]
Product Information [Line Items]
Concentration risk, percentage			10.00%
Revenue from Contract with Customer Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer A [Member]
Product Information [Line Items]
Concentration risk, percentage	16.00%
Revenue from Contract with Customer Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer B [Member]
Product Information [Line Items]
Concentration risk, percentage		26.00%
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor A [Member]
Product Information [Line Items]
Concentration risk, percentage	60.00%
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor B [Member]
Product Information [Line Items]
Concentration risk, percentage			65.00%
Total Purchases [Member] \| Supplier Concentration Risk [Member] \| Vendor A [Member]
Product Information [Line Items]
Concentration risk, percentage	12.00%
Total Purchases [Member] \| Supplier Concentration Risk [Member] \| Vendor B [Member]
Product Information [Line Items]
Concentration risk, percentage		38.00%
Total Purchases [Member] \| Supplier Concentration Risk [Member] \| Vendor C [Member]
Product Information [Line Items]
Concentration risk, percentage		10.00%
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	$ 75,000,000

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2024

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 March 31, 2024:

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of March 31, 2024
Liabilities
Warrant liability- Term Loan	$	1,010	$	1,010	$	-	$	-	$	1,010
Warrant liability- June Public Offering		3,214		3,214		-		-		3,214
Warrant liability- Private Placement Warrants		3		3		-		3		-
Total liabilities	$	4,227	$	4,227	$	-	$	3	$	4,224

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 December 31, 2023:

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of December 31, 2023
Liabilities
Warrant liability- Term Loan	$	1,014	$	1,014	$	-	$	-	$	1,014
Warrant liability- June Public Offering		3,434		3,434		-		-		3,434
Warrant liability- Private placement warrants		15		15		-		15		-
Total liabilities	$	4,463	$	4,463	$	-	$	15	$	4,448

The carrying amounts of accounts receivable and accounts payable are considered level 1 and approximate fair value as of March 31, 2024 and December 31, 2023 because of the relatively short maturity of these instruments.

The carrying value of the term loan as of March 31, 2024 and December 31, 2023 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.

Level 3 Roll forward

Fair value measurements categorized within Level 3 are sensitive to changes in assumptions or methodology used to determine fair value, and such changes could result in a significant increase or decrease in the fair value.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

The changes for Level 3 items measured at fair value on recurring basis using significant unobservable inputs are as follows:

	Warrant Liability - Term Loan			Warrant liability- June Public Offering
Fair value as of January 1, 2024	$	1,014		$	3,434
Warrant exercises
Change in fair value, gain included in net loss⁽¹⁾		(4	)		(220	)
Fair value as of March 31, 2024	$	1,010		$	3,214

	Warrant Liability - Term Loan
Fair value as of January 1, 2023	$	30,841
Warrant exercises		(8,822	)
Change in fair value, gain included in net loss⁽¹⁾		(17,998	)
Fair value as of March 31, 2023	$	4,021

⁽¹⁾	Changes in fair value of warrant liabilities are disclosed separately in the Condensed Consolidated Statements of Operations

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

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-Topic 820
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

WARRANTS (Tables)

3 Months Ended

Mar. 31, 2024

Warrants

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 March 31, 2024			As of December 31, 2023
Common stock price	$	0.54		$	0.54
Exercise price		0.01			0.01
Dividend yield		0	%		0	%
Term		8.52 -9.75			10
Volatility		96.00	%		96.00	%
Risk-free rate		4.20	%		3.90	%
Fair value	$	0.54		$	0.54

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 March 31, 2024			As of December 31, 2023
Common stock price	$	0.54		$	0.54
Exercise price	$	2.00		$	2.00
Dividend yield		0	%		0	%
Term		4.23			4.48
Volatility		104.00	%		106.00	%
Risk-free rate		4.30	%		3.90	%
Fair value	$	0.29		$	0.31

SCHEDULE OF ROLL FORWARD IN WARRANTS

Term Loan Warrants:

	Common Stock Warrants
Warrants Outstanding, January 1, 2024		1,884,510
Exercise of warrants		-
Warrants issued		-
Warrants Outstanding, March 31, 2024		1,884,510

Investor Warrants:

	Common Stock Warrants
Warrants Outstanding, January 1, 2023		11,131,900
Warrants Outstanding, Beginning		11,131,900
Issuance of warrants		-
Exercise of warrants		-
Warrants outstanding, March 31, 2024		11,131,900
Warrants outstanding, Ending		11,131,900

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

Note 11 - STOCK-BASED COMPENSATION

Share-based compensation expense for options and RSUs totaling $266 and $4,487 was recognized in the Company’s consolidated statements of operations for the three months ended March 31, 2024 and 2023, respectively. Of the $266 of share-based compensation incurred during the three months ended March 31, 2024, $32 is allocated to cost of goods sold, $65 to research and development, $60 to selling and marketing, and $109 to general and administrative expenses. Of the $4,487 of share-based compensation incurred during the three months ended March 31, 2023, $36 is allocated to cost of goods sold, $29 to research and development, $856 to selling and marketing, and $3,566 to general and administrative expenses.

The Company maintains an Employee Stock Purchase Plan (“ESPP”) which is designed to allow eligible employees and the eligible employees of our participating subsidiaries to purchase shares of our common stock, at semi-annual intervals, with their accumulated payroll deductions. A total of 2,464,400 shares of the Company’s common stock will initially be available for issuance under the ESPP. The share limit will automatically increase on the first trading day in January of each year by an amount equal to lesser of (1) 1% of the total number of outstanding shares of our common stock on December 31 in the prior year, (2) 1,500,000 shares, or (3) such number as determined by the Company’s board of directors.

A summary of the Company’s option activity and related information follows:

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (in years)		Aggregate intrinsic value

Balances, January 1, 2024		2,364,787		$	2.69	$	1.57		7.60	$	60
Options granted		-			-		-				-
Options forfeited		(49,488	)		3.11		1.77				-
Options exercised		-			-		-				-
Balances, March 31, 2024		2,315,299		$	2.68	$	1.56		6.42	$	60

At March 31, 2024
Vested and Exercisable		1,651,913		$	2.46				6.34	$	60
Vested and expected to vest		2,315,299		$	2.68				6.42	$	60

Restricted Stock Units

On February 10, 2023, the Company granted 461,998 restricted stock units under the 2022 plan which vest immediately. The fair value of the restricted stock units on the date of grant was $3,464 and was recorded as compensation expense during the three months ended March 31, 2023. On February 5, 2024, the Company granted 220,000 restricted stock units of which 100,000 vested immediately. The fair value of the 220,000 restricted stock units was $95 and an expense of $45 was recorded as compensation expense during the three months ended March 31, 2024.

The following table presents the restricted stock units activity for the three months ended March 31, 2024:

	Number of Shares			Weighted-Average Fair Market Value

Unvested shares, January 1, 2024		47,000		$	2.69
Granted and unvested		220,000			0.43
Vested		(104,875	)		2.34
Unvested shares, March 31, 2024		162,125		$	0.97

As of March 31, 2024, there were 10,986,525 shares of unissued authorized and available for future awards under the 2022 Equity Incentive Plan and Employee Stock Purchase Plan.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 8,501	$ 12,713
Accounts receivable, net of allowance for credit losses	2,247	1,639
Inventory	33,578	38,778
Prepaid expenses	843	772
Prepaid inventory	1,468	1,381
Prepaid income tax	345	519
Other current assets	709	118
Total Current Assets	47,691	55,920
Property and Equipment
Machinery and equipment	17,847	16,714
Office furniture and equipment	319	319
Leasehold improvements	1,727	1,727
Vehicle	33	33
Total	19,926	18,793
Less accumulated depreciation and amortization	(3,156)	(2,824)
Property and Equipment, Net	16,770	15,969
Operating lease right of use asset, net	23,988	3,315
Total Assets	88,449	75,204
Current Liabilities
Accounts payable	9,550	10,258
Accrued payroll and other liabilities	8,295	7,107
Accrued tariffs	1,800	1,713
Customer deposits	231	201
Uncertain tax position liability	91	91
Notes payable, current portion, net of debt issuance costs	21,837	19,683
Operating lease liability, current portion	1,682	1,288
Financing lease liability, current portion	37	36
Total Current Liabilities	43,523	40,377
Long-Term Liabilities
Warrant liabilities	4,227	4,463
Accrued expenses-long term	69	152
Operating lease liability, net of current portion	22,763	2,234
Financing lease liability, net of current portion	56	66
Total Long-Term Liabilities	27,115	6,915
Total Liabilities	70,638	47,292
Commitments and Contingencies (See Note 5)
Stockholders’ Equity
Preferred stock, 5,000,000 shares at $0.0001 par value, authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Common stock, 250,000,000 shares at $0.0001 par value, authorized, 60,260,282 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	6	6
Additional paid in capital	69,711	69,445
Accumulated deficit	(51,906)	(41,539)
Total Stockholders’ Equity	17,811	27,912
Total Liabilities and Stockholders’ Equity	$ 88,449	$ 75,204

SUPPLIER AGREEMENT

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

SUPPLIER AGREEMENT

Note 12 - SUPPLIER AGREEMENT

On May 9, 2023, Ioneer Rhyolite Ridge LLC, or the seller, an emerging lithium-boron producer, and the Company announced a commercial offtake agreement partnership whereby the seller is developing the Rhyolite Ridge Project which, once completed, is expected to produce 20 ktpa of lithium carbonate, and 174 ktpa of boic acid (the “project”). Beginning on the Supply Start Date which is the date the seller notifies the Company that the project is fully completed and commissioned in accordance with the engineering, procurement and construction contract, and for the duration of the supply period, the Company shall purchase and receive product from seller, on the terms and conditions of the agreement. The agreement calls for a minimum annual purchase requirement. The agreement becomes effective when the seller has informed the Company that the seller has made a positive financial investment decision in respect of the project.

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 4	$ 38,461	$ (27,722)	$ 10,743
Balance, shares at Dec. 31, 2022	43,272,728
Net income (loss)			4,775	4,775
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 stock options		93		93
Exercise of stock options, shares	36,009
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
Stock compensation expense		4,487		4,487
Balance at Mar. 31, 2023	$ 5	54,551	(22,947)	31,609
Balance, shares at Mar. 31, 2023	45,795,502
Balance at Dec. 31, 2022	$ 4	38,461	(27,722)	10,743
Balance, shares at Dec. 31, 2022	43,272,728
Balance at Dec. 31, 2023	$ 6	69,445	(41,539)	27,912
Balance, shares at Dec. 31, 2023	60,260,282
Net income (loss)			(10,367)	$ (10,367)
Exercise of stock options, shares
Exercise of public warrants, shares				0
Stock compensation expense		266		$ 266
Balance at Mar. 31, 2024	$ 6	$ 69,711	$ (51,906)	$ 17,811
Balance, shares at Mar. 31, 2024	60,260,282

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 13, 2024
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
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		60,509,476
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

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SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Beginning Balance	2,364,787
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance	$ 2.69
Share-Based Compensation Arrangement by Share-Based Payment Award, Option, Nonvested, Weighted Average Exercise Price, Beginning Balance	$ 1.57
Weighted- Average Remaining Contractual Life (in years)			7 years 7 months 6 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value	$ 60
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Granted in Period, Intrinsic Value
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period	(49,488)
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price	$ 3.11
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Nonvested Options Forfeited, Weighted Average Grant Date Fair Value	$ 1.77
[custom:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period, Intrinsic Value
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending Balance	2,315,299	3,731,392	2,364,787
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 2.68		$ 2.69
Share-Based Compensation Arrangement by Share-Based Payment Award, Option, Nonvested, Weighted Average Exercise Price, Ending Balance	$ 1.56		$ 1.57
Weighted- Average Remaining Contractual Life (in years)	6 years 5 months 1 day
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value	$ 60		$ 60
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number	1,651,913
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price	$ 2.46
Weighted- Average Remaining Contractual Life (in years), Vested and Exercisable	6 years 4 months 2 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value	$ 60
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	2,315,299
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	$ 2.68
Weighted- Average Remaining Contractual Life (in years), Vested and expected to vest	6 years 5 months 1 day
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	$ 60

LONG TERM DEBT (Details Narrative) - USD ($)		3 Months Ended		12 Months Ended
LONG TERM DEBT (Details Narrative) - USD ($)	Oct. 07, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Oct. 10, 2022
Debt Instrument [Line Items]
Long term debt		$ 77,114,000
Paid in kind interest		1,260,000	$ 1,238,000
Unamortized debt discount		$ 55,277,000
Penny Warrants [Member]
Debt Instrument [Line Items]
Warrants to purchase shares		2,593,056
Warrants 10 [Member]
Debt Instrument [Line Items]
Warrants to purchase shares		1,600,000			457,142
Share price		$ 10
Term Loan Agreement [Member]
Debt Instrument [Line Items]
Prepayment of debt installment				$ 5,275,000
Term Loan Agreement [Member] \| Senior Notes [Member]
Debt Instrument [Line Items]
Interest expense debt, excluding amortization		$ 3,701,000	3,496,000
Amortization of debt issuance costs		894,000	$ 219,000
Long term debt		21,837,000		19,683,000
Loan principal amount		69,725,000		69,725,000
Paid in kind interest		7,389,000		6,130,000
Unamortized debt discount		$ 55,277,000		$ 56,172,000
Term Loan Agreement [Member] \| Penny Warrants [Member]
Debt Instrument [Line Items]
Warrants to purchase shares		2,593,056
Term Loan Agreement [Member] \| Warrants 10 [Member]
Debt Instrument [Line Items]
Warrants to purchase shares		1,600,000
Share price		$ 10
Senior Secured Term Loan Facility [Member] \| Term Loan Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, amortization percentage	5.00%
Debt instrument, amortization amount	$ 937,500
Debt instrument, amortization period	24 months
Basis spread on variable rate	13.50%
Senior Secured Term Loan Facility [Member] \| Term Loan Agreement [Member] \| Until April 1 2023 [Member]
Debt Instrument [Line Items]
Variable rate, payable in cash	7.00%
Variable rate, payable in kind	6.50%
Senior Secured Term Loan Facility [Member] \| Term Loan Agreement [Member] \| After April 1, 2023 Until October 1, 2024 [Member]
Debt Instrument [Line Items]
Variable rate, payable in cash	7.00%
Senior Secured Term Loan Facility [Member] \| Term Loan Agreement [Member] \| After April 1, 2023 Until October 1, 2024 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Variable rate, payable in cash	11.50%
Variable rate, payable in kind	4.50%
Senior Secured Term Loan Facility [Member] \| Term Loan Agreement [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%

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

SCHEDULE OF BREAKOUT OF OPERATING LEASES

The following table presents the breakout of the operating leases as of:

	March 31, 2024			December 31, 2023
Operating lease right-of-use assets	$	23,988		$	3,315
Short-term operating lease liabilities		1,682			1,288
Long-term operating lease liabilities		22,763			2,234
Total operating lease liabilities	$	24,445		$	3,522
Weighted average remaining lease term		9.29 years			2.6 years
Weighted average discount rate		7.75	%		5.2	%

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES

At March 31, 2024, the future minimum lease payments under these operating leases are as follows:

Fiscal Years Ending
December 31, 2024⁽¹⁾	$	2,460
December 31, 2025		4,267
December 31, 2026		3,810
December 31, 2027		3,004
December 31, 2028		3,094
Thereafter		19,070
Total lease payments		35,705
Less imputed interest		11,260
Total operating lease liabilities	$	24,445

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2024.

SCHEDULE OF LEASE COST

		For The Three Months Ended March 31,
Lease cost	Classification	2024		2023
Operating lease cost	Cost of goods sold	$	350	$	347
Operating lease cost	Research and development		23		22
Operating lease cost	General and administration		270		12
Operating lease cost	Selling and marketing		12		12
Total lease cost		$	655	$	393

SCHEDULE OF BREAKOUT OF FINANCE LEASES

The following table presents the breakout of the financing leases as of:

SCHEDULE OF BREAKOUT OF FINANCE LEASES

	March 31, 2024			December 31, 2023
Finance lease right-of-use assets	$	99		$	106
Short-term finance lease liabilities		37			36
Long-term finance lease liabilities		56			66
Total finance lease liabilities	$	93		$	102
Weighted average remaining lease term		2.5 years			2.7 years
Weighted average discount rate		5.2	%		5.2	%

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER FINANCE LEASES

At March 31, 2024, the future minimum lease payments under these operating leases are as follows:

Fiscal Years Ending
December 31, 2024⁽¹⁾	$	31
December 31, 2025		41
December 31, 2026		24
December 31, 2027		4
Total lease payments		100
Less imputed interest		7
Total operating lease liabilities	$	93

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2024.

SCHEDULE OF ROLL FORWARD IN WARRANTS (Details)	3 Months Ended
SCHEDULE OF ROLL FORWARD IN WARRANTS (Details)	Mar. 31, 2024 shares
Warrants outstanding, Ending	24,510,575
Term Loan Warrants [Member]
Warrants Outstanding, Beginning	1,884,510
Exercise of warrants
Issuance of warrants
Warrants outstanding, Ending	1,884,510
Investor Warrants [Member]
Warrants Outstanding, Beginning	11,131,900
Exercise of warrants
Issuance of warrants
Warrants outstanding, Ending	11,131,900

SCHEDULE OF FUTURE DEBT MATURITIES (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Debt Disclosure [Abstract]
2024
2025	938
2026	78,703
Total	79,641
Less: Estimated interest paid-in-kind	(2,527)
Total debt	77,114
Less: Unamortized debt issuance costs	(55,277)
Total carrying amount	21,837
Less: Current portion of debt	(21,837)
Total long-term debt

COMMON STOCK

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

COMMON STOCK

Note 10 - COMMON STOCK

No dividends on common stock had been declared by the Company.

For the three months ended March 31, 2024 and 2023, the Company had reserved shares of common stock for issuance as follows:

	March 31, 2024		March 31, 2023
Options issued and outstanding		2,315,299		3,731,392
Common stock outstanding		60,260,282		45,795,502
Warrants outstanding		24,510,575		12,266,971
Earnout shares		40,000,000		40,000,000
Shares available for future issuance		10,986,525		4,319,309
Total		138,072,681		106,113,174

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 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 million, pursuant to the terms of the Purchase Agreement. In addition, the Company appointed LifeSci Capital, LLC as “qualified independent underwriter” with respect to the transactions contemplated by the Purchase Agreement. Under the terms of the Purchase Agreement, the Company issued 73,500 shares pursuant to the Purchase Agreement with CCM LLC for aggregate net proceeds to the Company of $597 from the period January 1, 2023 through March 31, 2023. No issuances have occurred for the period of January 1, 2024 through March 31, 2024.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478448/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 16
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-16

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

+ Details

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Note 15 - SUBSEQUENT EVENTS

On April 17, 2024, the Company issued 3,428 shares in exchange for 4,875 vested RSU’s less shares deducted to cover taxes. On April 24, 2024, the Company issued 244,774 shares in connection with its Employee Stock Purchase Plan for a total consideration of approximately $112. On April 30, 2024, the Company issued 992 shares as a result of exercised stock options upon the receipt of proceeds of approximately $1.

On April 12, 2024 the Company entered into a lease agreement, pursuant to which the Company agreed to lease an approximately 64 square foot facility (the “Premises”) located in Fernley, Nevada, to be used for general, warehousing, assembly/light manufacturing, painting of products, storage fulfillment, distribution of the Company’s products, and other uses as permitted under the Fernley Lease Agreement (the “Fernley Lease Agreement”). The initial term of the Fernley Lease Agreement (the “Term”) is for a period of sixty (60) months, effective April 1, 2024. The base rent for the Premises, payable monthly, is $45 for the first twelve months of the Term and is subject to a three percent (3.0%) increase on the anniversary of each year. The Company also will be responsible for twenty-five percent (25%) of any operating expenses, taxes and insurance expenses incurred by the Landlord in connection with the building in which the Premises are located (the “Expenses”) as well as utility expenses. The Expenses are subject to recalculation and increase upon the completion of the Initial Improvements (as defined in the Fernley Lease Agreement). The Landlord is responsible for completing the Initial Improvements. The Fernley Lease Agreement also contains customary default provisions allowing the Landlord to terminate the Fernley Lease Agreement if the Company fails to cure certain breaches of its obligations under the Fernley Lease Agreement within a specified period of time upon written notice to the Company. Concurrent with the execution of the Fernley Lease Agreement, the Company paid the Landlord a security deposit of $50.

Effective April 12, 2024, the Company entered into amendments to the employment agreements with its Chief Executive Officer, its Chief Revenue Officer and its Chief Marketing Officer to amend the terms of their annual equity compensation (the “Amended Employee Agreements”). The Amended Employee Agreements allow the Company to issue a combination of cash and equity awards on an annual basis up to a specified amount ($1,532 for the Chief Executive Officer, $490 for the Chief Revenue Officer and $236 for the Chief Marketing Officer), subject to approval and such other terms and conditions imposed by the compensation committee of the board of directors.

On April 12, 2024, the Company issued a total of 836,295 RSUs to the following employees: (i) 567,407 RSUs to the Chief Executive Officer; (ii) 181,481 RSUs to the Chief Revenue Officer; and (iii) 87,407 RSUs to the Chief Marketing Officer. Each of the RSUs granted will vest in three equal annual installments, with the first vesting date on the one (1) year anniversary of the date of issuance and the following two vesting dates on each subsequent anniversary of the date of issuance, subject to each employees’ continued employment as of each vesting date. In addition to the RSU awards, the Board also approved the following cash awards to the above referenced employees: (i) $511 to the Chief Executive Officer; (ii) $163 to the Chief Revenue Officer; and (iii) $79 to the Chief Marketing Officer. Each of the approved cash awards will not be paid out to the employees until the Company has achieved a minimum cash balance of $30,000, and are subject to each employee’s continued employment on the date of payment.

On April 12, 2024, the board of directors authorized the issuance of 222,222 RSUs to each director in connection with their service as directors for the year ended December 31, 2023. The RSUs will vest in three equal annual installments, with the first vesting date on the one (1) year anniversary date of their issuance, subject to the directors continued service on with the Company on each vesting date.

On April 15, 2024, the board of directors approved an amendment to the Company’s Director Compensation Policy offering its directors long-term incentive awards that are issuable subject to the sole discretion of the Company’s compensation committee. Each such long-term incentive award is payable in the form of cash and or equity awards. Each such award shall be determined each fiscal year and are subject to the director’s continued service with the Company and other conditions as the Company’s compensation committee deems appropriate. Where equity awards are issued, such awards are subject to the terms and conditions of the Dragonfly Energy Holdings Corp. 2022 Equity Incentive Plan.

On April 29, 2024, the Company obtained a waiver from the Term Loan administrative agent and lenders in regard to the Company’s compliance with the liquidity requirement under the Term Loan as of the last day of the fiscal month ended April 30, 2024.

On May 13, 2024, the Company received a waiver from its Administrative Agent and Term Loan Lenders (the “May 2024 Waiver”) in regards to its compliance with the to satisfy the Senior Leverage Ratio and Fixed Charge Coverage Ratio tests (the “Tests”) as of the last day of the quarter ended March 31, 2024 from the Term Loan Lenders in regards to its compliance with the Tests as of the last day of the quarter ended March 31, 2024. The May 2024 Waiver provided for a one-time issuance of penny warrants (the “May 2024 Penny Warrants”) to purchase up to 2,550,000 shares of the Company’s common stock, par value $0.0001 per share (the “May 2024 Penny Warrant Shares”), at an exercise price of $0.01 per share, in connection with the Term Loan Lenders’ agreement to waive the Tests under the Term Loan for the quarter ended March 31, 2024. The May 2024 Penny Warrants were immediately exercisable upon issuance and will expire ten years from the date of issuance.

(LOSS) INCOME PER SHARE (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

SCHEDULE OF BASIC AND DILUTED EARNING (LOSS) PER SHARE

	March 31, 2024			March 31, 2023
Basic Net (Loss) Income per common share:
Net (Loss) Income	$	(10,367	)	$	4,775
Weighted average number of common shares-basic		60,260,282			45,104,515
Net (Loss) Income per share, basic	$	(0.17	)	$	0.11

Diluted Net (Loss) Income per common share:
Net (Loss) Income available to common stockholders	$	(10,367	)	$	4,775
Weighted average number of common shares-basic		60,260,282			45,104,515
Dilutive effect related to stock options and warrants		-			3,351,481
Weighted average diluted shares outstanding		60,260,282			48,455,996
Net (Loss) Income per share, diluted	$	(0.17	)	$	0.10

SCHEDULE OF NUMBER OF POTENTIAL SHARES OF COMMON STOCK

	March 31, 2024		March 31, 2023
Warrants		24,510,575		10,923,915
Restricted stock units		162,125		111,015
Options		2,315,299		-
Weighted average number of common shares-basic		26,987,999		11,034,930

SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE (Details) - shares	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Equity [Abstract]
Options issued and outstanding	2,315,299	2,364,787	3,731,392
Common stock outstanding	60,260,282	60,260,282	45,795,502
Warrants outstanding	24,510,575		12,266,971
Earnout shares	40,000,000		40,000,000
Shares available for future issuance	10,986,525		4,319,309
Total	138,072,681		106,113,174

INVENTORY (Tables)

3 Months Ended

Mar. 31, 2024

Inventory Disclosure [Abstract]

SCHEDULE OF INVENTORY

Inventory consists of the following:

SCHEDULE OF INVENTORY

	March 31, 2024		December 31, 2023
Raw material	$	26,995	$	31,604
Finished goods		6,583		7,174
Total inventory	$	33,578	$	38,778

COMMON STOCK (Details Narrative) - Purchase Agreement [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares issue		73,500
Aggregate net proceeds		$ 597
Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Aggregated purchase price	$ 150,000

WARRANTS

3 Months Ended

Mar. 31, 2024

Warrants

WARRANTS

Note 9 - WARRANTS

Common Stock Warrants classified as Equity

Public Warrants

The Company’s Public Warrants are classified as equity as of March 31, 2024 and March 31, 2023 there were 9,487,500 Public Warrants issued and outstanding.

During the three months ended March 31, 2024, no public warrants were exercised.

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 year ended December 31, 2023, private placement warrant holders exercised 3,126,472 warrants on a cashless basis, with the Company agreeing to issue 1,100,000 shares of Common Stock in connection with such exercise. There were 1,501,386 private warrants outstanding as of March 31, 2024 and December 31, 2023, respectively. The Company accounts for the Private Warrants issued in connection with the Initial Public Offering in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the private warrants do not meet the criteria for equity treatment thereunder, each private warrant must be recorded as a liability. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities will be adjusted to its current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date.

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 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. During the year ended December 31, 2023, Penny Warrant holders exercised 2,000,000 warrants on a cashless basis, with the Company agreeing to issue 1,996,323 shares of Common Stock in connection with such exercise. During the year ended December 31, 2023 the Company issued additional Penny Warrants to purchase 4,783 shares of Common Stock to the Term Loan Lenders in accordance with the anti-dilution provisions of the penny warrants with respect to certain sales made by the Company under the ChEF Equity Facility. In addition, pursuant to the Company’s limited waiver agreement on December 29, 2023 between the Company and the lenders and lending agent, the Company agreed to issue to the lenders additional penny warrants exercisable to purchase an aggregate 1,286,671 shares of its Common Stock. The Company concluded the Penny Warrants are not considered indexed to the Company’s Common Stock and to be accounted for as liabilities under ASC 815. As such, the estimated fair value is recognized as a liability each reporting period, with changes in the fair value recognized within income each period. There were no Term Loan Warrants outstanding prior to the merger.

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 March 31, 2024			As of December 31, 2023
Common stock price	$	0.54		$	0.54
Exercise price		0.01			0.01
Dividend yield		0	%		0	%
Term		8.52 -9.75			10
Volatility		96.00	%		96.00	%
Risk-free rate		4.20	%		3.90	%
Fair value	$	0.54		$	0.54

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 March 31, 2024			As of December 31, 2023
Common stock price	$	0.54		$	0.54
Exercise price	$	2.00		$	2.00
Dividend yield		0	%		0	%
Term		4.23			4.48
Volatility		104.00	%		106.00	%
Risk-free rate		4.30	%		3.90	%
Fair value	$	0.29		$	0.31

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 9 - Warrants (continued)

SCHEDULE OF ROLL FORWARD IN WARRANTS

Term Loan Warrants:

	Common Stock Warrants
Warrants Outstanding, January 1, 2024		1,884,510
Exercise of warrants		-
Warrants issued		-
Warrants Outstanding, March 31, 2024		1,884,510

Investor Warrants:

	Common Stock Warrants
Warrants Outstanding, January 1, 2023		11,131,900
Warrants Outstanding, Beginning		11,131,900
Issuance of warrants		-
Exercise of warrants		-
Warrants outstanding, March 31, 2024		11,131,900
Warrants outstanding, Ending		11,131,900

SCHEDULE OF WARRANTY OBLIGATION (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Beginning warranty obligation	$ 307	$ 328
Provision of warranty expense	197	397
Settlement of warranty claims	(90)	(418)
Ending warranty obligation	$ 414	$ 307

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
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
Common stock, shares authorized	250,000,000	250,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares issued	60,260,282	60,260,282
Common stock, shares outstanding	60,260,282	60,260,282

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (10,367)	$ 4,775

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

RELATED PARTY

3 Months Ended

Mar. 31, 2024

RELATED PARTY

Note 8 - RELATED PARTY

On October 25, 2022, the Company entered into a separation and release of claims agreement with its 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 which is included in general and administrative expenses in the statements of operations, payments equivalent to $1,000 divided into 24 monthly payments commencing on December 1, 2022, and all outstanding equity-based compensation awards to become fully vested and exercisable. The COO shall have 12 months from the termination date to exercise outstanding options. The twelve (12) month period ended on November 7, 2023 in which the COO exercised 100,000 options and 76,316 options expired.

In February 2023, the Company entered into an agreement with its former COO in which the COO waived their rights to a transaction bonus resulting from the merger transaction in lieu of a Company van. The Company accounted for the cost of the van as an employee bonus, resulting in $116 of general and administrative expense for the prior year.

On March 5, 2023, the Company entered into a convertible promissory note (the “Note”) with a board member in the amount of $1,000, or the Principal Amount. Upon execution of the Note and funding of the original principal sum, a payment of $100 (the “Loan Fee”) was fully earned as of the date of the Note and was due and payable in full in cash on April 4, 2023. The Company paid the Principal Amount and the Loan Fee on April 1, 2023 and April 4, 2023, respectively.

On April 26, 2023, the Company entered into a separation and release of claims agreement with its former Chief Legal Officer (“CLO”). As consideration for the CLO’s execution of the agreement, the Company agreed to pay the employee payments equivalent to $720 divided into 24 monthly payments commencing on June 1, 2023, and all outstanding equity based compensation awards to become fully vested and exercisable at an expense of $76. The CLO shall have 3 months from the termination date to exercise outstanding options. The three (3) month period ended on July 26, 2023 in which the options were not exercised and the options were forfeited as a result.

On January 26, 2024 the Company entered into a convertible promissory note (the “January Note”) with a board member in the amount of $1,000, or the January Principal Amount. Upon execution of the January Note and funding of the original principal sum, a payment of $50 (the “January Loan Fee”) was fully earned as of the date of the January Note and was due and payable in full in cash on February 2, 2024. The Company paid the January Principal Amount and the January Loan Fee on February 1, 2024.

On February 27, 2024 the Company entered into a convertible promissory note (the “February Note”) with a board member in the amount of $1,700, or the February Principal Amount. Upon execution of the February Note and funding of the original principal sum, a payment of $85 (the “February Loan Fee”) was fully earned as of the date of the February Note and was due and payable in full in cash on March 1, 2024. The Company paid the February Principal Amount and the February Loan Fee on March 1, 2024.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
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+ Details

SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 4,227	$ 4,463
Fair Value	4,227	4,463
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	3	15
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	4,224	4,448
Term Loan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	1,010	1,014
Fair Value	1,010	1,014
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	1,010	1,014
June Public Offering [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	3,214	3,434
Fair Value	3,214	3,434
June Public Offering [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value
June Public Offering [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value
June Public Offering [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	3,214	3,434
Private Placement Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	3	15
Fair Value	3	15
Private Placement Warrants [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value
Private Placement Warrants [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	3	15
Private Placement Warrants [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value