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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. On October 7, 2022, a merger transaction between Chardan NexTech Acquisition 2 Corporation (“CNTQ”), Dragonfly Energy Corp. (“Legacy Dragonfly”), and Bronco Merger Sub, Inc. (“Merger Sub”) was completed pursuant to which Merger Sub was merged with and into Legacy Dragonfly, with Legacy Dragonfly surviving the merger. As a result of the merger, Legacy Dragonfly became a wholly owned subsidiary of New Dragonfly. Although New Dragonfly was the legal acquirer of Legacy Dragonfly in the merger, Legacy Dragonfly is deemed to be the accounting acquirer, and the historical financial statements of Legacy Dragonfly became the basis for the historical financial statements of New Dragonfly upon the closing of the merger. New Dragonfly together with its wholly owned subsidiary, Dragonfly Energy Corp., is referred to hereinafter as the “Company”. Furthermore, the historical financial statements of Legacy Dragonfly became the historical financial statements of the Company upon the consummation of the merger. As a result, the financial statements included in this Annual Report reflect (i) the historical operating results of Legacy Dragonfly prior to the merger; (ii) the combined results of CNTQ and Legacy Dragonfly following the close of the merger; (iii) the assets and liabilities of Legacy Dragonfly at their historical cost and (iv) the Legacy Dragonfly’s equity structure for all periods presented, as affected by the recapitalization presentation after completion of the merger. See Note 3 – Reverse Capitalization for further details of the merger.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with generally accepted 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. Going Concern The accompanying 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 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. For the year ended December 31, 2022, the Company incurred losses and had a negative cash flow from operations. As of December 31, 2022, the Company had $17,781 in cash and cash equivalents and working capital of $32,923. 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 $<span id="xdx_902_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20221231__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--LongtermDebtTypeAxis__custom--TermLoanMember_zn5tNqsAUJVd" title="Loan amount">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 7). On March 29, 2023, the Company obtained a waiver from the Term Loan administrative agent and lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarter ended March 31, 2023. It is probable that the Company will fail to meet these covenants within the next twelve months. 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 and strategic plans and meet its financial covenants. The Company has historically been able to raise additional capital through issuance of equity and/or debt financings and the Company intends to use its equity facility and raise additional capital as needed. However, the Company cannot guarantee that it will be able to raise additional equity, contain expenses, or increase revenue, and comply with the financial covenants under the Term Loan. Recently adopted accounting standards In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt Modifications and Extinguishments (Subtopic 470 50), Compensation – Stock Based Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options. This ASU provides guidance which clarified an issuer’s accounting for modification or exchanges of freestanding equity classified written call options that remain equity classified after modification or exchange. The provisions of ASU No. 2021-04 are effective January 1, 2022. This ASU shall be applied on a prospective basis. The adoption of this guidance did not have a material impact on the accompanying consolidated financial statements. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Recently issued accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments in this update will be effective for the Company on January 1, 2024 and may be early adopted at the beginning of fiscal year 2023. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Cash, Restricted 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. There were no cash equivalents as of December 31, 2022 or 2021. The Company also maintained a restricted cash balance to satisfy its note payable requirements as of December 31, 2021 (Refer to Note 7). There were no restricted cash balances as of December 31, 2022. 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, nor does management believe it is exposed to any significant credit risk. 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 30-60 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 Company has an allowance for doubtful accounts as of December 31, 2022 and 2021 of $90 and $50, respectively. Inventory Inventories (Note 5), 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. As of December 31, 2022 and 2021, no such reserves were necessary. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Property and Equipment Property and equipment are stated at cost, including the cost of significant improvements and renovations. Costs of routine repairs and maintenance are charged to expense as incurred. Depreciation and amortization are calculated by the straight-line method over the estimated useful lives for owned property, or, for leasehold improvements, over the shorter of the asset’s useful life or term of the lease. Depreciation expense for the years ended December 31, 2022 and 2021 was $891 and $617, respectively. The various classes of property and equipment and estimated useful lives are as follows: SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 50%">Office furniture and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 50%"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zhnptitFDuod" title="Estimated useful life (in years)">3 to <span id="xdx_90D_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zWiESJ5BmtF9" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Machinery and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_zGq1cj4OHyG4" title="Estimated useful life (in years)">3 to <span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zUFrG3TvEl6h" title="Estimated useful life (in years)">7 years </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Leasehold improvements</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span id="xdx_90F_ecustom--PropertyAndEquipmentEstimatedUsefulLives_c20220101__20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_zxJM5PpG3bf" title="Estimated useful lives">Remaining Term of Lease</td></tr> </table> Use of Estimates The preparation of financial statements in conformity with 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. Impairment of Long-Lived Assets The Company evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of these asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. When indications of impairment are present and the estimated undiscounted future cash flows from the use of these assets is less than the assets’ carrying value, the related assets will be written down to fair value. There were no impairments of the Company’s long-lived assets for the periods presented. Warrants The Company applies relevant accounting guidance for warrants to purchase the Company’s stock based on the nature of the relationship with the counterparty. For warrants issued to investors or lenders in exchange for cash or other financial assets, the Company follows guidance issued within ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”), to assist in the determination of whether the warrants should be classified as liabilities or equity. Warrants that are determined to require liability classification are measured at fair value upon issuance and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings. Warrants that are determined to require equity classification are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. 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. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company excludes from the transaction price all taxes that are assessed by a governmental authority and imposed on and concurrent with the Company’s revenue transactions, and therefore presents these taxes (such as sales tax) on a net basis in operating revenues on the Consolidated Statements of Operations. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 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 due within <span id="xdx_906_ecustom--PaymentTermForDistributorsAndOriginalEquipmentManufacturers_dtD_c20220101__20221231__srt--RangeAxis__srt--MinimumMember_zFfzqIwgaoN2" title="Payment term for distributors and OEMs">30-60 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. The company had $1,779 of contract liabilities as of January 1, 2021. As of December 31, 2022 and 2021, the contract liability related to the Company’s customer deposits approximated $238 and $434, respectively. The entire contract liability balance as of December 31, 2021 was recognized as revenue during the year ended December 31, 2022. The entire contract liability balance as of January 1, 2021 was recognized as revenue during the year ended December 31, 2021. Disaggregation of Revenue: The following table present our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif">Sales</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20220101__20221231_zlAN1Civ0pWk" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20210101__20211231_zNMsDDa8xWGg" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelDirectlyToConsumerMember_zs2XTmWiENzl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%">Retail</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">43,344</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">59,042</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelThroughIntermediaryMember_zYgUtOSvhD51" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Distributor</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,102</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">10,733</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__custom--OriginalEquipmentManufactureMember_z658Tu8h0oxk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Original equipment manufacture</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">33,805</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,225</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_ziYtehi44X5a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,251</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">78,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zDKwxR24SU82" style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total sales</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,251</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">78,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Shipping and Handling Shipping and handling fees paid by customers are recorded within net sales, with the related expenses recorded in cost of sales. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses. Shipping and handling costs associated with outbound freight totaled $5,440 and $5,105 for the years ended December 31, 2022 and 2021, respectively. 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 and records 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. We periodically assess 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 on December 31, 2022 and 2021 to be $328 and $0, respectively. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Concentrations Receivables from three customers comprised approximately <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zcmEDrucG7N5" title="Concentration risk, percentage">18%, <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_zR1ezrCReRm4" title="Concentration risk, percentage">10% and <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerThreeMember_ziHbMJoXZJD8" title="Concentration risk, percentage">10%, respectively, of accounts receivable as of December 31, 2022. Receivables from two customers comprised approximately <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zW7QRNtmUmMl" title="Concentration risk, percentage">42% and <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_zuTz7w0B1SNc" title="Concentration risk, percentage">16%, respectively, of accounts receivable as of December 31, 2021. There are no other significant accounts receivable concentrations. Revenue from <span id="xdx_909_ecustom--NumberOfVendors_pid_dc_uCustomer_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--RevenueFromContractWithCustomerMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zoPUDRQlU9S4" title="Number of vendors">one customer accounted for approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--RevenueFromContractWithCustomerMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_z3xSmmMqtvGi" title="Concentration risk, percentage">22% of the Company’s sales for year ended December 31, 2022. There were no significant revenue concentrations for the year ended December 31, 2021. Payables to <span id="xdx_90D_ecustom--NumberOfCustomers_pid_dc_uCustomer_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zLkbJiid9UIg" title="Number of vendors">one vendor comprised approximately <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorMember_zt1aLFeO1zzg" title="Concentration risk, percentage">61% of accounts payables as of December 31, 2022. There were no significant payable concentrations as of December 31, 2021. For the year ended December 31, 2022, <span id="xdx_90E_ecustom--NumberOfVendors_pid_dc_uVendor_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zddxmBRB72Ml" title="Number of vendors">one vendor accounted for approximately <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorOneMember_z0uE7yMXn0Zi" title="Concentration risk, percentage">28% of the Company’s total purchases, respectively. For the year ended December 31, 2021, <span id="xdx_908_ecustom--NumberOfVendors_pid_dc_uVendor_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zkJ63z313U9a" title="Number of vendors">three vendors accounted for approximately <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorOneMember_zM2EZZSCRJ6h" title="Concentration risk, percentage">27%, <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorTwoMember_zjJU83iiSNtf" title="Concentration risk, percentage">10% and <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorThreeMember_zEhhW3mwrWTl" title="Concentration risk, percentage">10% of the Company’s total purchases, respectively. Deferred Financing Costs The incremental cost, including the fair value of warrants, directly associated with obtaining debt financing is capitalized as deferred financing costs upon the issuance of the debt and amortized over the term of the related debt agreement using the effective-interest method with such amortized amounts included as a component of interest expense in the consolidated statement of operations. Unamortized deferred financing costs are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt obligation. Research and Development The Company expenses research and development costs as incurred. Research and development expenses include salaries, contractor and consultant fees, supplies and materials, as well as costs related to other overhead such as depreciation, facilities, utilities, and other departmental expenses. The costs we incur with respect to internally developed technology and engineering services are included in research and development expenses as incurred as they do not directly relate to acquisition or construction of materials, property or intangible assets that have alternative future uses. Advertising The Company expenses advertising costs as they are incurred and are included in selling and marketing expenses. Advertising expenses amounted to $2,334 and $1,690 for the years ended December 31, 2022 and 2021, respectively. 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 14). 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 CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Income Taxes Deferred income tax assets and liabilities (Note 9) are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has a liability of $128 and $0 as of December 31, 2022 and 2021, 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. We regularly assess 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) Earnings per Common Share Basic net (loss) earnings per share is calculated by dividing net (loss) earnings by the weighted-average number of common shares outstanding during the period. Diluted net (loss) earnings 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) earnings 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) earnings 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. As the Merger has been accounted for as a reverse recapitalization, the consolidated financial statements of the merged entity reflect the continuation of the pre-merger Legacy Dragonfly financial statements; Dragonfly equity has been retroactively adjusted to the earliest period presented to reflect the legal capital of the legal acquirer, CNTQ. As a result, net (loss) earnings per share was also retrospectively adjusted for periods ended prior to the Merger. See Note 3 - Reverse Capitalization for details and discussion of the retrospective adjustment of net loss per share. 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 Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“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. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with generally accepted 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.

Going Concern The accompanying 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 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. For the year ended December 31, 2022, the Company incurred losses and had a negative cash flow from operations. As of December 31, 2022, the Company had $17,781 in cash and cash equivalents and working capital of $32,923. 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 $<span id="xdx_902_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20221231__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--LongtermDebtTypeAxis__custom--TermLoanMember_zn5tNqsAUJVd" title="Loan amount">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 7). On March 29, 2023, the Company obtained a waiver from the Term Loan administrative agent and lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarter ended March 31, 2023. It is probable that the Company will fail to meet these covenants within the next twelve months. 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 and 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.

17781000

32923000

75000000

Recently adopted accounting standards In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt Modifications and Extinguishments (Subtopic 470 50), Compensation – Stock Based Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options. This ASU provides guidance which clarified an issuer’s accounting for modification or exchanges of freestanding equity classified written call options that remain equity classified after modification or exchange. The provisions of ASU No. 2021-04 are effective January 1, 2022. This ASU shall be applied on a prospective basis. The adoption of this guidance did not have a material impact on the accompanying consolidated financial statements. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Recently issued accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments in this update will be effective for the Company on January 1, 2024 and may be early adopted at the beginning of fiscal year 2023. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Cash, Restricted 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. There were no cash equivalents as of December 31, 2022 or 2021. The Company also maintained a restricted cash balance to satisfy its note payable requirements as of December 31, 2021 (Refer to Note 7). There were no restricted cash balances as of December 31, 2022. 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, nor does management believe it is exposed to any significant credit risk.

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 30-60 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 Company has an allowance for doubtful accounts as of December 31, 2022 and 2021 of $90 and $50, respectively.

30-60 days

90000

50000

Inventory Inventories (Note 5), 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. As of December 31, 2022 and 2021, no such reserves were necessary. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Property and Equipment Property and equipment are stated at cost, including the cost of significant improvements and renovations. Costs of routine repairs and maintenance are charged to expense as incurred. Depreciation and amortization are calculated by the straight-line method over the estimated useful lives for owned property, or, for leasehold improvements, over the shorter of the asset’s useful life or term of the lease. Depreciation expense for the years ended December 31, 2022 and 2021 was $891 and $617, respectively. The various classes of property and equipment and estimated useful lives are as follows: SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 50%">Office furniture and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 50%"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zhnptitFDuod" title="Estimated useful life (in years)">3 to <span id="xdx_90D_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zWiESJ5BmtF9" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Machinery and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_zGq1cj4OHyG4" title="Estimated useful life (in years)">3 to <span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zUFrG3TvEl6h" title="Estimated useful life (in years)">7 years </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Leasehold improvements</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span id="xdx_90F_ecustom--PropertyAndEquipmentEstimatedUsefulLives_c20220101__20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_zxJM5PpG3bf" title="Estimated useful lives">Remaining Term of Lease</td></tr> </table>

891000

617000

SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 50%">Office furniture and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 50%"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zhnptitFDuod" title="Estimated useful life (in years)">3 to <span id="xdx_90D_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zWiESJ5BmtF9" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Machinery and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_zGq1cj4OHyG4" title="Estimated useful life (in years)">3 to <span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zUFrG3TvEl6h" title="Estimated useful life (in years)">7 years </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> </td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">Leasehold improvements</td> <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span id="xdx_90F_ecustom--PropertyAndEquipmentEstimatedUsefulLives_c20220101__20221231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_zxJM5PpG3bf" title="Estimated useful lives">Remaining Term of Lease</td></tr> </table>

P3Y

P7Y

P5Y

P3Y

P7Y

Remaining Term of Lease

Use of Estimates The preparation of financial statements in conformity with 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.

Impairment of Long-Lived Assets The Company evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of these asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. When indications of impairment are present and the estimated undiscounted future cash flows from the use of these assets is less than the assets’ carrying value, the related assets will be written down to fair value. There were no impairments of the Company’s long-lived assets for the periods presented.

Warrants The Company applies relevant accounting guidance for warrants to purchase the Company’s stock based on the nature of the relationship with the counterparty. For warrants issued to investors or lenders in exchange for cash or other financial assets, the Company follows guidance issued within ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”), to assist in the determination of whether the warrants should be classified as liabilities or equity. Warrants that are determined to require liability classification are measured at fair value upon issuance and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings. Warrants that are determined to require equity classification are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified.

Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

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. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company excludes from the transaction price all taxes that are assessed by a governmental authority and imposed on and concurrent with the Company’s revenue transactions, and therefore presents these taxes (such as sales tax) on a net basis in operating revenues on the Consolidated Statements of Operations. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 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 due within <span id="xdx_906_ecustom--PaymentTermForDistributorsAndOriginalEquipmentManufacturers_dtD_c20220101__20221231__srt--RangeAxis__srt--MinimumMember_zFfzqIwgaoN2" title="Payment term for distributors and OEMs">30-60 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. The company had $1,779 of contract liabilities as of January 1, 2021. As of December 31, 2022 and 2021, the contract liability related to the Company’s customer deposits approximated $238 and $434, respectively. The entire contract liability balance as of December 31, 2021 was recognized as revenue during the year ended December 31, 2022. The entire contract liability balance as of January 1, 2021 was recognized as revenue during the year ended December 31, 2021.

P30D P60D

1779000

238000

434000

Disaggregation of Revenue: The following table present our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif">Sales</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20220101__20221231_zlAN1Civ0pWk" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20210101__20211231_zNMsDDa8xWGg" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelDirectlyToConsumerMember_zs2XTmWiENzl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%">Retail</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">43,344</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">59,042</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelThroughIntermediaryMember_zYgUtOSvhD51" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Distributor</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,102</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">10,733</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__custom--OriginalEquipmentManufactureMember_z658Tu8h0oxk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Original equipment manufacture</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">33,805</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,225</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_ziYtehi44X5a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,251</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">78,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zDKwxR24SU82" style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total sales</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,251</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">78,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

The following table present our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif">Sales</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20220101__20221231_zlAN1Civ0pWk" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20210101__20211231_zNMsDDa8xWGg" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelDirectlyToConsumerMember_zs2XTmWiENzl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%">Retail</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">43,344</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">59,042</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelThroughIntermediaryMember_zYgUtOSvhD51" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Distributor</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,102</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">10,733</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__custom--OriginalEquipmentManufactureMember_z658Tu8h0oxk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Original equipment manufacture</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">33,805</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,225</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_ziYtehi44X5a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,251</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">78,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zDKwxR24SU82" style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total sales</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,251</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">78,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

43344000

59042000

9102000

10733000

33805000

8225000

86251000

78000000

86251000

78000000

Shipping and Handling Shipping and handling fees paid by customers are recorded within net sales, with the related expenses recorded in cost of sales. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses. Shipping and handling costs associated with outbound freight totaled $5,440 and $5,105 for the years ended December 31, 2022 and 2021, respectively. 5440000 5105000 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 and records 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. We periodically assess 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 on December 31, 2022 and 2021 to be $328 and $0, respectively. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) P5Y P10Y

328000

Concentrations Receivables from three customers comprised approximately <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zcmEDrucG7N5" title="Concentration risk, percentage">18%, <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_zR1ezrCReRm4" title="Concentration risk, percentage">10% and <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerThreeMember_ziHbMJoXZJD8" title="Concentration risk, percentage">10%, respectively, of accounts receivable as of December 31, 2022. Receivables from two customers comprised approximately <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zW7QRNtmUmMl" title="Concentration risk, percentage">42% and <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_zuTz7w0B1SNc" title="Concentration risk, percentage">16%, respectively, of accounts receivable as of December 31, 2021. There are no other significant accounts receivable concentrations. Revenue from <span id="xdx_909_ecustom--NumberOfVendors_pid_dc_uCustomer_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--RevenueFromContractWithCustomerMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zoPUDRQlU9S4" title="Number of vendors">one customer accounted for approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--RevenueFromContractWithCustomerMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_z3xSmmMqtvGi" title="Concentration risk, percentage">22% of the Company’s sales for year ended December 31, 2022. There were no significant revenue concentrations for the year ended December 31, 2021. Payables to <span id="xdx_90D_ecustom--NumberOfCustomers_pid_dc_uCustomer_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zLkbJiid9UIg" title="Number of vendors">one vendor comprised approximately <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorMember_zt1aLFeO1zzg" title="Concentration risk, percentage">61% of accounts payables as of December 31, 2022. There were no significant payable concentrations as of December 31, 2021. For the year ended December 31, 2022, <span id="xdx_90E_ecustom--NumberOfVendors_pid_dc_uVendor_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zddxmBRB72Ml" title="Number of vendors">one vendor accounted for approximately <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorOneMember_z0uE7yMXn0Zi" title="Concentration risk, percentage">28% of the Company’s total purchases, respectively. For the year ended December 31, 2021, <span id="xdx_908_ecustom--NumberOfVendors_pid_dc_uVendor_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zkJ63z313U9a" title="Number of vendors">three vendors accounted for approximately <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorOneMember_zM2EZZSCRJ6h" title="Concentration risk, percentage">27%, <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorTwoMember_zjJU83iiSNtf" title="Concentration risk, percentage">10% and <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_c20210101__20211231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorThreeMember_zEhhW3mwrWTl" title="Concentration risk, percentage">10% of the Company’s total purchases, respectively.

0.18

0.10

0.42

0.16

0.22

0.61

0.28

0.27

0.10

Deferred Financing Costs The incremental cost, including the fair value of warrants, directly associated with obtaining debt financing is capitalized as deferred financing costs upon the issuance of the debt and amortized over the term of the related debt agreement using the effective-interest method with such amortized amounts included as a component of interest expense in the consolidated statement of operations. Unamortized deferred financing costs are presented on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt obligation.

Research and Development The Company expenses research and development costs as incurred. Research and development expenses include salaries, contractor and consultant fees, supplies and materials, as well as costs related to other overhead such as depreciation, facilities, utilities, and other departmental expenses. The costs we incur with respect to internally developed technology and engineering services are included in research and development expenses as incurred as they do not directly relate to acquisition or construction of materials, property or intangible assets that have alternative future uses.

Advertising The Company expenses advertising costs as they are incurred and are included in selling and marketing expenses. Advertising expenses amounted to $2,334 and $1,690 for the years ended December 31, 2022 and 2021, respectively.

2334000

1690000

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 14). 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.

Income Taxes Deferred income tax assets and liabilities (Note 9) are determined based on the estimated future tax effects of net operating loss, credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company recognizes a tax benefit for an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has a liability of $128 and $0 as of December 31, 2022 and 2021, 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. We regularly assess 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.

128000

Net (Loss) Earnings per Common Share Basic net (loss) earnings per share is calculated by dividing net (loss) earnings by the weighted-average number of common shares outstanding during the period. Diluted net (loss) earnings 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) earnings 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) earnings 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. As the Merger has been accounted for as a reverse recapitalization, the consolidated financial statements of the merged entity reflect the continuation of the pre-merger Legacy Dragonfly financial statements; Dragonfly equity has been retroactively adjusted to the earliest period presented to reflect the legal capital of the legal acquirer, CNTQ. As a result, net (loss) earnings per share was also retrospectively adjusted for periods ended prior to the Merger. See Note 3 - Reverse Capitalization for details and discussion of the retrospective adjustment of net loss per share.

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 Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“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. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Note 3 – REVERSE CAPITALIZATION On October 7, 2022, Legacy Dragonfly consummated a merger with CNTQ. Legacy Dragonfly was deemed to be the accounting acquirer in the merger. The determination was primarily based on Legacy Dragonfly’s stockholders having a majority of the voting power in the combined Company, Legacy Dragonfly having the ability to appoint a majority of the Board of Directors of the Company, Legacy Dragonfly’s existing management team comprising the senior management of the combined Company, Legacy Dragonfly comprising the ongoing operations of the combined Company and the combined Company assumed the name “Dragonfly Energy Holdings Corp.”. Accordingly, for accounting purposes, the merger was treated as the equivalent of Legacy Dragonfly issuing stock for the net assets of CNTQ, accompanied by a recapitalization. The net assets of CNTQ are stated at historical cost, with no goodwill or other intangible assets recorded. In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparable periods up to October 7, 2022, to reflect the number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy Dragonfly’s stockholders in connection with the merger. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Dragonfly’s outstanding convertible preferred stock and Legacy Dragonfly’s common stock prior to the merger have been retroactively restated as shares reflecting the exchange ratio of 1.182 established in the merger. Legacy Dragonfly’s convertible preferred stock previously classified as temporary equity was retroactively adjusted, converted into common stock and reclassified to permanent equity as a result of the reverse recapitalization. Immediately before the closing of the merger, and prior to the PIPE Financing, and the funds remaining after such redemptions, totaling approximately $6,265, became available to finance transaction expenses and the future operations of New Dragonfly. In connection with the merger, CNTQ entered into agreements with new investors and existing Legacy Dragonfly investors to subscribe and purchase an aggregate of approximately 500,000 shares of CNTQ Class A common stock (the “PIPE Financing”). The PIPE Financing was consummated on September 26, 2022 and resulted in gross proceeds of an additional approximately $5,017, prior to payment of the transaction costs. As part of the PIPE Financing, the Company entered an initial Term Loan for an aggregate principal amount of $75,000. The Company incurred debt issuance costs of $1,950 of original issuance discount and additional $2,081 of transaction costs that were allocated to the Term Loan, resulting in net cash proceeds of $70,969. In addition, $52,956 of Term Loan warrants based on their combined relative fair values was recorded as a debt discount resulting in initial carrying amount of debt of $18,013. Pursuant to the terms of the loan agreement, the Term Loan was advanced in one tranche on the closing date and the funds were used to refinance on the closing date prior indebtedness of $42,492 (including payment of make-whole interest related to early extinguishment of debt), (ii) to support the Transaction under the Merger Agreement, (iii) for working capital purposes and other corporate purposes, and (iv) to pay any fees associated with transactions contemplated under the Term Loan Agreement and the other loan documents entered into in connection therewith, including the transactions described in the foregoing clauses (i) and (ii) and fees and expenses related to the merger. The direct and incremental transaction costs of approximately $13,221 were allocated to all instruments assumed and issued in the merger on a relative fair value basis. As such, the Company allocated $2,081 to the Term Loan, $9,633 to equity instruments, which was expensed in general and administrative expenses as the offering costs exceeded the proceeds received, and $1,507 to the warrant liabilities assumed and warrant liabilities issued with the term debt, which was expensed within the general and administrative expenses within the statement of operations. Additionally, pursuant to the terms of the merger, the Company assumed $18,072 of CNTQ accrued and unpaid transaction expenses, of which all were paid upon consummation of the merger. As detailed below, $10,197 of these costs were expensed as the amount exceeded the proceeds received and such costs were determined not be a return to investors. Upon the closing of the merger, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 175,000,000 common shares, of which 170,000,000 were designated as common stock and 5,000,000 were designated as preferred stock, both having a par value of $0.0001 per share. Upon the closing of the merger, holders of Legacy Dragonfly common stock and preferred stock received shares of common stock in an amount determined by application of the Exchange Ratio. For periods prior to the merger, the reported share and per share amounts have been retroactively converted by applying the Exchange Ratio. The consolidated assets, liabilities, and results of operations prior to the merger are those of Legacy Dragonfly. The following table summarizes the elements of the merger allocated to the Consolidated Statements of Operations: SCHEDULE OF MERGER CASH FLOW AND SHAREHOLDERS EQUITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20220101__20221231__us-gaap--DebtInstrumentAxis__custom--PIPEFinancingMember_zMjTPh4d3xL1" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Amounts</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_409_eus-gaap--ProceedsFromIssuanceOfLongTermDebt_pn3n3_hus-gaap--DebtInstrumentAxis__custom--CNTQTrustAndPIPEInvestorsMember_zG6bobrevLw5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 82%; text-align: left">Cash: CNTQ trust and PIPE Investors</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">10,979</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ProceedsFromIssuanceOfLongTermDebt_pn3n3_hus-gaap--DebtInstrumentAxis__custom--CNTQMember_zIKBY523PW7f" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Cash: CNTQ</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--ProceedsFromIssuanceOfLongTermDebt_pn3n3_zAYMPuDZqrob" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Gross Proceeds</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">11,282</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_404_ecustom--NetLiabilitiesAssumedInMergerTransaction_iN_pn3n3_di_zesMWXdcOfSb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net liabilities assumed in merger transaction</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">(1,017</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_40A_eus-gaap--LiabilitiesAssumed1_iN_pn3n3_di_z07bdWv5Ff3b" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Warrant liability assumed in merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">(1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_404_ecustom--NetDeficitAssumedInMergerexpensed_pn3n3_zyVy1rfJwKK6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">CNTQ note payable settlement at close</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">(400</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_40D_ecustom--TransactionCosts_pn3n3_zWn173DRqkth" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">CNTQ transaction costs paid at close</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(18,072</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_400_ecustom--ProceedsFromIssuanceOfLongTermDebts_iT_pn3n3_zOselyXf8aL7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Net deficit assumed in recapitalization</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif">$</td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(10,197</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">)</td></tr> </table> DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_498_20220101__20221231__us-gaap--DebtInstrumentAxis__custom--PIPEFinancingMember_zURAK7ugHiZe" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_405_eus-gaap--CommonStockSharesOutstanding_iS_pid_zW1porDr4rEa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 82%; text-align: left">Common stock, outstanding prior to merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">3,093,348</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--StockRepurchasedDuringPeriodShares_iN_pid_di_z8SuPElb7sk8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Less: Redemption of CNTQ shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,016,912</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_406_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_hsrt--CounterpartyNameAxis__custom--CNTQPublicMember_zbdtglCiIzSf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">CNTQ Public Shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,076,436</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_hsrt--CounterpartyNameAxis__custom--CNTQSponsorMember_zTPOVEeurgt3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">CNTQ Sponsor Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,162,500</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_ecustom--StockIssuedDuringPeriodSharesReverseRecapitalization_pid_zXRNr2roRB2e" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Merger and PIPE financing shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,238,936</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_ecustom--StockConvertedReverseRecapitalization_pid_zwrLpoTqbNo1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Legacy Dragonfly shares (1)(2)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">38,576,650</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--CommonStockSharesOutstanding_iE_pid_zt62oBgDGej8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total shares of common stock immediately after the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">42,815,586</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">-The number of Legacy Dragonfly shares was determined from the shares of Legacy Dragonfly outstanding immediately prior to the closing of the merger converted at the Exchange Ratio. All fractional shares were rounded down.</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(2)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">-The preferred shares of Legacy Dragonfly were exchanged on a 1 to 1 ratio to common stock and the shares were then exchanged for shares of Dragonfly Energy Holdings Corp. at the Exchange Ratio.</td> </tr></table> Warrants As part of the reverse capitalization transaction, the Company issued public warrants, private placement warrants and Term Loan warrants. Refer to Note 12 for a further description of the warrants. Earnout The former holders of shares of Legacy Dragonfly common stock (including shares received as a result of the conversion of Legacy Dragonfly Preferred Stock into New Dragonfly Common Stock) are entitled to receive their pro rata share of up to 40,000,000 additional shares of common stock (the “Earnout Shares”). The Earnout Shares are issuable in three tranches. The first tranche of 15,000,000 shares is issuable if New Dragonfly’s 2023 total audited revenue is equal to or greater than $250,000 and New Dragonfly’s 2023 audited operating income is equal to or greater than $35,000. The second tranche of 12,500,000 shares is issuable upon achieving a volume-weighted average trading price threshold of at least $<span id="xdx_90A_ecustom--VolumeWeightedAveragePricePerShare_c20220101__20221231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--HoldersOfOutstandingSharesOfLegacyDragonflyCommonStockMember__srt--StatementScenarioAxis__custom--SecondTrancheMember_zWd1MCZMKr4h" title="Volume weighted average price per share">22.50 on or prior to December 31, 2026 and the third tranche of 12,500,000 is issuable upon achieving a volume-weighted average trading price threshold of at least $<span id="xdx_90B_ecustom--VolumeWeightedAveragePricePerShare_c20220101__20221231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--HoldersOfOutstandingSharesOfLegacyDragonflyCommonStockMember__srt--StatementScenarioAxis__custom--AnyTimeDuringPeriodBeginningOnClosingDateAndEndingOnDecember312028Member_zaZTzSXYIW6i" title="Volume weighted average price per share">32.50 on or prior to December 31, 2028. To the extent not previously earned, the second tranche is issuable if the $<span id="xdx_90C_ecustom--VolumeWeightedAveragePricePerShare_c20220101__20221231__us-gaap--VestingAxis__us-gaap--ShareBasedCompensationAwardTrancheTwoMember_zE8uBdb0ooaa" title="Volume weighted average price per share">32.50 price target is achieved by December 31, 2028. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) The Company accounts for the Earnout Shares as either equity-classified or liability-classified instruments based on an assessment of the Earnout Shares specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, as defined below. The Company has determined that the Earnout Shares are indexed to the Company’s common stock and are therefore not precluded from equity classification. Such accounting determination will be assessed at each financial statement reporting date to determine whether equity classification remains appropriate. If the Earnout Shares are later determined to be liability-classified instruments, the Company would recognize subsequent changes in the fair value of such Earnout Shares within earnings at each reporting period during the earnout period. The value of the Earnout Shares was prepared utilizing a Monte Carlo simulation model. The significant assumptions utilized in determining the fair value of Earnout Shares include the following: (1) a price for our common stock of approximately $<span id="xdx_90E_eus-gaap--SharePrice_iI_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputCommodityForwardPriceMember_zCeFXSX0lkq8">14.00; (2) a risk-free rate of <span id="xdx_908_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zPnd41d4WRwf">4.24%; (3) projected revenue and EBITDA of $<span id="xdx_900_eus-gaap--DebtInstrumentFairValue_iI_pn3n3_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRevenueMultipleMember_z9I1OxZtLRak">255,100 and $<span id="xdx_900_eus-gaap--DebtInstrumentFairValue_iI_pn3n3_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputEbitdaMultipleMember_zMFpniUNK2ak">41,000, respectively; (4) expected volatility of future annual revenue and future annual EBITDA of <span id="xdx_907_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRevenueMultipleMember_zX1JafZ3oEMk">42.0% and <span id="xdx_905_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputEbitdaMultipleMember_z9eYB6ZmLqgb">64.0% respectively; (5) discount rate of <span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputDiscountRateMember_zZOkIo37pOV4">4.24%; and (6) expected probability of change in control of <span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendPaymentMember_znJcJwucMpf1">15.0%. The accounting treatment of the Earnout Shares have been recognized at fair value upon the closing of the merger and classified in stockholders’ equity. Because the merger is accounted for as a reverse recapitalization, the recognition of the Earnout Shares has been treated as a deemed dividend and has been recorded within additional-paid-in-capital and has no net impact on additional paid-in capital.

0.0001

1.182 6265000

500000

5017000

75000000

1950000

2081000

70969000

52956000

18013000

42492000

13221000 2081000 9633000 1507000 18072000 10197000

175000000

170000000

5000000

0.0001

The following table summarizes the elements of the merger allocated to the Consolidated Statements of Operations: SCHEDULE OF MERGER CASH FLOW AND SHAREHOLDERS EQUITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20220101__20221231__us-gaap--DebtInstrumentAxis__custom--PIPEFinancingMember_zMjTPh4d3xL1" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Amounts</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_409_eus-gaap--ProceedsFromIssuanceOfLongTermDebt_pn3n3_hus-gaap--DebtInstrumentAxis__custom--CNTQTrustAndPIPEInvestorsMember_zG6bobrevLw5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 82%; text-align: left">Cash: CNTQ trust and PIPE Investors</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">10,979</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ProceedsFromIssuanceOfLongTermDebt_pn3n3_hus-gaap--DebtInstrumentAxis__custom--CNTQMember_zIKBY523PW7f" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Cash: CNTQ</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--ProceedsFromIssuanceOfLongTermDebt_pn3n3_zAYMPuDZqrob" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Gross Proceeds</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">11,282</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_404_ecustom--NetLiabilitiesAssumedInMergerTransaction_iN_pn3n3_di_zesMWXdcOfSb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net liabilities assumed in merger transaction</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">(1,017</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_40A_eus-gaap--LiabilitiesAssumed1_iN_pn3n3_di_z07bdWv5Ff3b" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Warrant liability assumed in merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">(1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_404_ecustom--NetDeficitAssumedInMergerexpensed_pn3n3_zyVy1rfJwKK6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">CNTQ note payable settlement at close</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right">(400</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_40D_ecustom--TransactionCosts_pn3n3_zWn173DRqkth" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">CNTQ transaction costs paid at close</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(18,072</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_400_ecustom--ProceedsFromIssuanceOfLongTermDebts_iT_pn3n3_zOselyXf8aL7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Net deficit assumed in recapitalization</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif">$</td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(10,197</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">)</td></tr> </table> DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_498_20220101__20221231__us-gaap--DebtInstrumentAxis__custom--PIPEFinancingMember_zURAK7ugHiZe" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_405_eus-gaap--CommonStockSharesOutstanding_iS_pid_zW1porDr4rEa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 82%; text-align: left">Common stock, outstanding prior to merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">3,093,348</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--StockRepurchasedDuringPeriodShares_iN_pid_di_z8SuPElb7sk8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Less: Redemption of CNTQ shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,016,912</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_406_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_hsrt--CounterpartyNameAxis__custom--CNTQPublicMember_zbdtglCiIzSf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">CNTQ Public Shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,076,436</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_hsrt--CounterpartyNameAxis__custom--CNTQSponsorMember_zTPOVEeurgt3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">CNTQ Sponsor Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,162,500</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_ecustom--StockIssuedDuringPeriodSharesReverseRecapitalization_pid_zXRNr2roRB2e" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Merger and PIPE financing shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,238,936</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_ecustom--StockConvertedReverseRecapitalization_pid_zwrLpoTqbNo1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Legacy Dragonfly shares (1)(2)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">38,576,650</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--CommonStockSharesOutstanding_iE_pid_zt62oBgDGej8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total shares of common stock immediately after the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">42,815,586</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">-The number of Legacy Dragonfly shares was determined from the shares of Legacy Dragonfly outstanding immediately prior to the closing of the merger converted at the Exchange Ratio. All fractional shares were rounded down.</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(2)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">-The preferred shares of Legacy Dragonfly were exchanged on a 1 to 1 ratio to common stock and the shares were then exchanged for shares of Dragonfly Energy Holdings Corp. at the Exchange Ratio.</td> </tr></table>

10979000

303000

11282000

1017000

1990000

-400000 -18072000 -10197000

3093348

2016912

1076436

3162500

4238936 38576650

42815586

40000000 15000000 250000 35000 12500000 22.50 12500000 32.50 32.50

14.00

4.24

255100000

41000000

42.0

64.0

4.24

15.0

Note 4 - 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: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in">●</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">●</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">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. </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">●</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">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. </td></tr> </table> 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 CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of December 31, 2022 and 2021: SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="18" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Carrying Amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 2)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 3)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Warrant liability-Term Loan</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_986_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zkwyhtlBevt" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z2ZV0lbj9yC2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z8E2nMcQ6fqk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z7JzknwND4Oe" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z6GaBgeALW2k" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 35%; text-align: left">Warrant liability-Private Placement Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98C_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zOzSTRywctkk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Carrying Amount">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zN8by81R8WJ9" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98D_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zcq9mWHdqt1h" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> -</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_985_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zrPeCKLcJdTa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zoVG3aj1zudg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zIqhgZg30Nv2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_984_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_z3QEo9F3DUge" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zQNzJKLaRt88" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_zo0h8811eX78" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zEF15BghCyvi" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> There were no assets or liabilities that were measured at fair value as of December 31, 2021. The carrying amounts of accounts receivable and accounts payable are considered level 1 and approximate fair value as of December 31, 2022 and 2021 because of the relatively short maturity of these instruments. The carrying value of the term loan and fixed rate senior notes as of December 31, 2022 and 2021, respectively, are considered level 2 and approximates their fair value as the interest rate does not differ significantly from the current market rates available to the Company for similar debt.

SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="18" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Carrying Amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 2)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 3)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Warrant liability-Term Loan</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_986_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zkwyhtlBevt" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z2ZV0lbj9yC2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z8E2nMcQ6fqk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z7JzknwND4Oe" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z6GaBgeALW2k" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 35%; text-align: left">Warrant liability-Private Placement Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98C_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zOzSTRywctkk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Carrying Amount">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zN8by81R8WJ9" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98D_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zcq9mWHdqt1h" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> -</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_985_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zrPeCKLcJdTa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zoVG3aj1zudg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zIqhgZg30Nv2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_984_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_z3QEo9F3DUge" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zQNzJKLaRt88" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_zo0h8811eX78" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zEF15BghCyvi" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

30841000

1990000

32831000

1990000

30841000

NOTE 5 — INVENTORY Inventory consists of the following: SCHEDULE OF INVENTORY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20221231_zDWFc71STLgj" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20211231_zWL4wAlnbci8" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_404_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINzAGF_zzp7dMnSj42l" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left">Raw material</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">42,586</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">22,885</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINzAGF_zDYR6X4oMjn3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,260</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,242</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryNet_iTI_pn3n3_mtINzAGF_zHisUcETa3Z2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total inventory</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">49,846</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">27,127</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

Inventory consists of the following: SCHEDULE OF INVENTORY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20221231_zDWFc71STLgj" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20211231_zWL4wAlnbci8" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_404_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINzAGF_zzp7dMnSj42l" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left">Raw material</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">42,586</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">22,885</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINzAGF_zDYR6X4oMjn3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,260</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,242</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryNet_iTI_pn3n3_mtINzAGF_zHisUcETa3Z2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total inventory</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">49,846</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">27,127</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

42586000

22885000

7260000

4242000

49846000

27127000

NOTE 6 — 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. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Operating Leases The Company has leases related to the main office, warehouse space, research and development lab, and engineering office, all located in Reno, Nevada. The leases require annual escalating monthly payments ranging from $60 to $74. In December of 2021, the Company entered into another lease for additional warehouse space located in Reno, Nevada that requires annual escalating monthly payments ranging from $47 to $55. 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. The first payment is due upon substantial completion of construction of the building which is expected to be within 2 years from the effective date. As of December 31, 2022, the lease has not commenced as the Company does not have control over the asset. The following table presents the breakout of the operating leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20221231_zakPoxcMoui2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_498_20211231_zXMZQzCCXMol" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pn3n3_zTWnSDRv32D4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left; padding-bottom: 1.5pt">Operating lease right-of-use assets</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">4,513</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">5,709</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--OperatingLeaseLiabilityCurrent_iI_pn3n3_zeyG3rpMZF76" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Short-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,188</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,082</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--OperatingLeaseLiabilityNoncurrent_iI_pn3n3_zfwS1Stwk379" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Long-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,541</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,694</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--OperatingLeaseLiability_iI_pn3n3_z2OHrTu1AP55" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,729</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,776</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average remaining lease term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.6 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4.6 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average discount rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> 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 December 31, 2022, the future minimum lease payments under these operating leases are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_494_20221231_zjGTD0kYfeqb" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pn3n3_maLOLLPz07u_zIyKbR6J25Ya" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">1,399</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pn3n3_maLOLLPz07u_ziD9NuHuG1S9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,435</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearThree_iI_pn3n3_maLOLLPz07u_zffGUk0acnLg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,440</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFour_iI_pn3n3_maLOLLPz07u_zdvzOcNkn5pb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">893</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pn3n3_mtLOLLPz07u_zxU5akq6TKEi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total lease payments</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,167</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iI_pn3n3_zA2KlNBSkCXb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less imputed interest</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">438</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--OperatingLeaseLiability_iI_pn3n3_zuYHAWCCE8x7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,729</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> SCHEDULE OF LEASE COST <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31,</td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31,</td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left">Lease cost</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left">Classification</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 27%; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 31%; text-align: left">Cost of goods sold</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_zn84A8IShUGf" style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right" title="Operating lease cost">1,476</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_zvtvCNofve0a" style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right" title="Operating lease cost">633</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_ze4lffQRNvoi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">95</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_z6fMaLPzD1dh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">103</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">General and administration</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zeVd5X6NjNw" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zZWctKmyAms" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">42</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Selling and marketing</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zcdkg2hHtdHa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">49</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zEk0Ta0M8PAf" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">42</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231_zLTf8aidbGFl" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">1,670</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231_zGDee2v4Jep5" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">820</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> All lease costs included in the schedule above are fixed. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Other Contingencies See Note 10 for further discussion regarding contingent consideration arising from the April 2022 Asset Purchase agreement with Thomason Jones Company, LLC. See Note 3 for further discussion regarding the earnout related to the reverse capitalization transaction.

60000

74000

47000

55000

P124M

230000

23000

21000 0.03 0.024 P2Y The following table presents the breakout of the operating leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20221231_zakPoxcMoui2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_498_20211231_zXMZQzCCXMol" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pn3n3_zTWnSDRv32D4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left; padding-bottom: 1.5pt">Operating lease right-of-use assets</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">4,513</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">5,709</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--OperatingLeaseLiabilityCurrent_iI_pn3n3_zeyG3rpMZF76" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Short-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,188</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,082</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--OperatingLeaseLiabilityNoncurrent_iI_pn3n3_zfwS1Stwk379" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Long-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,541</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,694</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--OperatingLeaseLiability_iI_pn3n3_z2OHrTu1AP55" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,729</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,776</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average remaining lease term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.6 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4.6 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average discount rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table>

4513000

5709000

1188000

1082000

3541000

4694000

4729000

5776000

P3Y7M6D

P4Y7M6D

0.052

At December 31, 2022, the future minimum lease payments under these operating leases are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_494_20221231_zjGTD0kYfeqb" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pn3n3_maLOLLPz07u_zIyKbR6J25Ya" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">1,399</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pn3n3_maLOLLPz07u_ziD9NuHuG1S9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,435</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearThree_iI_pn3n3_maLOLLPz07u_zffGUk0acnLg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,440</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFour_iI_pn3n3_maLOLLPz07u_zdvzOcNkn5pb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">893</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pn3n3_mtLOLLPz07u_zxU5akq6TKEi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total lease payments</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,167</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iI_pn3n3_zA2KlNBSkCXb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less imputed interest</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">438</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--OperatingLeaseLiability_iI_pn3n3_zuYHAWCCE8x7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,729</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

1399000

1435000

1440000

893000

5167000

438000

4729000

SCHEDULE OF LEASE COST <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31,</td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31,</td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left">Lease cost</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left">Classification</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 27%; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 31%; text-align: left">Cost of goods sold</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_zn84A8IShUGf" style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right" title="Operating lease cost">1,476</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_zvtvCNofve0a" style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right" title="Operating lease cost">633</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_ze4lffQRNvoi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">95</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_z6fMaLPzD1dh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">103</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">General and administration</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zeVd5X6NjNw" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zZWctKmyAms" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">42</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Selling and marketing</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zcdkg2hHtdHa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">49</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zEk0Ta0M8PAf" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">42</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20221231_zLTf8aidbGFl" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">1,670</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--OperatingLeaseCost_pn3n3_c20210101__20211231_zGDee2v4Jep5" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">820</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

1476000

633000

95000

103000

50000

42000

49000

42000

1670000

820000

NOTE 7 — LONG-TERM DEBT DEBT Financing — Trust Indenture On November 24, 2021, the Company entered into agreements to issue $45,000 in fixed rate senior notes (the “Series 2021-6 Notes”) pursuant to a Trust Indenture held by UMB Bank, as trustee and disbursing agent, and NewLight Capital, LLC as servicer (the “Servicer”). The trust and debt documents also required the entry into a Lender Collateral Residual Value Insurance Policy (the “Insurance Policy”), with UMB Bank as named insured for $45,000, and engagement of a placement agent, Tribe Capital Markets, LLC. Upon closing date of the financing the Company received a wire for $35,474, which is comprised of the gross proceeds of $45,000 less $3,188 in deposits to certain reserve accounts (see subsection labeled Reserve Accounts below), and $6,338 in expenses withdrawn from the gross proceeds, which included $4,725 in prepaid policy premiums and related costs underlying the Insurance Policy (see subsection labelled Collateral below), a prepaid loan monitoring fee of $60 and $1,553 in debt issuance costs. The obligation for the Series 2021-6 Notes underlying the Trust Indenture is $45,000 in principal on the date of the closing of the financing. The debt bears interest at 5.50% per annum accruing monthly on a 360 day basis. Late payments will be subject to a $50 late fee and default interest based on a rate <span id="xdx_902_ecustom--DebtInstrumentDefaultInterestRate_pid_dp_c20220101__20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember_zAlunrV64sYd" title="Debt instrument, default interest rate">5 percentage points above the applicable interest immediately prior to such default. The Company was making interest only payments on the unpaid principal amount in arrears, commencing December 1, 2021 and ending on November 1, 2022 (for interest accruing from the Financing Closing Date through October 31, 2022). Beginning on December 1, 2022, the Company was obligated to repay the debt in <span id="xdx_901_ecustom--DebtInstrumentNumberOfEqualInstallmentsOfPrincipalToBePaid_dc_uInstallment_c20220101__20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember_znb9PGjObSjj" title="Number of equal installments of principal to be paid">twenty four equal installments of principal in the amount of $1,875, plus accrued interest on the unpaid principal amount. Any remaining obligations were due and payable on November 1, 2024 (the “Maturity Date”). The obligations under the Trust Indenture will be deemed to be repaid or prepaid to the same extent, in the same amounts and at the same times, as the Series 2021-6 Notes are redeemed with funds provided except for payments made from the proceeds of the Insurance Policy (see subsection labelled Collateral below) as such funds must be reimbursed by the Company to the insurer. During the year ended December 31, 2022, a total of $1,873 of interest expense was incurred under the debt. Amortization of the debt issuance costs amounted to $1,783 during the year ended December 31, 2022. In connection with the merger on October 7, 2022, the Company entered into a Term Loan, Guarantee and Security Agreement (see subsection labeled Term Loan Agreement below) and the outstanding principal balance for the Series 2021-6 Notes underlying the Trust Indenture was paid in full. A loss on extinguishment of $4,824 was recognized upon settlement. The net balance of $40,712 on the date of the merger consisted of $45,000 in principal less $4,288 in unamortized debt discount related to the debt issuance costs and Insurance Policy. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Reserve Accounts Deposits into the reserve accounts consisted of the following items: SCHEDULE OF DEPOSITS INTO RESERVE ACCOUNTS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_491_20221231_zTvBr13jzahk" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_ecustom--PaymentReserveFund_iI_pn3n3_zlzQv8YtqaOi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%">Payment Reserve Fund</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">3,044</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--CapitalizedInterestFund_iI_pn3n3_z3aaa6eagsdg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Capitalized Interest Fund</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">144</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--DepositsToCertainReserveAccounts_iI_pn3n3_z4HbvinIpT2e" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">3,188</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The Payment Reserve Fund is a debt service fund to be maintained by UMB Bank, and the initial deposit is equal to the maximum amount of monthly interest and principal debt service payment due on the Series 2021-6 notes, plus interest earned on special redemptions (see redemptions related to certain defaults on the debt). These funds may be utilized by UMB Bank to fund certain shortfalls and a special redemption, but otherwise such funds are released pro rata to the Company based on principal payments made by the Company on the Series 2021-6 Notes. Since this was a deposit account maintained by the trustee and restricted for release upon the occurrence of future events, this deposit was treated as restricted cash. The Capitalized Interest Fund was created to hold the interest that accrued from the closing date until the first payment due on December 15, 2021. The initial deposit, therefore, was treated as prepaid interest. These funds were utilized to pay the interest incurred through that first payment date, therefore the balance as of December 31, 2021 was $3,088. Both above funds, to the extent that they are deposited into interest bearing accounts, earn interest that UMB Bank will transfer into an Interest Earnings Fund, which funds will be held in escrow until the earlier of maturity or when the debt obligations are paid in full (assuming no events of default). There were no funds deposited into interest bearing accounts at December 31, 2022 or December 31, 2021. In connection with the merger, the Company settled the Trust Indenture and the balance in the Payment Reserve Fund was offset against the proceeds. Collateral As collateral for payment of the debt and certain obligations related to performance under the Trust Indenture and related transaction documents, the Company and the guarantors granted to NewLight Capital, LLC, as representative and for the benefit of UMB Bank a continuing security interest in substantially all of the assets of the Company, including certain intellectual property assets. Under the terms of the Trust Indenture, the Insurance Policy is required as additional collateral guaranteeing the payments under the debt by the Company. The Company determined this was not a direct incremental cost of the financing but rather a cost for maintaining the collateral, recognized under the guidance at ASC 860-30, Transfers and Servicing, Secured Borrowing and Collateral. The premium costs were recognized as a prepaid expense and were being amortized straight line over the term of the policy (three years, unless reduced due to default provisions). The secured party (i.e., UMB Bank, as trustee) would not have the right to sell or repledge either the intellectual property or the insurance collateral unless and until the Company defaulted and a claim was made. Upon settlement of the debt underlying the Trust Indenture, the collateral requirements for the Insurance Policy were eliminated. Loan Monitoring Fees The Company was to incur ongoing monitoring service by NewLight Capital, LLC for 24 months at $180 total expense. These services entail monitory of financial records and information related to collateral enforcement on an ongoing basis. The $60 prepayment funded on the date of closing was recognized as a prepaid expense and was being amortized on a straight line basis over the first 10 months of the agreement as the amount was paid in full in connection with the merger. The Company incurred $77 and $10 of monitoring fee expenses during the years ended December 31, 2022 and 2021, respectively. In connection with the merger, prepayment on that date of $33 was expensed and included in debt extinguishment. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Financial Covenants – Trust Indenture The Company was obligated to comply with certain covenants which included a minimum adjusted EBITDA, capital expenditure requirement and minimum fixed charge coverage ratio. The Company was in compliance with all financial covenants as of December 31, 2021 and through October 7, 2022, the date of the settlement of the obligations underlying the Trust Indenture. Term Loan Agreement On October 7, 2022, in connection with the merger, CNTQ, Legacy Dragonfly and CCM Investments 5 LLC (“CCM 5”, and in connection with the Term Loan, the “Chardan Lender”), and EICF Agent LLC (“EIP” and, collectively with the Chardan Lender, the “Initial Term Loan Lenders”) entered into the Term Loan, Guarantee and Security Agreement (the “Term Loan Agreement”) setting forth the terms of a senior secured term loan facility in an aggregate principal amount of $<span id="xdx_90B_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zlqLvUju0Nkb" title="Debt instrument, face amount">75,000, or the Term Loan. The Chardan Lender backstopped its commitment under the Debt Commitment Letter by entering into a backstop commitment letter, dated as of May 20, 2022 (the “Backstop Commitment Letter”), with a certain third-party financing source (the “Backstop Lender” and collectively with EIP, the “Term Loan Lenders”), pursuant to which the Backstop Lender committed to purchase from the Chardan Lender the aggregate amount of the Term Loan held by the Chardan Lender (the “Backstopped Loans”) immediately following the issuance of the Term Loan on the Closing Date. Pursuant to an assignment agreement, the Backstopped Loans were assigned by CCM 5 to the Backstop Lender on the Closing Date. Pursuant to the terms of the Term Loan Agreement, the Term Loan was advanced in one tranche on the Closing Date. The proceeds of the Term Loan were used (i) to refinance on the Closing Date prior indebtedness (including the obligations underlying the Trust Indenture), (ii) to support the Transaction under the Merger Agreement, (iii) for working capital purposes and other corporate purposes, and (iv) to pay any fees associated with transactions contemplated under the Term Loan Agreement and the other loan documents entered into in connection therewith, including the transactions described in the foregoing clauses (i) and (ii) and fees and expenses related to the business combination. The Term Loan amortizes in the amount of <span id="xdx_90E_ecustom--DebtInstrumentAmortizationPercentage_pid_dp_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z0MeiQgK17e1" title="Debt instrument, amortization percentage">5% per annum (or $<span id="xdx_90F_ecustom--DebtInstrumentAmortizationAmount_pn2n3_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zRmbfor7BSI7" title="Debt instrument, amortization amount">937.5 on the first day of each calendar quarter) beginning <span id="xdx_90F_ecustom--DebtInstrumentAmortizationPeriod_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zjh4pQz3f303" title="Debt instrument, amortization period">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 <span id="xdx_906_eus-gaap--DebtInstrumentBasisSpreadOnVariableRate1_pid_dp_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zkF5hOwZUKG6" title="Debt instrument, basis spread on variable rate">13.5%, of which <span id="xdx_900_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--UntilApril12023Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember_zvcKyhdfgr6a" title="Variable rate, payable in cash">7% will be payable in cash and <span id="xdx_908_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInKind_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--UntilApril12023Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember_zEDli6eU3gYf" title="Variable rate, payable In kind">6.5% will be paid in-kind, (ii) thereafter until October 1, 2024, at a per annum rate equal to adjusted SOFR plus <span id="xdx_906_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember_zwtc2LuQEX5e" title="Variable rate, payable in kind">7% payable in cash plus an amount ranging from <span id="xdx_906_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInKind_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MinimumMember_zgNLkGeJ5rUf" title="Variable rate, payable in kind">4.5% to <span id="xdx_900_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInKind_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MaximumMember_zFvQ4Ai3IdG8" title="Variable rate, payable in kind">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 <span id="xdx_90F_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MinimumMember_zx4alzfBl9Bd" title="Variable rate, payable in cash">11.5% to <span id="xdx_90F_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MaximumMember_zW5ZC6AN3Jnj" title="Variable rate, payable in cash">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 <span id="xdx_900_eus-gaap--DebtInstrumentBasisSpreadOnVariableRate1_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MinimumMember_zkz1q9aUD9s5" title="Basis spread on variable rate">1%. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) In addition to optional prepayments by the Company upon written notice, the Term Loan Agreement provides for mandatory prepayments upon receipt of proceeds from certain transactions or casualty events. Beginning on the date the financial statements for the year ended December 31, 2023 are required to be delivered to the Term Loan Lenders, the Company will be required to prepay the Term Loan based on excess cash flow, as defined in the agreement. 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 <span id="xdx_909_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_c20221231__us-gaap--ClassOfWarrantOrRightAxis__custom--PennyWarrantsMember_zwGvTa3n5Fk3" title="Warrants exercisable">2,593,056 and (ii) the $10 warrants to issue warrants to the Term Loan Lenders exercisable to purchase an aggregate of <span id="xdx_902_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_c20221231__us-gaap--ClassOfWarrantOrRightAxis__custom--Warrants10Member_zrINXAvWwCa" title="Warrants exercisable">1,600,000 shares of common stock at $10 per share. Refer to Note 12 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 year ended December 31, 2022, a total of $<span id="xdx_909_eus-gaap--InterestExpenseDebtExcludingAmortization_pn3n3_c20220101__20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z4zfkDeNh2t7">3,195 of interest expense was incurred under the debt. Amortization of the debt issuance costs amounted to $<span id="xdx_90D_eus-gaap--AmortizationOfFinancingCosts_pn3n3_c20220101__20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z4a1g2SiW51g">38 during the year ended December 31, 2022. The carrying balance of $<span id="xdx_909_eus-gaap--LongTermDebt_iI_pn3n3_c20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zqw5NaZPaVn7" title="Long term debt">19,242 on December 31, 2022 consisted of $<span id="xdx_90C_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z3t9G6jJTBP" title="Debt instrument, face amount">75,000 in principal, plus $<span id="xdx_902_eus-gaap--PaidInKindInterest_pn3n3_c20220101__20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z1cJRKhlg4e7" title="Paid in kind interest">1,192 PIK interest, less $<span id="xdx_908_eus-gaap--DeferredFinanceCostsNet_iI_pn3n3_c20221231__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zyDkmvJ43WJ1">56,950 in unamortized debt discount related to the debt issuance costs. Financial Covenants – Term Loan Maximum Senior Leverage Ratio The senior leverage ratio is the ratio of (a) consolidated indebtedness, as defined, on such date minus 100% of the unrestricted cash and cash equivalents held (subject to adjustment) to (b) Consolidated EBITDA for the trailing twelve (12) fiscal month period most recently ended. If liquidity, as defined, for any fiscal quarter is less than $17,500, the senior leverage ratio shall not be permitted, as of the last day of any fiscal quarter ending during any period set forth below, to exceed the ratio set forth opposite such period in the table below: SCHEDULE OF LEVERAGE RATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 49%; text-align: center">Test Period Ending</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 49%; text-align: center">Leverage Ratio</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2022 – March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_900_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyTwoToMarchThirtyOneTwoThousandTwentyThreeMember_zNMDB4Kkr9Lc" title="Leverage ratio">6.75 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2023 – September 30, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_902_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyThreeToSeptemberThirtyTwoThousandTwentyThreeMember_zyed43namC4c" title="Leverage ration">6.00 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2023 – March 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_905_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyThreeToMarchThirtyOneTwoThousandTwentyThreeMember_zwEoiDuwV5Fh" title="Leverage ration">5.00 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2024 – September 30, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_908_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFourToSeptemberThirtyTwoThousandTwentyFourMember_z5Fdv0SWNwm4" title="Leverage ratio">4.00 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2024 – March 31, 2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_901_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyFourToMarchThirtyOneTwoThousandTwentyFiveMember_z3aeYtSCM0Gi" title="Leverage ratio">3.25 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2025 and thereafter</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_905_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFiveAndThereAfterMember_zUL6FYNZqq5h" title="Leverage ratio">3.00 to 1.00</td></tr> </table> Liquidity The Company shall not permit their liquidity (determined on a consolidated basis) to be less than $10,000 as of the last day of each fiscal month (commencing with month ending December 31, 2022). Fixed Charge Coverage Ratio The fixed charge coverage ratio is the ratio of consolidated EBITDA (less capital expenditures and certain other adjustments) to consolidated fixed charges, as defined in the agreement. If liquidity is less than $15,000 as of the last day of any fiscal quarter (commencing with the quarter ending December 31, 2022), then the Company shall not permit the fixed charge coverage ratio for the trailing four quarterly periods ending on the last day of any such quarter to be less than 1.15 : 1.00. Capital Expenditures If consolidated EBITDA for the trailing twelve-month period ending on the most recently completed fiscal quarter is less than $15,000, then the level of capital expenditures is limited. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Long-Term Debt Maturities At December 31, 2022, the future debt maturities are as follows: SCHEDULE OF FUTURE DEBT MATURITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; display: none; text-align: left"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; display: none; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20221231_zTUrCUan6qDe" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; display: none; text-align: center"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; display: none; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left">For the Years Ending December 31,</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Future Debt Maturities</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_408_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths_iI_pn3n3_maLTDMRzRKL_zcGWmJubOnxl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo_iI_pn3n3_maLTDMRzRKL_zM23uBAs5Dbj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">2024</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">938</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearThree_iI_pn3n3_maLTDMRzRKL_zFgf2YKU1s4d" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,750</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour_iI_pn3n3_maLTDMRzRKL_zwrzHCdWZjE" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">91,809</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_ecustom--LongTermDebtMaturitiesRepaymentsOfPrincipal_iTI_pn3n3_mtLTDMRzRKL_maLTDzvhW_zm95LGnD3Eua" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Total</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">96,497</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--EstimatedInterestPaidinkind_iI_pn3n3_maLTDzvhW_z5nKWIZ9uOFj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: Estimated interest paid-in-kind</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(20,305</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebt_iTI_pn3n3_mtLTDzvhW_z5TWIiEB0Snk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">76,192</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredFinanceCostsNet_iNI_pn3n3_di_zQ1iwft3G8td" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: Unamortized debt issuance costs, non-current</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(56,950</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--DebtInstrumentCarryingAmount_iI_pn3n3_zSptGNBXmbAa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total carrying amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">19,242</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--LongTermDebtCurrent_iNI_pn3n3_di_zY7QLw7eARAi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: current portion of debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(19,242</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebtNoncurrent_iI_pn3n3_zO3UxaoYIFr1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total long-term debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> On March 29, 2023, the Company obtained a waiver from the Administrative Agent and the Term Loan Lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarter ended March 31, 2023. The Company concluded it is probable it will not comply with future financial covenants. As a result, the Company classified the entire Term Loan balance in current liabilities on the balance sheet as of December 31, 2022.

45000000

45000000 35474000

45000000

3188000 6338000 4725000 60000 1553000

45000000

0.0550

50 0.05 24

1875000

2024-11-01

1873000

1783000

4824000

40712000

45000000

4288000

Deposits into the reserve accounts consisted of the following items: SCHEDULE OF DEPOSITS INTO RESERVE ACCOUNTS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_491_20221231_zTvBr13jzahk" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_ecustom--PaymentReserveFund_iI_pn3n3_zlzQv8YtqaOi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%">Payment Reserve Fund</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">3,044</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--CapitalizedInterestFund_iI_pn3n3_z3aaa6eagsdg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Capitalized Interest Fund</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">144</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--DepositsToCertainReserveAccounts_iI_pn3n3_z4HbvinIpT2e" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">3,188</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 3044000 144000 3188000 3088000 P24M 180000 60000 P10M 77000 10000 33000

75000000

0.05 937500 P24M

0.135

0.07 0.065 0.07 0.045 0.065 0.115 0.135

0.01

2593056

1600000

3195000

38000

19242000

75000000

1192000

56950000

The senior leverage ratio is the ratio of (a) consolidated indebtedness, as defined, on such date minus 100% of the unrestricted cash and cash equivalents held (subject to adjustment) to (b) Consolidated EBITDA for the trailing twelve (12) fiscal month period most recently ended. If liquidity, as defined, for any fiscal quarter is less than $17,500, the senior leverage ratio shall not be permitted

SCHEDULE OF LEVERAGE RATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 49%; text-align: center">Test Period Ending</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 49%; text-align: center">Leverage Ratio</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2022 – March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_900_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyTwoToMarchThirtyOneTwoThousandTwentyThreeMember_zNMDB4Kkr9Lc" title="Leverage ratio">6.75 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2023 – September 30, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_902_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyThreeToSeptemberThirtyTwoThousandTwentyThreeMember_zyed43namC4c" title="Leverage ration">6.00 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2023 – March 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_905_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyThreeToMarchThirtyOneTwoThousandTwentyThreeMember_zwEoiDuwV5Fh" title="Leverage ration">5.00 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2024 – September 30, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_908_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFourToSeptemberThirtyTwoThousandTwentyFourMember_z5Fdv0SWNwm4" title="Leverage ratio">4.00 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2024 – March 31, 2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_901_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyFourToMarchThirtyOneTwoThousandTwentyFiveMember_z3aeYtSCM0Gi" title="Leverage ratio">3.25 to 1.00</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2025 and thereafter</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_905_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_dp_c20220101__20221231__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFiveAndThereAfterMember_zUL6FYNZqq5h" title="Leverage ratio">3.00 to 1.00</td></tr> </table>

6.75 to 1.00

6.00 to 1.00

5.00 to 1.00

4.00 to 1.00

3.25 to 1.00

3.00 to 1.00

The Company shall not permit their liquidity (determined on a consolidated basis) to be less than $10,000 as of the last day of each fiscal month (commencing with month ending December 31, 2022). The fixed charge coverage ratio is the ratio of consolidated EBITDA (less capital expenditures and certain other adjustments) to consolidated fixed charges, as defined in the agreement. If liquidity is less than $15,000 as of the last day of any fiscal quarter (commencing with the quarter ending December 31, 2022), then the Company shall not permit the fixed charge coverage ratio for the trailing four quarterly periods ending on the last day of any such quarter to be less than 1.15 : 1.00. If consolidated EBITDA for the trailing twelve-month period ending on the most recently completed fiscal quarter is less than $15,000, then the level of capital expenditures is limited.

At December 31, 2022, the future debt maturities are as follows: SCHEDULE OF FUTURE DEBT MATURITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; display: none; text-align: left"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; display: none; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20221231_zTUrCUan6qDe" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; display: none; text-align: center"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; display: none; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left">For the Years Ending December 31,</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Future Debt Maturities</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_408_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths_iI_pn3n3_maLTDMRzRKL_zcGWmJubOnxl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo_iI_pn3n3_maLTDMRzRKL_zM23uBAs5Dbj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">2024</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">938</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearThree_iI_pn3n3_maLTDMRzRKL_zFgf2YKU1s4d" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,750</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour_iI_pn3n3_maLTDMRzRKL_zwrzHCdWZjE" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">91,809</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_ecustom--LongTermDebtMaturitiesRepaymentsOfPrincipal_iTI_pn3n3_mtLTDMRzRKL_maLTDzvhW_zm95LGnD3Eua" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Total</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">96,497</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--EstimatedInterestPaidinkind_iI_pn3n3_maLTDzvhW_z5nKWIZ9uOFj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: Estimated interest paid-in-kind</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(20,305</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebt_iTI_pn3n3_mtLTDzvhW_z5TWIiEB0Snk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">76,192</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredFinanceCostsNet_iNI_pn3n3_di_zQ1iwft3G8td" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: Unamortized debt issuance costs, non-current</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(56,950</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--DebtInstrumentCarryingAmount_iI_pn3n3_zSptGNBXmbAa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total carrying amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">19,242</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--LongTermDebtCurrent_iNI_pn3n3_di_zY7QLw7eARAi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: current portion of debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(19,242</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebtNoncurrent_iI_pn3n3_zO3UxaoYIFr1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total long-term debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

938000

3750000

91809000

96497000 -20305000

76192000

56950000

19242000

Note 8 - REVOLVING NOTE AGREEMENT On October 6, 2021, the Company entered into a revolving note agreement with a lender to borrow up to $8,000. The borrowing amount is limited and based on the lesser of maximum principal amount of $8,000 and the sum equal to 80% of eligible accounts receivable and 50% of eligible inventory. Interest on each advance shall accrue at the prime rate announced by US Bank from time to time, as and when such rate changes. The revolving credit amount is collateralized by all assets of the Company. The Company drew an initial amount of $5,000 under the facility, which it subsequently re-paid and the revolving note was terminated as a closing condition of the 2021-6 Notes. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

8000000

0.80 0.50

5000000

Note 9 - INCOME TAXES The income tax expense consists of the following items: SCHEDULE OF INCOME TAX EXPENSE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_491_20220101__20221231_zuOlbZbA7XP7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20210101__20211231_zMyNFMXQHFtb" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_406_eus-gaap--CurrentIncomeTaxExpenseBenefit_pn3n3_maITEBzvM7_zyNfoNhgGWU8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%">Current</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">(257</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">1,489</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredIncomeTaxesAndTaxCredits_pn3n3_maITEBzvM7_zvHyHZ7Cm9ff" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Deferred</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(452</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">122</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--IncomeTaxExpenseBenefit_iT_pn3n3_mtITEBzvM7_z31CKpE3XWh8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total tax expense</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(709</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,611</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Components of deferred tax assets (liabilities) are as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS (LIABILITIES) <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49C_20221231_zQpLlW1l0G16" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20211231_zDXiSWUTFWMk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsGrossAbstract_iB_zgaWzmNlYY1h" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Deferred tax assets:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--DeferredTaxAssetsLiabilitiesLeases_iI_pn3n3_maDTAGzlQL_zLPjGLzpywqd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left">Lease liability</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">1,071</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">1,221</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_iI_pn3n3_maDTAGzlQL_zOE0VNcjvP6b" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Stock based compensation</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">139</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">35</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsAccruedLiabilities_iI_pn3n3_maDTAGzlQL_zp5WdytqBVH7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued expenses</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">506</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsAllowanceForDoubtfulAccounts_iI_pn3n3_maDTAGzlQL_zv5QDune5dM4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Allowance for bad debt</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">75</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">59</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--DeferredTaxAssetsInProcessResearchAndDevelopment_iI_pn3n3_maDTAGzlQL_zx0DaIntgtZg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development credit</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DeferredTaxAssetsGoodwillAndIntangibleAssets_iI_pn3n3_maDTAGzlQL_zpGd1ZSq7rf7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Fixed assets and intangibles</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">25</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--DeferredTaxAssetsInterestExpense_iI_pn3n3_maDTAGzlQL_zNSs6x0IT7X6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Interest expense</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,595</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--DeferredTaxAssetsPrepaidExpenses_iI_pn3n3_maDTAGzlQL_zLjawstuuh0g" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Prepaid expenses</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">960</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_iI_pn3n3_maDTAGzlQL_zBfuypxlBm5i" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net Operating Loss</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,727</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsInventory_iI_pn3n3_maDTAGzlQL_zcs6HahGPmXg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Inventory (Sec. 263A)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">62</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">45</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--DeferredTaxAssetsGross_iTI_pn3n3_mtDTAGzlQL_zccSKXhTo5Je" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Deferred tax asset</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">8,360</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,360</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Deferred tax liabilities:</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--DeferredTaxLiabilitiesRightOfUseAsset_iI_pn3n3_maDITLzOSa_zn7klabrMTCe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Right of Use Asset</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,036</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,207</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DeferredTaxLiabilitiesPropertyPlantAndEquipment_iI_pn3n3_maDITLzOSa_zTxGuw75lfQg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Fixed assets and intangibles</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">606</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--DeferredIncomeTaxLiabilities_iTI_pn3n3_mtDITLzOSa_ziGlxXHYCOCk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Deferred tax liability</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,036</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,813</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_400_ecustom--DeferredTaxAssets_iI_pn3n3_maDTALNzrPc_zc34cREJbJyk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net deferred tax asset (liability)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">7,324</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(453</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsValuationAllowance_iNI_pn3n3_di_msDTALNzrPc_zKHxYpivjkAh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Valuation Allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(7,324</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsLiabilitiesNet_iNTI_di_mtDTALNzrPc_zYhEPi0p25He" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net deferred tax asset</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(453</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> Reconciliation between the effective tax rate on income from continuing operations and the statutory rate for the years ended December 31, 2022 and 2021, are as follows: SCHEDULE OF RECONCILIATION BETWEEN THE EFFECTIVE TAX RATE ON INCOME FROM CONTINUING OPERATIONS AND THE STATUTORY RATE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Tax</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Percentage</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Tax</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Percentage</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 44%; text-align: left">Book income (loss) before taxes</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate_pn3n3_c20220101__20221231_zYCRu6NJSPo8" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, tax">(8,459</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_pid_dp_c20220101__20221231_z5ZNlPF6L587" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, percent">21.00%</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td> <td id="xdx_98F_eus-gaap--IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate_pn3n3_c20210101__20211231_ztmtY1LnGj8d" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, tax">1,249</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td> <td id="xdx_98E_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_pid_dp_c20210101__20211231_z14Pmu8VeYF6" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, percent">21.00%</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Permanent differences (transaction costs)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCosts_pn3n3_c20220101__20221231_zCP1P3GYv4mh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), tax">2,185</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCostsPercent_pid_dp_c20220101__20221231_zR4ehKgazkT8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), percent">(5.42)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_983_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCosts_pn3n3_c20210101__20211231_z85LOTt2xUYh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), tax">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_986_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCostsPercent_pid_dp_c20210101__20211231_zJJHj9DtJWw1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), percent">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Permanent differences (warrants)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrants_pn3n3_c20220101__20221231_zIPbAbWl59sl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), tax">(1,144</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrantsPercent_pid_dp_c20220101__20221231_ziatu3OsIcvk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), percent">2.84%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98D_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrants_pn3n3_c20210101__20211231_zcWeNVuSXL67" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), tax">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_989_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrantsPercent_pid_dp_c20210101__20211231_z3q3VbK9YxX8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), percent">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Permanent differences (other -other than tax)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTax_pn3n3_c20220101__20221231_zYrJSFtvxRG5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), tax">458</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTaxPercent_pid_dp_c20220101__20221231_z5vRqsOdN0Ne" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), percent">(1.14)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_986_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTax_pn3n3_c20210101__20211231_ztW1yK54P9s5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), tax">188</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98B_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTaxPercent_pid_dp_c20210101__20211231_zTLiKolZsq87" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), percent">3.16%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">State taxes, net</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--IncomeTaxReconciliationStateAndLocalIncomeTaxes_pn3n3_c20220101__20221231_zjWwqF9Jo2v8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, tax">(722</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_pid_dp_c20220101__20221231_zPRQdU5mPLPi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, percent">1.79%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_989_eus-gaap--IncomeTaxReconciliationStateAndLocalIncomeTaxes_pn3n3_c20210101__20211231_zz3wU6kwPcXf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, tax">128</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98F_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_pid_dp_c20210101__20211231_ztIyyYrCu5R9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, percent">2.15%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Deferred true-up</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUp_pn3n3_c20220101__20221231_zPCEcvae6WWc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, tax">(288</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUpPercent_pid_dp_c20220101__20221231_zFfMn6Mc2jyl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, percent">0.71%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98A_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUp_pn3n3_c20210101__20211231_zlyBrqG8vss5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, tax">56</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_985_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUpPercent_pid_dp_c20210101__20211231_zUjKQxdAZm1j" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, percent">0.94%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development credits</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_ecustom--EffectiveIncomeTaxRateReconciliationResearchAndDevelopmentCredits_pn3n3_c20220101__20221231_zpSERUHbXA6f" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Research and development credits, tax">(200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_ecustom--EffectiveIncomeTaxRateReconciliationResearchAndDevelopmentCreditsPercent_pid_dp_c20220101__20221231_z79QhFO9CvZa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Research and development credits, percent">0.50%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Uncertain tax positions</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositions_pn3n3_c20220101__20221231_zBQbLVd7BW28" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, tax">128</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositionsPercent_pid_dp_c20220101__20221231_zpd8a5fzNSwi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, percent">(0.32)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_980_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositions_pn3n3_c20210101__20211231_zHMXBbWCfyAi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, tax">(19</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_983_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositionsPercent_pid_dp_c20210101__20211231_zoWj82q9FAR7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, percent">(0.32)%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Other</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--IncomeTaxReconciliationOtherAdjustments_pn3n3_c20220101__20221231_zlhI65no4i41" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, tax">9</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--EffectiveIncomeTaxRateReconciliationOtherAdjustments_pid_dp_c20220101__20221231_zJAgKxQrvBHi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, percent">(0.02)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98E_eus-gaap--IncomeTaxReconciliationOtherAdjustments_pn3n3_c20210101__20211231_z2lLIhGxM2W2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, tax">9</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_985_eus-gaap--EffectiveIncomeTaxRateReconciliationOtherAdjustments_pid_dp_c20210101__20211231_zJG9XsyyoA07" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, percent">0.15%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Change in valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance_pn3n3_c20220101__20221231_z7vdbo73P8n6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, tax">7,324</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--EffectiveIncomeTaxRateReconciliationChangeInDeferredTaxAssetsValuationAllowance_pid_dp_c20220101__20221231_zxT5qRYbLho4" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, percent">(18.18)%</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_988_eus-gaap--IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance_pn3n3_c20210101__20211231_zrp909mGdKM7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, tax">-</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98F_eus-gaap--EffectiveIncomeTaxRateReconciliationChangeInDeferredTaxAssetsValuationAllowance_pid_dp_c20210101__20211231_zVpnu8wBHwAl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, percent">-</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; padding-left: 10pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--IncomeTaxExpenseBenefit_pn3n3_c20220101__20221231_zdE61Zxhe81d" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total, tax">(709</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right" title="Book income (loss) before taxes, percent"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif">$</td> <td id="xdx_980_eus-gaap--IncomeTaxExpenseBenefit_pn3n3_c20210101__20211231_z5rSM2MqDkl8" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total, tax">1,611</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; padding-left: 20pt; text-align: left">Effective tax rate</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right" title="Federal income tax provision at statutory rates"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_pid_dp_c20220101__20221231_zhLDOby0QE7l" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Effective tax rate, percent">1.76%</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td id="xdx_988_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_pid_dp_c20210101__20211231_zan3Bv4iYimk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Effective tax rate, percent">27.08%</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> </table> The tax returns of the Company are open for three years form the date of filing. At the report date, the statute of limitations for federal and state tax returns are open for the Company for 2019, 2020 and 2021. Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not yet evaluated if section 382 was triggered. Subject to the limitations described below, as of December 31, 2022, the Company had federal net operating loss carryforwards of approximately $16,140, available to reduce future taxable income which do not expire, but are limited to 80% utilization against taxable income. As of December 31, 2022, the Company had state net operating loss carryforwards of approximately $6,747, available to reduce future taxable income, which start to expire in 2037. The Company also had research and development credits of $200 as of December 31, 2022 to offset future federal income taxes, which are set to expire in <span id="xdx_908_ecustom--TaxCreditCarryForwardExpirationYear_c20220101__20221231__us-gaap--IncomeTaxAuthorityAxis__us-gaap--DomesticCountryMember_z4J9yuUJbQf2" title="Tax credit carry forward expiration year">2042. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Management of the Company evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and determined that it is more likely than not that the Company will not recognize the benefits of the deferred tax assets. As a result, a full valuation allowance was recorded as of December 31, 2022. The valuation allowance as of December 31, 2022 was $7,324, primarily due to the company entering into a 3 year cumulative loss position and no expectation of income for the year ended December 31, 2023. As part of the Tax Cuts and Jobs Act that was enacted in December of 2017, taxpayers are required to capitalize research and development expenses and amortize them over five years if the expense is incurred in the US and over fifteen years if incurred in a foreign jurisdiction. The effective date for that provision is for tax years beginning on or after January 1, 2022. The new capitalization requirement increased deferred tax assets related to research and development expenses and decreased taxable loss in the current year, both of which were offset by a full valuation allowance. The roll-forward of the Company’s gross uncertain tax positions is as follows: SCHEDULE OF GROSS UNCERTAIN TAX POSITIONS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Gross Uncertain Tax Position</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 78%">Balance January 1, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--UnrecognizedTaxBenefits_iS_pn3n3_c20210101__20211231_z2K3Z6Xnx3s8" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Balance January 1, 2021">19</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Additions for current year tax positions</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions_pn3n3_c20210101__20211231_zJomcofNQUr8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Additions for current year tax positions">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Reductions for prior year tax positions</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions_iN_pn3n3_di_c20210101__20211231_zljkz3657TX3" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Reductions for prior year tax positions">(19</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Balance- December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--UnrecognizedTaxBenefits_iS_pn3n3_c20220101__20221231_zB6IuhY2mWVb" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Balance- December 31, 2021">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Additions for current year tax positions</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions_pn3n3_c20220101__20221231_z2BSF9pzfUgc" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Additions for current year tax positions">128</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Balance- December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--UnrecognizedTaxBenefits_iE_pn3n3_c20220101__20221231_z8uTcvIhnsNf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Balance- December 31, 2022">128</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The Company’s total uncertain tax positions increased during the year ended December 31, 2022 as a result of a reserve established on federal research and development credits generated in the current year. None of the uncertain tax positions that, if realized, would affect the Company’s effective tax rate in future periods due to a valuation allowance provided against the Company’s net deferred tax assets.

The income tax expense consists of the following items: SCHEDULE OF INCOME TAX EXPENSE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_491_20220101__20221231_zuOlbZbA7XP7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20210101__20211231_zMyNFMXQHFtb" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_406_eus-gaap--CurrentIncomeTaxExpenseBenefit_pn3n3_maITEBzvM7_zyNfoNhgGWU8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%">Current</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">(257</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">1,489</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredIncomeTaxesAndTaxCredits_pn3n3_maITEBzvM7_zvHyHZ7Cm9ff" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Deferred</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(452</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">122</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--IncomeTaxExpenseBenefit_iT_pn3n3_mtITEBzvM7_z31CKpE3XWh8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total tax expense</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(709</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,611</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

-257000

1489000

-452000

122000

-709000

1611000

Components of deferred tax assets (liabilities) are as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS (LIABILITIES) <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49C_20221231_zQpLlW1l0G16" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20211231_zDXiSWUTFWMk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsGrossAbstract_iB_zgaWzmNlYY1h" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Deferred tax assets:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--DeferredTaxAssetsLiabilitiesLeases_iI_pn3n3_maDTAGzlQL_zLPjGLzpywqd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left">Lease liability</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">1,071</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">1,221</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_iI_pn3n3_maDTAGzlQL_zOE0VNcjvP6b" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Stock based compensation</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">139</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">35</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsAccruedLiabilities_iI_pn3n3_maDTAGzlQL_zp5WdytqBVH7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued expenses</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">506</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsAllowanceForDoubtfulAccounts_iI_pn3n3_maDTAGzlQL_zv5QDune5dM4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Allowance for bad debt</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">75</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">59</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--DeferredTaxAssetsInProcessResearchAndDevelopment_iI_pn3n3_maDTAGzlQL_zx0DaIntgtZg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development credit</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DeferredTaxAssetsGoodwillAndIntangibleAssets_iI_pn3n3_maDTAGzlQL_zpGd1ZSq7rf7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Fixed assets and intangibles</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">25</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--DeferredTaxAssetsInterestExpense_iI_pn3n3_maDTAGzlQL_zNSs6x0IT7X6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Interest expense</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,595</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--DeferredTaxAssetsPrepaidExpenses_iI_pn3n3_maDTAGzlQL_zLjawstuuh0g" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Prepaid expenses</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">960</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_iI_pn3n3_maDTAGzlQL_zBfuypxlBm5i" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net Operating Loss</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,727</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsInventory_iI_pn3n3_maDTAGzlQL_zcs6HahGPmXg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Inventory (Sec. 263A)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">62</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">45</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--DeferredTaxAssetsGross_iTI_pn3n3_mtDTAGzlQL_zccSKXhTo5Je" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Deferred tax asset</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">8,360</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,360</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Deferred tax liabilities:</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--DeferredTaxLiabilitiesRightOfUseAsset_iI_pn3n3_maDITLzOSa_zn7klabrMTCe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Right of Use Asset</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,036</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,207</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DeferredTaxLiabilitiesPropertyPlantAndEquipment_iI_pn3n3_maDITLzOSa_zTxGuw75lfQg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Fixed assets and intangibles</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">606</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--DeferredIncomeTaxLiabilities_iTI_pn3n3_mtDITLzOSa_ziGlxXHYCOCk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Deferred tax liability</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,036</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,813</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_400_ecustom--DeferredTaxAssets_iI_pn3n3_maDTALNzrPc_zc34cREJbJyk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net deferred tax asset (liability)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">7,324</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(453</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsValuationAllowance_iNI_pn3n3_di_msDTALNzrPc_zKHxYpivjkAh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Valuation Allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(7,324</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsLiabilitiesNet_iNTI_di_mtDTALNzrPc_zYhEPi0p25He" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Net deferred tax asset</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(453</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> </table>

1071000 1221000

139000

35000

506000

75000

59000

200000

25000

1595000 960000

3727000

62000

45000

8360000

1360000

1036000 1207000

606000

1036000

1813000

7324000 -453000

7324000

453000

Reconciliation between the effective tax rate on income from continuing operations and the statutory rate for the years ended December 31, 2022 and 2021, are as follows: SCHEDULE OF RECONCILIATION BETWEEN THE EFFECTIVE TAX RATE ON INCOME FROM CONTINUING OPERATIONS AND THE STATUTORY RATE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Tax</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Percentage</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Tax</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Percentage</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 44%; text-align: left">Book income (loss) before taxes</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate_pn3n3_c20220101__20221231_zYCRu6NJSPo8" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, tax">(8,459</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_pid_dp_c20220101__20221231_z5ZNlPF6L587" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, percent">21.00%</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td> <td id="xdx_98F_eus-gaap--IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate_pn3n3_c20210101__20211231_ztmtY1LnGj8d" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, tax">1,249</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td> <td id="xdx_98E_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_pid_dp_c20210101__20211231_z14Pmu8VeYF6" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Book income (loss) before taxes, percent">21.00%</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Permanent differences (transaction costs)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCosts_pn3n3_c20220101__20221231_zCP1P3GYv4mh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), tax">2,185</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCostsPercent_pid_dp_c20220101__20221231_zR4ehKgazkT8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), percent">(5.42)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_983_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCosts_pn3n3_c20210101__20211231_z85LOTt2xUYh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), tax">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_986_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesTransactionCostsPercent_pid_dp_c20210101__20211231_zJJHj9DtJWw1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (transaction costs), percent">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Permanent differences (warrants)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrants_pn3n3_c20220101__20221231_zIPbAbWl59sl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), tax">(1,144</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrantsPercent_pid_dp_c20220101__20221231_ziatu3OsIcvk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), percent">2.84%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98D_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrants_pn3n3_c20210101__20211231_zcWeNVuSXL67" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), tax">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_989_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesWarrantsPercent_pid_dp_c20210101__20211231_z3q3VbK9YxX8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (warrants), percent">-</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Permanent differences (other -other than tax)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTax_pn3n3_c20220101__20221231_zYrJSFtvxRG5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), tax">458</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTaxPercent_pid_dp_c20220101__20221231_z5vRqsOdN0Ne" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), percent">(1.14)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_986_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTax_pn3n3_c20210101__20211231_ztW1yK54P9s5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), tax">188</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98B_ecustom--EffectiveIncomeTaxRateReconciliationPermanentDifferencesOtherThanTaxPercent_pid_dp_c20210101__20211231_zTLiKolZsq87" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Permanent differences (other -other than tax), percent">3.16%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">State taxes, net</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--IncomeTaxReconciliationStateAndLocalIncomeTaxes_pn3n3_c20220101__20221231_zjWwqF9Jo2v8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, tax">(722</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_pid_dp_c20220101__20221231_zPRQdU5mPLPi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, percent">1.79%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_989_eus-gaap--IncomeTaxReconciliationStateAndLocalIncomeTaxes_pn3n3_c20210101__20211231_zz3wU6kwPcXf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, tax">128</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98F_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_pid_dp_c20210101__20211231_ztIyyYrCu5R9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="State taxes net, percent">2.15%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Deferred true-up</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUp_pn3n3_c20220101__20221231_zPCEcvae6WWc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, tax">(288</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUpPercent_pid_dp_c20220101__20221231_zFfMn6Mc2jyl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, percent">0.71%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98A_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUp_pn3n3_c20210101__20211231_zlyBrqG8vss5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, tax">56</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_985_ecustom--EffectiveIncomeTaxRateReconciliationDeferredTrueUpPercent_pid_dp_c20210101__20211231_zUjKQxdAZm1j" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Deferred true-up, percent">0.94%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development credits</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_ecustom--EffectiveIncomeTaxRateReconciliationResearchAndDevelopmentCredits_pn3n3_c20220101__20221231_zpSERUHbXA6f" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Research and development credits, tax">(200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_ecustom--EffectiveIncomeTaxRateReconciliationResearchAndDevelopmentCreditsPercent_pid_dp_c20220101__20221231_z79QhFO9CvZa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Research and development credits, percent">0.50%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Uncertain tax positions</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositions_pn3n3_c20220101__20221231_zBQbLVd7BW28" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, tax">128</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositionsPercent_pid_dp_c20220101__20221231_zpd8a5fzNSwi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, percent">(0.32)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_980_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositions_pn3n3_c20210101__20211231_zHMXBbWCfyAi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, tax">(19</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_983_ecustom--EffectiveIncomeTaxRateReconciliationUncertainTaxPositionsPercent_pid_dp_c20210101__20211231_zoWj82q9FAR7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Uncertain tax positions, percent">(0.32)%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Other</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--IncomeTaxReconciliationOtherAdjustments_pn3n3_c20220101__20221231_zlhI65no4i41" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, tax">9</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--EffectiveIncomeTaxRateReconciliationOtherAdjustments_pid_dp_c20220101__20221231_zJAgKxQrvBHi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, percent">(0.02)%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98E_eus-gaap--IncomeTaxReconciliationOtherAdjustments_pn3n3_c20210101__20211231_z2lLIhGxM2W2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, tax">9</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_985_eus-gaap--EffectiveIncomeTaxRateReconciliationOtherAdjustments_pid_dp_c20210101__20211231_zJG9XsyyoA07" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Other, percent">0.15%</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Change in valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance_pn3n3_c20220101__20221231_z7vdbo73P8n6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, tax">7,324</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--EffectiveIncomeTaxRateReconciliationChangeInDeferredTaxAssetsValuationAllowance_pid_dp_c20220101__20221231_zxT5qRYbLho4" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, percent">(18.18)%</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_988_eus-gaap--IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance_pn3n3_c20210101__20211231_zrp909mGdKM7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, tax">-</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td> <td id="xdx_98F_eus-gaap--EffectiveIncomeTaxRateReconciliationChangeInDeferredTaxAssetsValuationAllowance_pid_dp_c20210101__20211231_zVpnu8wBHwAl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Change in valuation allowance, percent">-</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; padding-left: 10pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--IncomeTaxExpenseBenefit_pn3n3_c20220101__20221231_zdE61Zxhe81d" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total, tax">(709</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right" title="Book income (loss) before taxes, percent"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif">$</td> <td id="xdx_980_eus-gaap--IncomeTaxExpenseBenefit_pn3n3_c20210101__20211231_z5rSM2MqDkl8" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total, tax">1,611</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; padding-left: 20pt; text-align: left">Effective tax rate</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right" title="Federal income tax provision at statutory rates"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_pid_dp_c20220101__20221231_zhLDOby0QE7l" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Effective tax rate, percent">1.76%</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td id="xdx_988_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_pid_dp_c20210101__20211231_zan3Bv4iYimk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Effective tax rate, percent">27.08%</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> </table>

-8459000

0.2100

1249000

0.2100

2185000 -0.0542 -1144000 0.0284 458000 -0.0114 188000 0.0316

-722000

0.0179

128000

0.0215

-288000 0.0071 56000 0.0094 -200000 0.0050 128000 -0.0032 -19000 -0.0032

9000

-0.0002

9000

0.0015

7324000

-0.1818

-709000

1611000

0.0176

0.2708

16140000

0.80

6747000

200

2042

7324000

The roll-forward of the Company’s gross uncertain tax positions is as follows: SCHEDULE OF GROSS UNCERTAIN TAX POSITIONS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Gross Uncertain Tax Position</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 78%">Balance January 1, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--UnrecognizedTaxBenefits_iS_pn3n3_c20210101__20211231_z2K3Z6Xnx3s8" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Balance January 1, 2021">19</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Additions for current year tax positions</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions_pn3n3_c20210101__20211231_zJomcofNQUr8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Additions for current year tax positions">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Reductions for prior year tax positions</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions_iN_pn3n3_di_c20210101__20211231_zljkz3657TX3" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Reductions for prior year tax positions">(19</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Balance- December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--UnrecognizedTaxBenefits_iS_pn3n3_c20220101__20221231_zB6IuhY2mWVb" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Balance- December 31, 2021">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Additions for current year tax positions</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions_pn3n3_c20220101__20221231_z2BSF9pzfUgc" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Additions for current year tax positions">128</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Balance- December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--UnrecognizedTaxBenefits_iE_pn3n3_c20220101__20221231_z8uTcvIhnsNf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Balance- December 31, 2022">128</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

19000

128000

Note 10 – ASSET PURCHASE AGREEMENT Bourns Productions, Inc. On January 1, 2022, the Company entered into an asset purchase agreement (the “APA”) with Bourns Productions, Inc., a Nevada corporation (“Bourns Productions”), pursuant to which the Company acquired machinery, equipment and a lease for a podcast studio from Bourns Production Productions as set forth in the APA for a purchase price of $<span id="xdx_90C_eus-gaap--AssetAcquisitionConsiderationTransferred_pn3n3_c20220101__20220101__us-gaap--AssetAcquisitionAxis__custom--BournsProductionIncMember_zyE057fq8si9" title="Purchase price for acquiring machinery and equipment">197 which approximated fair market value. 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 (“Thomason Jones”), whereby the Company acquired inventory and intellectual property assets for $<span id="xdx_908_eus-gaap--AssetAcquisitionConsiderationTransferred_pn3n3_c20220401__20220430__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember__srt--RangeAxis__srt--MaximumMember_zSXC9RMXkuZ5" title="Purchase price for acquiring machinery and equipment">444 cash plus contingent payments of $<span id="xdx_905_eus-gaap--AssetAcquisitionConsiderationTransferredContingentConsideration_pn3n3_c20220401__20220430__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember_zAw4uwXSr0Sa" title="Contingent payments">1,000 each to William Thomason and Richard Jones (the “Earn Out”). The Company determined the contingent consideration to be recognized as contingent compensation to Mr. Thomason and Mr. Jones. The entire purchase price of $<span id="xdx_900_eus-gaap--AssetAcquisitionConsiderationTransferred_pn3n3_c20220101__20221231__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember_zBrCxtXXt1pl" title="Purchase price for acquiring machinery and equipment">444 was allocated to inventory. Contingent Compensation If, within twenty-four months of the Agreement the Company realizes $3,000 in gross sales of product either (a) sold under the Wakespeed brand and/or (b) which incorporates any portion of Purchased IP as listed within the agreement, then the Company will pay to Thomason Jones each the amount of $<span id="xdx_907_eus-gaap--OtherLiabilities_iI_pn3n3_c20221231__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember__us-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_z8bLpnD81Wjb" title="Repayment to related party">1,000 as soon as reasonably practicable. This payment may be made in cash or common stock, in the sole discretion of the Company. As a result, the Company determined that a liability should be recorded ratably over the 24 month period. The Company recognized expenses in the fourth quarter related to the contingent payment as no accrual was recorded from the date of the agreement through September 30, 2022. The Company recognized immediate compensation expense within sales and marketing of $417 on October 1, 2022 for amounts that should have been accrued for during the period April 2022 through September 2022. In October 2022, the Company determined the sales goals will most likely be achieved within 18 months. As a result, the Company changed its estimate prospectively and accelerated the accrual as if the sales goals would be achieved within an 18 month period from the date of acquisition. As a result, the Company recorded a cumulative accrual in the amount of $782 as of December 31, 2022.

197000

444000

1000000

444000

3000000

1000000

417000

782000

Note 11 - RELATED PARTY The Company loaned its Chief Financial Officer $<span id="xdx_90D_eus-gaap--RelatedPartyTransactionAmountsOfTransaction_pn3n3_c20220101__20221231__us-gaap--RelatedPartyTransactionAxis__custom--PromissoryNoteWithRelatedPartyMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefFinancialOfficerMember_zwlKDfXkDK39" title="Repayment amount owned">469 to repay amounts owed by him to his former employer and entered into a related Promissory Note with a maturity date of March 1, 2026. The loan was forgiven in full in March of 2022 and was recorded within general and administrative expense. 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 $<span id="xdx_90F_eus-gaap--RelatedPartyTransactionAmountsOfTransaction_pn3n3_c20220101__20221231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefOperatingOfficerMember_zTpeT5E6dK0l" title="Repayment to officer">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. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

469000

100000

1000000

Note 12 - WARRANTS In connection with the merger discussed in Note 3, the Company assumed the outstanding public and private placement warrants of CNTQ. Refer to Note 7 for further description of the warrants issued in connection with the Term Loan. Common Stock Warrants classified as Equity Public Warrants Each Public Warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $11.50 per share. No fractional shares will be issued upon exercise of the Public Warrants. The Company may elect to redeem the Public Warrants subject to certain conditions, in whole and not in part, at a price of $<span id="xdx_906_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_pid_c20221231__us-gaap--ClassOfWarrantOrRightAxis__custom--PublicWarrantsMember_zIjSTAFpawFg" title="Exercise price of warrants">0.01 per Public Warrant if (i) 30 days’ prior written notice of redemption is provided to the holders, and (ii) the last reported sale price of the Company’s common stock equals or exceeds $16.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis. On the Closing Date, there were 9,487,500 Public Warrants issued and outstanding. The Public Warrants are not precluded from equity classification, and are accounted for as such on the date of issuance, and each balance sheet date thereafter. There was no activity of public warrants from the closing date through December 31, 2022. The measurements of the Public Warrants after the detachment of the Public Warrants from the Units are classified as Level 1 due to the use of an observable market quote in an active market under the ticker DFLIW. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value of the Warrants as of each relevant date. Common Stock Warrants classified as Liability Private Placement Warrants The Private Placement 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. On the Closing Date and as of December 31, 2022, there were 4,627,858 Private Warrants issued and outstanding. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) The Company accounts for the <span id="xdx_90E_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20221231__us-gaap--ClassOfWarrantOrRightAxis__custom--PrivateWarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zwO6Waf5Rc7k" title="Warrants outstanding">4,627,858 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. SCHEDULE OF WARRANT CLASSIFICATION AT EACH BALANCE SHEET DATE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Warrant Class</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Inception Date Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Initial Recognition Date</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Exercise Price</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Expiration Date</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 36%; text-align: center">Private Placement Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_985_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zY5vKk38Z7xg" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Number of warrants outstanding">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_ecustom--FairValueOfInitialPeriodInWarrants_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_z9kFNIf6DRp2" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Fair value">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; width: 10%">10/7/2022</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98E_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zP0Ou7RpGRCg" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: center" title="Exercise price">11.5</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; width: 8%">8/11/2026</td></tr> </table> 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, 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 (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 $10 Warrants were exercised on a cashless basis on October 10, 2022, with the Company agreeing to issue 457,142 shares of common stock in connection with such exercise. The Company concluded the warrants are not considered indexed to the Company’s stock and to be accounted for as liabilities under ASC 815. As such, the estimated fair value is recognized as a liability each reporting period, with changes in the fair value recognized within income each period. The following table provides the significant inputs to the Black-Scholes method for the fair value of the Penny Warrants: SCHEDULE FAIR VALUE WARRANTS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Initial Measurement</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%">Common stock price</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharePrice_iI_pid_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zclNbWAhEp63" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Common stock price">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--SharePrice_iI_pid_c20221231_zIWGcfKP5e1c" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Common stock price">11.09</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Exercise price</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zvJ84JRhEzQc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zYtmzMUo8AG9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_zozIhIkDDQPi" title="Common stock price">0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_z32BUPw0ueE8" title="Common stock price">0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price"><span id="xdx_908_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember_zCcguI9oAE0g">10</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">9.77</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zt6e8zwg8W62" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">94.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zjuuR6Sf4zOg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">90.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zacTuJSWoDX9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.90%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_z02b7ygIIjl7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.90%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Fair value</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--FairValueOfWarrant_iI_pid_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zFxGBpQHFYxe" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">13.99</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_ecustom--FairValueOfWarrant_iI_pid_c20221231_zUSnIDJqGpJg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">11.89</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) The following table provides the significant inputs to the Black-Scholes method for the fair value of the $10 Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Initial Measurement</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%">Common stock price</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--SharePrice_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zrrgyADWf7bg" style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right" title="Common stock price">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Exercise price</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zgNAQj4eULJ4" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Volatility">10.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_zmp1f5BieeS5" title="Warrant measurement input">0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_906_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember_znAn71qBQSM3">10</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zOjqPVypqqB1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Warrant measurement input">85.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_z8EAoLiYtu55" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Warrant measurement input">4.10%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Fair value</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--FairValueOfWarrant_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember_z2xm3ENvjLBh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair value">10.42</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> The following tables presents a roll-forward of the Company’s warrants from January 1, 2022 to December 31, 2022: SCHEDULE OF ROLL FORWARD IN WARRANTS Private Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20220101__20221231__us-gaap--StatementEquityComponentsAxis__custom--PrivateWarrantsMember_z0I65TZvoXAi" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_402_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zySy81lbO81k" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td id="xdx_F40_zJvK3WPWRUh8" style="font: 10pt Times New Roman, Times, Serif">**Warrants Outstanding, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_409_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsAssumedInMerger_pid_zKT8RXrtoA5j" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">Assumed in the merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zMiiCHWL8M51" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Exercised subsequent to the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zJGsdLGNzZ8e" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Warrants Outstanding, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> **There were no warrants issued, exercised and outstanding prior to January 1, 2022. Public Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_493_20220101__20221231__us-gaap--StatementEquityComponentsAxis__custom--PublicWarrantsMember_zhkmMsXr9Tcl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_408_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zeJHqLHEwJ71" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td id="xdx_F45_zX9S5C9A2Q55" style="font: 10pt Times New Roman, Times, Serif">**Warrants Outstanding, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_409_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsAssumedInMerger_pid_z8qAubIoUJxk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">Assumed in the merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">9,487,500</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zvoqcKLiRVq5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Exercised subsequent to the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_ziUdg2V8x1A8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Warrants Outstanding, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">9,487,500</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> **There were no warrants issued, exercised and outstanding prior to January 1, 2022. Term Loan Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20220101__20221231__us-gaap--StatementEquityComponentsAxis__custom--TermLoanWarrantsMember_zPPWArotxue7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_408_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zZrKDyYMbNb6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">**Warrants Outstanding, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsIssuedInConjunctionWithMerger_pid_zQOAZ2EJFWn2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">Issued in conjunction with merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">4,193,056</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_z3mBAx3RFqgl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Exercised subsequent to the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,600,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_z2FcKihtBDNc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Warrants Outstanding, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,593,056</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">**</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">There were no warrants issued, exercised and outstanding prior to January 1, 2022.</td> </tr></table> The following table presents a roll-forward of the aggregate fair values of the Company’s warrant liabilities for which fair value is determined by Level 3 Inputs. The only class of warrants that were determined to be Level 3 are the term loan warrants. <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_490_20220101__20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zxxaoTQzR105" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Warrant Liability</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_406_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iS_pn3n3_zrlgM9Ew0OVl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 78%">Balances, January 1, 2022**</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right; width: 18%">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%"> </td></tr> <tr id="xdx_406_ecustom--IssuanceOfWarrants_pn3n3_zIorZ039hfQh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Issuance of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">52,956</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--ExerciseOfWarrants_iN_pn3n3_di_zwS56EcafScg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(16,669</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--FairValueAdjustmentOfWarrants_iN_pn3n3_di_zBD9EIoGWC8c" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Change in fair value of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(5,446</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iE_pn3n3_z7uiFuDaC8u3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">**</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">There were no warrants issued, exercised and outstanding prior to January 1, 2022.</td> </tr></table> DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

11.50

0.01

16.00

9487500

4627858

SCHEDULE OF WARRANT CLASSIFICATION AT EACH BALANCE SHEET DATE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Warrant Class</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Inception Date Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Initial Recognition Date</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Exercise Price</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Expiration Date</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 36%; text-align: center">Private Placement Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_985_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zY5vKk38Z7xg" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Number of warrants outstanding">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_ecustom--FairValueOfInitialPeriodInWarrants_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_z9kFNIf6DRp2" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Fair value">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; width: 10%">10/7/2022</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98E_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zP0Ou7RpGRCg" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: center" title="Exercise price">11.5</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; width: 8%">8/11/2026</td></tr> </table>

4627858

1990 2022-10-07

11.5

2026-08-11

2593056

1600000

457142

The following table provides the significant inputs to the Black-Scholes method for the fair value of the Penny Warrants: SCHEDULE FAIR VALUE WARRANTS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Initial Measurement</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%">Common stock price</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharePrice_iI_pid_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zclNbWAhEp63" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Common stock price">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--SharePrice_iI_pid_c20221231_zIWGcfKP5e1c" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Common stock price">11.09</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Exercise price</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zvJ84JRhEzQc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zYtmzMUo8AG9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_zozIhIkDDQPi" title="Common stock price">0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_z32BUPw0ueE8" title="Common stock price">0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price"><span id="xdx_908_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember_zCcguI9oAE0g">10</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">9.77</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zt6e8zwg8W62" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">94.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zjuuR6Sf4zOg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">90.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zacTuJSWoDX9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.90%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_z02b7ygIIjl7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.90%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Fair value</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--FairValueOfWarrant_iI_pid_c20221231__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zFxGBpQHFYxe" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">13.99</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_ecustom--FairValueOfWarrant_iI_pid_c20221231_zUSnIDJqGpJg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">11.89</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) The following table provides the significant inputs to the Black-Scholes method for the fair value of the $10 Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Initial Measurement</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%">Common stock price</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--SharePrice_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zrrgyADWf7bg" style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right" title="Common stock price">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Exercise price</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zgNAQj4eULJ4" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Volatility">10.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_zmp1f5BieeS5" title="Warrant measurement input">0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_906_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember_znAn71qBQSM3">10</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zOjqPVypqqB1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Warrant measurement input">85.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_z8EAoLiYtu55" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Warrant measurement input">4.10%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Fair value</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--FairValueOfWarrant_iI_pid_c20221231__us-gaap--StatementEquityComponentsAxis__custom--TenWarrantsMember__srt--StatementScenarioAxis__custom--InitialMeasurementMember_z2xm3ENvjLBh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair value">10.42</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table>

14.00

11.09

0.01

P10Y

P9Y9M7D

94.00

90.00

3.90

13.99 11.89

14.00

10.00

P10Y

85.00

4.10

10.42

The following tables presents a roll-forward of the Company’s warrants from January 1, 2022 to December 31, 2022: SCHEDULE OF ROLL FORWARD IN WARRANTS Private Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20220101__20221231__us-gaap--StatementEquityComponentsAxis__custom--PrivateWarrantsMember_z0I65TZvoXAi" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_402_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zySy81lbO81k" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td id="xdx_F40_zJvK3WPWRUh8" style="font: 10pt Times New Roman, Times, Serif">**Warrants Outstanding, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_409_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsAssumedInMerger_pid_zKT8RXrtoA5j" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">Assumed in the merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zMiiCHWL8M51" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Exercised subsequent to the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zJGsdLGNzZ8e" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Warrants Outstanding, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> **There were no warrants issued, exercised and outstanding prior to January 1, 2022. Public Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_493_20220101__20221231__us-gaap--StatementEquityComponentsAxis__custom--PublicWarrantsMember_zhkmMsXr9Tcl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_408_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zeJHqLHEwJ71" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td id="xdx_F45_zX9S5C9A2Q55" style="font: 10pt Times New Roman, Times, Serif">**Warrants Outstanding, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_409_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsAssumedInMerger_pid_z8qAubIoUJxk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">Assumed in the merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">9,487,500</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zvoqcKLiRVq5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Exercised subsequent to the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_ziUdg2V8x1A8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Warrants Outstanding, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">9,487,500</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> **There were no warrants issued, exercised and outstanding prior to January 1, 2022. Term Loan Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20220101__20221231__us-gaap--StatementEquityComponentsAxis__custom--TermLoanWarrantsMember_zPPWArotxue7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_408_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zZrKDyYMbNb6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">**Warrants Outstanding, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsIssuedInConjunctionWithMerger_pid_zQOAZ2EJFWn2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%; text-align: left">Issued in conjunction with merger</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">4,193,056</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_z3mBAx3RFqgl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Exercised subsequent to the merger</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,600,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_z2FcKihtBDNc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Warrants Outstanding, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,593,056</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">**</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">There were no warrants issued, exercised and outstanding prior to January 1, 2022.</td> </tr></table> The following table presents a roll-forward of the aggregate fair values of the Company’s warrant liabilities for which fair value is determined by Level 3 Inputs. The only class of warrants that were determined to be Level 3 are the term loan warrants. <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_490_20220101__20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zxxaoTQzR105" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Warrant Liability</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_406_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iS_pn3n3_zrlgM9Ew0OVl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 78%">Balances, January 1, 2022**</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right; width: 18%">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%"> </td></tr> <tr id="xdx_406_ecustom--IssuanceOfWarrants_pn3n3_zIorZ039hfQh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Issuance of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">52,956</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--ExerciseOfWarrants_iN_pn3n3_di_zwS56EcafScg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(16,669</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--FairValueAdjustmentOfWarrants_iN_pn3n3_di_zBD9EIoGWC8c" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Change in fair value of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(5,446</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iE_pn3n3_z7uiFuDaC8u3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">**</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">There were no warrants issued, exercised and outstanding prior to January 1, 2022.</td> </tr></table>

4627858

9487500

4193056

1600000

2593056

52956000 16669000

5446000

30841000

Note 13 - COMMON STOCK The Company is authorized to issue up to 170,000,000 shares of common stock with $0.0001 par value. Common stockholders are entitled to dividends if and when declared by the Board of Directors subject to the rights of the preferred stockholders. As of December 31, 2022 and 2021, there were 43,272,728 and 36,496,998 shares issued and outstanding retroactively adjusted and no dividends on common stock had been declared by the Company. On June 12, 2022, Dragonfly entered into a Stock Purchase Agreement with THOR Industries, whereby THOR purchased shares of Dragonfly common stock for $15,000 in cash. The Stock Purchase agreement was issued in connection with a binding agreement among the parties whereby the parties would use commercially reasonable efforts to enter into a mutually agreed distribution and joint development agreement. The final terms of the agreement have not yet been determined. As of December 31, 2022 and 2021, the Company had reserved shares of common stock for issuance as follows: SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20221231_zL5DtuKjpYPk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20211231_zfBN2IuuEw47" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iI_pid_zkoHCTGpjK9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left">Options issued and outstanding</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CommonStockSharesOutstanding_iI_pid_zS0Q6n7xZsd9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Common stock outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">43,272,728</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,496,998</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_zoRlZWwws2xc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Warrants outstanding</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">16,708,414</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--EarnoutShares_iI_pid_zT4x5GJUCF24" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Earnout shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">40,000,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_iI_pid_zTPKFKjNLIJi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Shares available for future issuance 1</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,924,914</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">12,207</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--CommonStockCapitalSharesReservedForFutureIssuance_iTI_pid_zucF7GImkzU2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">108,549,014</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">40,200,160</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 5pt"/><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Refer to Stock Incentive Plan amendment at Note 14</td> </tr></table> ChEF Equity Facility The Company and CCM LLC entered into a purchase agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “ChEF RRA”) in connection with the merger. Pursuant to the Purchase Agreement, the Company has the right to sell to CCM LLC an amount of shares of common stock, up to a maximum aggregate purchase price of $<span id="xdx_90E_ecustom--PlanOfMergerMaximumAggregatePurchasePrice_c20220101__20221231__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember__srt--RangeAxis__srt--MaximumMember_zD7DCsuTcSn8" title="Aggregated purchase price">150,000, from time to time, pursuant to the terms of the Purchase Agreement. Pursuant to, on the terms of, and subject to the satisfaction of the conditions in the Purchase Agreement, including the filing and effectiveness of a registration statement registering the resale by CCM LLC of the shares of common stock issued to it under the Purchase Agreement, the Company will have the right from time to time at its option to direct CCM LLC to purchase up to a specified maximum amount of shares of common stock, up to a maximum aggregate purchase price of $<span id="xdx_906_ecustom--PlanOfMergerMaximumAggregatePurchasePrice_c20220101__20221231__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember__dei--LegalEntityAxis__custom--CCMLLCMember__srt--RangeAxis__srt--MaximumMember_zrwztjYl0vWi" title="Aggregated purchase price">150,000, over the term of the equity facility (“ChEF Equity Facility”). Under the terms of the Purchase Agreement, CCM LLC will not be obligated to (but may, at its option, choose to) purchase shares of common stock to the extent the number of shares to be purchased would exceed the lowest of the number of shares of common stock (i) <span id="xdx_902_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardTermsOfAward_c20220101__20221231__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember__dei--LegalEntityAxis__custom--CCMLLCMember_zzRDvahccRGb">which would result in beneficial ownership (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) by CCM LLC, together with its affiliates, of more than 9.9%, (ii) which would cause the aggregate purchase price on the applicable VWAP Purchase Date (as defined in the Purchase Agreement) for such purchases to exceed $3,000 and (iii) equal to 20% of the total number of shares of common stock that would count towards VWAP on the applicable Purchase Date of such purchase. The net proceeds from any sales under the Purchase Agreement will depend on the frequency with, and prices at, which shares of common stock are sold to CCM LLC. To the extent the Company sells shares of common stock under the Purchase Agreement, it currently plans to use any proceeds therefrom for working capital and other general corporate purposes. In addition, pursuant to the ChEF RRA, the Company has agreed to provide CCM LLC with certain registration rights with respect to the shares of common stock issued subject to the Purchase Agreement. The Purchase Agreement will automatically terminate on the earliest to occur of (i) the 36-month anniversary of the later of (x) the closing of the merger and (y) effective date of the Initial Registration Statement (as defined in the Purchase Agreement), (ii) the date on which CCM LLC shall have purchased 150,000,000 of shares of common stock pursuant to the Purchase Agreement, (iii) the date on which common stock shall have failed to be listed or quoted on Nasdaq or any successor principal market and (iv) the commencement of certain bankruptcy proceedings or similar transactions with respect to the Company or all or substantially all of its property. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

170000000

0.0001

43272728

36496998

15000000

As of December 31, 2022 and 2021, the Company had reserved shares of common stock for issuance as follows: SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20221231_zL5DtuKjpYPk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20211231_zfBN2IuuEw47" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iI_pid_zkoHCTGpjK9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left">Options issued and outstanding</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CommonStockSharesOutstanding_iI_pid_zS0Q6n7xZsd9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Common stock outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">43,272,728</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,496,998</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_zoRlZWwws2xc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Warrants outstanding</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">16,708,414</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--EarnoutShares_iI_pid_zT4x5GJUCF24" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Earnout shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">40,000,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_iI_pid_zTPKFKjNLIJi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Shares available for future issuance 1</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,924,914</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">12,207</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--CommonStockCapitalSharesReservedForFutureIssuance_iTI_pid_zucF7GImkzU2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">108,549,014</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">40,200,160</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 5pt"/><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Refer to Stock Incentive Plan amendment at Note 14</td> </tr></table>

3642958

3690955

43272728

36496998

16708414

40000000

4924914

12207

108549014

40200160

150000 150000

which would result in beneficial ownership (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) by CCM LLC, together with its affiliates, of more than 9.9%, (ii) which would cause the aggregate purchase price on the applicable VWAP Purchase Date (as defined in the Purchase Agreement) for such purchases to exceed $3,000 and (iii) equal to 20% of the total number of shares of common stock that would count towards VWAP on the applicable Purchase Date of such purchase

the 36-month anniversary of the later of (x) the closing of the merger and (y) effective date of the Initial Registration Statement (as defined in the Purchase Agreement), (ii) the date on which CCM LLC shall have purchased 150,000,000 of shares of common stock pursuant to the Purchase Agreement, (iii) the date on which common stock shall have failed to be listed or quoted on Nasdaq or any successor principal market and (iv) the commencement of certain bankruptcy proceedings or similar transactions with respect to the Company or all or substantially all of its property.

Note 14 - STOCK-BASED COMPENSATION On August 12, 2019, the Board of Directors approved the 2019 Stock Incentive Plan (the “2019 Plan”) with a term of <span id="xdx_900_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardExpirationPeriod_dc_c20190812__20190812__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandNineteenPlanMember_zTORKaMsdnya" title="Term of plan">ten years. The Plan was administered by the Board of Directors, which was authorized to grant, at its discretion, awards to employees, directors, and consultants. The maximum number of common shares that were reserved for grants of awards under the Plan was <span id="xdx_90D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized_iI_pid_c20190812__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandNineteenPlanMember_zPkfhvnkeUz6" title="Maximum number of common shares reserved for grants">3,000,000 shares. The Plan provided for the grant of stock options (both incentive stock options and nonqualified stock options), and the grants and sale of restricted stock units (“RSUs”). Shares issued under this Plan may be drawn from authorized and unissued shares, or shares reacquired by the Company. In July of 2021, the Board of Directors approved the 2021 Stock Incentive Plan (the “2021 Plan” and, together with the 2019 Plan, the “Prior Plans”) with a term of <span id="xdx_90C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardExpirationPeriod_dc_c20210701__20210731__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyOnePlanMember_zFkkKqqPqvq5" title="Term of plan">ten years. The Plan was administered by the Board of Directors, which was authorized to grant, at its discretion, awards to employees, directors, and consultants. The maximum number of common shares reserved for grants of awards under the Plan was <span id="xdx_900_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized_iI_pid_c20210731__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyOnePlanMember_zakeAnBhCcd2" title="Maximum number of common shares reserved for grants">1,000,000 shares which was amended and increased to <span id="xdx_90F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized_iI_pid_c20220531__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyOnePlanMember_zBAr8VJVNW0d" title="Maximum number of common shares reserved for grants">2,000,000 in May of 2022. The Plan provides for the grant of stock options (both incentive stock options and nonqualified stock options), and the grants and sale of RSUs. Shares issued under this Plan may be drawn from authorized and unissued shares, or shares reacquired by the Company. In connection with the merger, shareholders and board members approved the 2022 Equity Incentive Plan (the “2022 Plan”). A total of <span id="xdx_907_eus-gaap--CommonStockCapitalSharesReservedForFutureIssuance_iI_pid_c20221231__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyTwoPlanMember_zrpI5bPiJVx4" title="Common stock reserved for issuance">2,785,950 shares of common stock was initially reserved for issuance under the 2022 Plan, with the potential for additional shares to be issued under the plan. The 2022 Plan replaced the Prior Plans, which the Company assumed in the merger. Following the Closing, no additional awards will be granted under the Prior Plans, although all stock awards granted under the Prior Plans that are outstanding immediately prior to the Closing will be assumed by the Company and continue to be subject to the terms and conditions as set forth in the agreements evidencing such stock awards and the terms of the applicable Prior Plan. If an incentive award granted under the 2022 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for future awards under the 2022 Plan. The number of shares subject to the 2022 Plan, and the number of shares and terms of any Incentive Award may be adjusted in the event of any change in our outstanding common stock by reason of any stock dividend, spin-off, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares, or similar transaction. 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 <span id="xdx_905_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20220101__20221231__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyTwoPlanMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zJqckKyrW9m3" title="Issuance of shares">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) <span id="xdx_90B_ecustom--OutstandingSharesPercentage_pid_dp_uPure_c20210101__20211231__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyTwoPlanMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zIGyHucutOXj" title="Outstanding shares percentage">1% of the total number of outstanding shares of our common stock on December 31 in the prior year, (2) <span id="xdx_906_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20210101__20211231__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyTwoPlanMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zUeQ9oeFXYUh" title="Issuance of shares">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: SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Options(1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted- Average Exercise Price</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted- Average Grant Date Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted- Average Remaining Contractual Life (in years)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Aggregate Intrinsic value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 30%; text-align: justify">Balances, January 1, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20210101__20211231_fKDEp_zx7Gnqyfqqqd" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Number of Options, Balance at the beginning">3,029,791</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20210101__20211231_zva5spU0Cowg" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning"> 0.45</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20210101__20211231_zCJI7E6hsEUc" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning">0.72</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right"><span id="xdx_90D_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20210101__20211231_z7yp3htVPBod" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">7.92</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iS_pn3n3_c20210101__20211231_za7mB49gb9g9" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">651</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20210101__20211231_fKDEp_zYBgorhtCAp5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">2,069,309</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20210101__20211231_zXus81Pe3D1i" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">3.41</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20210101__20211231_zkdZF03I5Fhc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted"> 2.03</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20210101__20211231_zgVda4ISi4Ob" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">3,551</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20210101__20211231_fKDEp_z9PE8aJCxMTk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(421,094</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20210101__20211231_z0xEdZStDh6i" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">1.44</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20210101__20211231_ztm5HiYuMuP9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">1.82</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20210101__20211231_zzueT4aH6JDl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20210101__20211231_fKDEp_z8xP1BiGw5hk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(987,051</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20210101__20211231_zGIvWnOMl6w7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">0.51</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20210101__20211231_zQ10CBIZP4Mf" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">0.53</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20210101__20211231_zECeP2tOhhf2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">442</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20210101__20211231_fKDEp_zZKsPU5fBvcl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20210101__20211231_zv4wCC40abjk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">1.98</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20210101__20211231_zpMTp5vIDqU3" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value,Balances at the end">1.38</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20210101__20211231_z1f0z51eVZR" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">8.52</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iE_pn3n3_c20210101__20211231_zS1sDCcMGwD1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">6,550</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20220101__20221231_fKDEp_zJbSY22cd2Ql" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the beginning">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20220101__20221231_zwP4k3xRVB2g" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning">1.98</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20220101__20221231_zjD0jbmW8jD" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning">1.38</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_904_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20220101__20221231_zWAhvqC1Kcjk" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">8.52</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iS_pn3n3_c20220101__20221231_zzcM6dzwJYk7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">6,550</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20220101__20221231_fKDEp_zddsMSZTp3Q6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">572,428</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20220101__20221231_z7VWyYiXrtUa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">3.46</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20221231_z68F6TnpACMi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted">1.57</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20220101__20221231_zP4T2Nki9Uoc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20220101__20221231_fKDEp_z3cQJeKD6OS6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(39,074</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20220101__20221231_zXvsFWaYr9Vl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">3.13</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20220101__20221231_zBIqHz58OQO6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">1.73</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20220101__20221231_zkvZUwvMgm51" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20220101__20221231_fKDEp_zecdGDNctLgh" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(581,351</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20220101__20221231_zuCgUzmwtJB2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">1.16</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20220101__20221231_zCW7XFOWqqJ3" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">0.89</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20220101__20221231_zYTTvkCVQJdg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20220101__20221231_fKDEp_zhUqCxpUoE75" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20220101__20221231_zGbnhsypj75f" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">2.02</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20220101__20221231_zDLtbixxnAuj" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the end">1.21</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20220101__20221231_zC6hvPCcU39k" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">7.90</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iE_pn3n3_c20220101__20221231_zv82dBIwZjTf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">35,898</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">At December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and Exercisable</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iE_pid_c20220101__20221231_fKDEp_zu2YJzAsJ8p6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and Exercisable">1,646,304</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageExercisePrice_iE_pid_c20220101__20221231_zi10PjZHuj7d" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and Exercisable">1.48</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_902_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageRemainingContractualTerm1_dtY_c20220101__20221231_zjGaXGxOJwac" style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.13</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableAggregateIntrinsicValue_iE_pn3n3_c20220101__20221231_zAllxuFFbZgg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and Exercisable">17,114</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and expected to vest</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingNumber_iE_pid_c20220101__20221231_fKDEp_zwrLtysv6zo9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and expected to vest">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageExercisePrice_iE_pid_c20220101__20221231_zY1t6Ut4G24b" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and expected to vest (in dollars per share)">2.02</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_903_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1_dtY_c20220101__20221231_z8S09rHjTimf" style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.90</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue_iE_pn3n3_c20220101__20221231_zWFA71qH6Og1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and expected to vest">35,898</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 5pt"/><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately <span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNDSEVEVUxFIE9GIE9QVElPTiBBQ1RJVklUWSBBTkQgUkVMQVRFRCBJTkZPUk1BVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90C_eus-gaap--StockholdersEquityNoteStockSplitConversionRatio1_pip0_uPure_c20220101__20221231_zQptu5tY8MGi" title="Stock option exchange ratio"><span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNDSEVEVUxFIE9GIE9QVElPTiBBQ1RJVklUWSBBTkQgUkVMQVRFRCBJTkZPUk1BVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_909_eus-gaap--StockholdersEquityNoteStockSplitConversionRatio1_pip0_uPure_c20210101__20211231_z9f23aDzzGse" title="Stock option exchange ratio">1.182 as a result of the merger. See Note 3 for further information.</td> </tr></table> Share-based compensation expense for options and RSUs totaling $2,467 and $734 was recognized in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Of the $2,467 of share-based compensation incurred during the year ended December 31, 2022, $155 is allocated to cost of goods sold, $<span id="xdx_900_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_zhSepuA7oqja" title="Total compensation">149 to research and development, $<span id="xdx_905_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zKRMjgxudZde" title="Total compensation">654 to selling and marketing, and $<span id="xdx_90B_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20220101__20221231__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zfHxySRZStk7" title="Total compensation">1,509 to general and administrative expenses. Of the $734 of share-based compensation incurred during the year ended December 31, 2021, $252 is allocated to cost of goods sold, $<span id="xdx_90D_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_zjKdg25U4S3l" title="Total compensation">95 to research and development, $<span id="xdx_903_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zwEE3iDLJ2y3" title="Total compensation">156 to selling and marketing, and $<span id="xdx_902_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20210101__20211231__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zD4stVjgxWJc" title="Total compensation">231 to general and administrative expenses. As of December 31, 2022, there were <span id="xdx_907_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_iI_pid_c20221231__us-gaap--PlanNameAxis__custom--StockIncentiveTwoThousandTwentyTwoPlanMember_zM9uMbjrpeAe"/>4,924,914 shares of unissued authorized and available for future awards under the plans. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) The valuation methodology used to determine the fair value of the options issued during the year was the Black Scholes option pricing model. The Black Scholes model requires the use of a number of assumptions including volatility of the stock price, the fair value of the underlying stock, the average risk free interest rate, and the weighted average expected life of the options. The expected term was estimated using the simplified method due to lack of sufficient history of option exercises. SCHEDULE OF VALUATION ASSUMPTIONS OF OPTIONS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%">Weighted average fair value of options granted</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_pid_c20221231_zrvtkipNE9b4" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Weighted average fair value of options granted">1.57</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_pid_c20211231_zB2AwExTduY3" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Weighted average fair value of options granted">2.05</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free interest rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pid_dp_uPure_c20220101__20221231_zUxHNauqtdma" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Risk-free interest rate">2.71%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pid_dp_uPure_c20210101__20211231_zH4Z7iyhtPy" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Risk-free interest rate">1.08%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pid_dp_uPure_c20220101__20221231_zHmzPHYmyyT4" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Volatility">45.0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pid_dp_uPure_c20210101__20211231_zR3FGMmfNBii" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Volatility">52.6%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected life (years)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.68</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">6.02</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pid_dp_uPure_c20220101__20221231_zhpKO0WGFwGd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Dividend yield">0.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pid_dp_uPure_c20210101__20211231_zor46pYtkuNl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Dividend yield">0.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> Restricted Stock Units On October 7, 2022, the Company granted <span id="xdx_90E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iI_c20221007__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zGOLSGP5CGej" title="Restricted Stock Units">180,000 restricted stock units under the 2022 plan which vest one year from the grant date. The fair value of the restricted stock units on the date of grant was $<span id="xdx_906_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardGross_pn3n3_c20221006__20221007__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zQcvCvH4AnNj" title="Restricted stock units, value">2,520, which is recognized as compensation expense over the requisite service period based on the value of the underlying shares on the date of grant. There were no grants of restricted stock units prior to October 7, 2022. The following table presents the restricted stock units activity for the year ended December 31, 2022: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Fair Market Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Unvested shares, December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iS_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z1Z4RlwR8oyk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares , beginning balance">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zLPbP3UhIae6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value , beginning balance">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; width: 64%; text-align: left">Granted and unvested</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zenG7xvuzOma" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Number of shares granted and unvested">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zNYd63elcWNj" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Weighted average fair market value granted and unvested">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt">Vested</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriod_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zArNZC49uqFg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z2d8F0qksjg2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; padding-bottom: 1.5pt">Forfeited/Cancelled</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedInPeriod_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zcoIRv1qORE7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares forfeited and cancelled">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zi9ufPSOQx31" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value forfeited and cancelled">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Unvested shares, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iE_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zE1UFnA4rela" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares , ending balance">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zPwDIw9mqRAf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value , beginning balance">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Vested as of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zsB7caaXYni1" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares ,vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageFairMarketValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zIYZxWFcGOl2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value,vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

P10Y

3000000

P10Y

1000000

2000000

2785950

2464400

0.01

1500000

A summary of the Company’s option activity and related information follows: SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Options(1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted- Average Exercise Price</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted- Average Grant Date Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted- Average Remaining Contractual Life (in years)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Aggregate Intrinsic value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 30%; text-align: justify">Balances, January 1, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20210101__20211231_fKDEp_zx7Gnqyfqqqd" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Number of Options, Balance at the beginning">3,029,791</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20210101__20211231_zva5spU0Cowg" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning"> 0.45</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20210101__20211231_zCJI7E6hsEUc" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning">0.72</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right"><span id="xdx_90D_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20210101__20211231_z7yp3htVPBod" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">7.92</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iS_pn3n3_c20210101__20211231_za7mB49gb9g9" style="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">651</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20210101__20211231_fKDEp_zYBgorhtCAp5" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">2,069,309</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20210101__20211231_zXus81Pe3D1i" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">3.41</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20210101__20211231_zkdZF03I5Fhc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted"> 2.03</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20210101__20211231_zgVda4ISi4Ob" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">3,551</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20210101__20211231_fKDEp_z9PE8aJCxMTk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(421,094</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20210101__20211231_z0xEdZStDh6i" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">1.44</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20210101__20211231_ztm5HiYuMuP9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">1.82</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20210101__20211231_zzueT4aH6JDl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20210101__20211231_fKDEp_z8xP1BiGw5hk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(987,051</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20210101__20211231_zGIvWnOMl6w7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">0.51</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20210101__20211231_zQ10CBIZP4Mf" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">0.53</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20210101__20211231_zECeP2tOhhf2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">442</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20210101__20211231_fKDEp_zZKsPU5fBvcl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20210101__20211231_zv4wCC40abjk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">1.98</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20210101__20211231_zpMTp5vIDqU3" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value,Balances at the end">1.38</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20210101__20211231_z1f0z51eVZR" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">8.52</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iE_pn3n3_c20210101__20211231_zS1sDCcMGwD1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">6,550</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20220101__20221231_fKDEp_zJbSY22cd2Ql" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the beginning">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20220101__20221231_zwP4k3xRVB2g" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning">1.98</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20220101__20221231_zjD0jbmW8jD" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning">1.38</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_904_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20220101__20221231_zWAhvqC1Kcjk" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">8.52</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iS_pn3n3_c20220101__20221231_zzcM6dzwJYk7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">6,550</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20220101__20221231_fKDEp_zddsMSZTp3Q6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">572,428</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20220101__20221231_z7VWyYiXrtUa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">3.46</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20221231_z68F6TnpACMi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted">1.57</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20220101__20221231_zP4T2Nki9Uoc" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20220101__20221231_fKDEp_z3cQJeKD6OS6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(39,074</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20220101__20221231_zXvsFWaYr9Vl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">3.13</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20220101__20221231_zBIqHz58OQO6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">1.73</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20220101__20221231_zkvZUwvMgm51" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20220101__20221231_fKDEp_zecdGDNctLgh" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(581,351</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20220101__20221231_zuCgUzmwtJB2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">1.16</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20220101__20221231_zCW7XFOWqqJ3" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">0.89</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20220101__20221231_zYTTvkCVQJdg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20220101__20221231_fKDEp_zhUqCxpUoE75" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20220101__20221231_zGbnhsypj75f" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">2.02</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20220101__20221231_zDLtbixxnAuj" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the end">1.21</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20220101__20221231_zC6hvPCcU39k" style="font-family: Times New Roman, Times, Serif; font-size: 10pt" title="Weighted- Average Remaining Contractual Life (in years)">7.90</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionOutstandingIntrinsicValue_iE_pn3n3_c20220101__20221231_zv82dBIwZjTf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">35,898</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">At December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and Exercisable</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iE_pid_c20220101__20221231_fKDEp_zu2YJzAsJ8p6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and Exercisable">1,646,304</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageExercisePrice_iE_pid_c20220101__20221231_zi10PjZHuj7d" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and Exercisable">1.48</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_902_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageRemainingContractualTerm1_dtY_c20220101__20221231_zjGaXGxOJwac" style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.13</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableAggregateIntrinsicValue_iE_pn3n3_c20220101__20221231_zAllxuFFbZgg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and Exercisable">17,114</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and expected to vest</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingNumber_iE_pid_c20220101__20221231_fKDEp_zwrLtysv6zo9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and expected to vest">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageExercisePrice_iE_pid_c20220101__20221231_zY1t6Ut4G24b" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and expected to vest (in dollars per share)">2.02</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_903_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1_dtY_c20220101__20221231_z8S09rHjTimf" style="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.90</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue_iE_pn3n3_c20220101__20221231_zWFA71qH6Og1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and expected to vest">35,898</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 15pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 5pt"/><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately <span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNDSEVEVUxFIE9GIE9QVElPTiBBQ1RJVklUWSBBTkQgUkVMQVRFRCBJTkZPUk1BVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90C_eus-gaap--StockholdersEquityNoteStockSplitConversionRatio1_pip0_uPure_c20220101__20221231_zQptu5tY8MGi" title="Stock option exchange ratio"><span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNDSEVEVUxFIE9GIE9QVElPTiBBQ1RJVklUWSBBTkQgUkVMQVRFRCBJTkZPUk1BVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_909_eus-gaap--StockholdersEquityNoteStockSplitConversionRatio1_pip0_uPure_c20210101__20211231_z9f23aDzzGse" title="Stock option exchange ratio">1.182 as a result of the merger. See Note 3 for further information.</td> </tr></table>

3029791

0.45

0.72

P7Y11M1D 651000

2069309

3.41

2.03

3551000

421094

1.44

1.82

987051

0.51

0.53

442000

3690955

1.98

1.38

P8Y6M7D

6550000

3690955

1.98

1.38

P8Y6M7D 6550000

572428

3.46

1.57

39074

3.13

1.73

581351

1.16

0.89

3642958

2.02

1.21

P7Y10M24D

35898000

1646304

1.48

P7Y1M17D

17114000

3642958

2.02

P7Y10M24D

35898000

1.182

2467000

734000

2467000

155000

149000

654000

1509000

734000

252000

95000

156000

231000

SCHEDULE OF VALUATION ASSUMPTIONS OF OPTIONS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%">Weighted average fair value of options granted</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_pid_c20221231_zrvtkipNE9b4" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Weighted average fair value of options granted">1.57</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExercisePrice_iI_pid_c20211231_zB2AwExTduY3" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Weighted average fair value of options granted">2.05</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free interest rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pid_dp_uPure_c20220101__20221231_zUxHNauqtdma" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Risk-free interest rate">2.71%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate_pid_dp_uPure_c20210101__20211231_zH4Z7iyhtPy" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Risk-free interest rate">1.08%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pid_dp_uPure_c20220101__20221231_zHmzPHYmyyT4" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Volatility">45.0%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate_pid_dp_uPure_c20210101__20211231_zR3FGMmfNBii" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Volatility">52.6%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected life (years)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.68</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">6.02</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pid_dp_uPure_c20220101__20221231_zhpKO0WGFwGd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Dividend yield">0.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate_pid_dp_uPure_c20210101__20211231_zor46pYtkuNl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Dividend yield">0.00%</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table>

1.57

2.05

0.0271

0.0108

0.450

0.526

P5Y8M4D

P6Y7D

0.0000

180000

2520000

There were no grants of restricted stock units prior to October 7, 2022. The following table presents the restricted stock units activity for the year ended December 31, 2022: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Fair Market Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Unvested shares, December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iS_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z1Z4RlwR8oyk" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares , beginning balance">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zLPbP3UhIae6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value , beginning balance">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; width: 64%; text-align: left">Granted and unvested</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zenG7xvuzOma" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Number of shares granted and unvested">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zNYd63elcWNj" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Weighted average fair market value granted and unvested">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt">Vested</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriod_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zArNZC49uqFg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z2d8F0qksjg2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; padding-bottom: 1.5pt">Forfeited/Cancelled</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeitedInPeriod_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zcoIRv1qORE7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares forfeited and cancelled">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zi9ufPSOQx31" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value forfeited and cancelled">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Unvested shares, December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iE_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zE1UFnA4rela" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares , ending balance">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zPwDIw9mqRAf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value , beginning balance">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Vested as of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zsB7caaXYni1" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares ,vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageFairMarketValue_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zIYZxWFcGOl2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value,vested">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

180000

14.00

180000

14.00

Note 15 - REDEEMABLE PREFERRED STOCK RIGHTS In connection with the merger, Legacy Redeemable Convertible Preferred Stock previously classified as temporary equity was retroactively adjusted, converted into common stock at an exchange ratio of approximately 1.182, and reclassified to permanent equity as a result of the reverse recapitalization. As of December 31, 2022, there was no Legacy Redeemable Convertible Preferred Stock authorized, issued or outstanding. The following describes the rights and preferences of the Legacy Dragonfly Redeemable Convertible Preferred Stock prior to the conversion in the merger: Dividends The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Company (other than dividends on shares of common stock payable in shares of common stock) unless the holders of Series A Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A preferred stock in an amount as set forth in the amended and restated certificate of incorporation. No dividends have been declared to date. Voting Rights The holders of Preferred Stock are entitled to vote, together with the holders of common stock, on all matters submitted to stockholders for a vote. Each preferred stockholder is entitled to the number of votes equal to the number of shares of common stock into which each preferred share is convertible at the time of such vote. The holders of record of the shares of Series A Preferred Stock, exclusively and as a separate class, shall be entitled to elect <span id="xdx_907_ecustom--NumberOfDirectorsElectedByShareHolders_pid_dc_uDirector_c20220101__20221231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember__srt--TitleOfIndividualAxis__srt--DirectorMember_zThfqRd3uHR" title="Number of directors elected by share holders">one director of the Company (the “Series A Director”). The Series A Director shall be given <span id="xdx_90C_ecustom--NumberOfDirectorsElectedByShareHolders_pid_dc_uDirector_c20220101__20221231__srt--TitleOfIndividualAxis__custom--SeriesDirectorMember_ziZoBBuMi4V6" title="Number of directors elected by share holders">two votes on any action requiring the vote or approval of the Board of Directors. The holders of record of the shares of common stock, exclusively and as a separate class, shall be entitled to elect <span id="xdx_904_ecustom--NumberOfVotesPerDirector_pid_dc_uDirector_c20220101__20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__srt--TitleOfIndividualAxis__srt--DirectorMember_zswVsIiFFAK3" title="Number of votes per director">two directors of the Company, the “Common Stock Director A” and the “Common Stock Director B”). The Common Stock Director A shall be given three votes on any action requiring the vote or approval of the Board of Directors and the Common Stock Director B shall be given one vote on any action requiring the vote or approval of the Board of Directors. Any director elected as provided above may be removed without caused by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Assets Sales In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event, as defined, the holders of shares of Series A Preferred Stock then outstanding (the “Series A shareholders”) shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders prior to payment to common shareholders, an amount per share equal to the greater of (i) the Series A Original Issue Price, plus any dividends declared but unpaid thereon, or (ii) such amount per share as would have been payable had all shares of Series A preferred Stock been converted into common stock immediately prior to such liquidation event. If upon the occurrence of such liquidation event, if the assets of the Company available for distribution to its stockholders are insufficient to pay the Series A shareholders the full amount to which they shall be entitled, the Series A shareholders will be entitled to a pro rata distribution of assets in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Upon the occurrence of such liquidation event, and after the payment of all preferential amounts required to be paid to the Series A holders, the remaining assets of the Company available for distribution to its stockholders shall be distributed among the holders of shares of common stock, pro rata based on the number of shares held by each such holder. Redemption The preferred shares are subject to mandatory redemption based on the occurrence of certain “deemed liquidation events” as defined which include a merger or consolidation or the sale, exchange, lease, transfer, exclusive license, or other disposition by the Company of all or substantially all of the Company’s assets. If the Company does not affect a dissolution of the Company under Nevada Law within ninety days after a deemed liquidation event, then the Company is required to send written notice to each holder of Series A Preferred Stock no later than the ninetieth day after the deemed liquidation event advising such holders of their right to require the redemption of such shares of Preferred Stock. Dissolution of the Company under Nevada Law with ninety days after a deemed liquidation event is not within the control of the Company. As such the Preferred Stock is precluded from permanent equity classification and has been presented as mezzanine equity. Conversion Rights Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of common stock as is determined by dividing the Series A Original Issue Price by the Series A Conversion Price of $0.20. Such initial conversion price may be converted into common stock, subject to certain adjustments. Mandatory Conversion Upon either (a) the closing of the sale of shares of common stock at a price of at least $<span id="xdx_905_ecustom--StockPriceTriggerForMandatoryConversionOfStock_pid_c20220101__20221231__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember_ztP4gUOPPL4l" title="Stock price trigger for mandatory conversion of stock">1.00 per share, in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $<span id="xdx_908_ecustom--MinimumGrossProceedsForMandatoryConversionOfStock_pn3n3_c20220101__20221231__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember_zctmrXdQcUbi" title="Minimum gross proceeds for mandatory conversion of stock">25,000 of gross proceeds to the Company or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of more than <span id="xdx_90B_ecustom--PercentageOfVotesForMandatoryConversionOfStock_pid_dp_uPure_c20220101__20221231__us-gaap--StatementClassOfStockAxis__us-gaap--SeriesAPreferredStockMember_zJPvkZrBOHdl" title="Percentage of votes for mandatory conversion of stock">50% of the then outstanding shares of Series A Preferred Stock, then (i) all outstanding shares of Series A Preferred Stock shall automatically be converted into shares of common stock, at the then effective conversion rate and (ii) such shares may not be reissued by the Company. 1.182

1 2 2 3 1 0.20 1.00 25000000 0.50

Note 16 - EARNINGS (LOSS) PER SHARE Earnings (Loss) per Common Share The following table sets forth the information needed to compute basic and diluted (loss) earnings per share for the years ended December 31, 2022 and December 31, 2021: SCHEDULE OF INFORMATION NEEDED TO COMPUTE BASIC AND DILUTED EARNINGS PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20220101__20221231_z88hk2fYkF4b" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20210101_20211231" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40C_eus-gaap--EarningsPerShareBasicAbstract_iB" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Basic (Loss) Earnings per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_zxPKIe3NNaog" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left; padding-bottom: 1.5pt">Net (Loss) Income available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">(39,571</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">4,338</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pdd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">38,565,307</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">35,579,137</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--EarningsPerShareBasic_i01_pdd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">(Loss) Earnings per share, basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(1.03</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.12</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--EarningsPerShareDilutedAbstract_iB" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Diluted (Loss) earnings per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_zeWKqABKypPl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net (Loss) Income available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(39,571</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,338</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pid_zXZrTM24fAoi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">38,565,307</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">35,579,137</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--IncrementalCommonSharesAttributableToShareBasedPaymentArrangements_i01_pid_zNadar3CEzqg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Dilutive effect related to stock options</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,163,200</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_i01_pid_zfahmB0dEgNe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average diluted shares outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">38,565,307</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">37,742,337</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--EarningsPerShareDiluted_i01_pid_z7qE5CQyFp49" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">(Loss) Earnings per share, diluted</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(1.03</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.11</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> DRAGONFLY ENERGY HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022 AND 2021 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) <p id="xdx_89A_eus-gaap--ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock_z7XV99HiFdmd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income per share net (loss) income per share because their effect was anti-dilutive: SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET (LOSS) INCOME PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; width: 64%">Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_z4OIsRfPYHpi" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Purchase an aggregate shares">16,708,414</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zAV0ynNXSAnd" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt">Restricted stock units</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zQhOkoDdjgu8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zQJmND6CWy7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; padding-bottom: 1.5pt">Options</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zf0TyYq9Iau7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zUa2tAaTMPJc" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares"> -</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231_z175Wskf43dc" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">20,531,372</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231_ztMvA5iRoUV3" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

The following table sets forth the information needed to compute basic and diluted (loss) earnings per share for the years ended December 31, 2022 and December 31, 2021: SCHEDULE OF INFORMATION NEEDED TO COMPUTE BASIC AND DILUTED EARNINGS PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49D_20220101__20221231_z88hk2fYkF4b" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20210101_20211231" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40C_eus-gaap--EarningsPerShareBasicAbstract_iB" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Basic (Loss) Earnings per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_zxPKIe3NNaog" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 64%; text-align: left; padding-bottom: 1.5pt">Net (Loss) Income available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">(39,571</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">4,338</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pdd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">38,565,307</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">35,579,137</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--EarningsPerShareBasic_i01_pdd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">(Loss) Earnings per share, basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(1.03</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.12</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--EarningsPerShareDilutedAbstract_iB" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Diluted (Loss) earnings per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_zeWKqABKypPl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net (Loss) Income available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(39,571</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,338</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pid_zXZrTM24fAoi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">38,565,307</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">35,579,137</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--IncrementalCommonSharesAttributableToShareBasedPaymentArrangements_i01_pid_zNadar3CEzqg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Dilutive effect related to stock options</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,163,200</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_i01_pid_zfahmB0dEgNe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average diluted shares outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">38,565,307</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">37,742,337</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--EarningsPerShareDiluted_i01_pid_z7qE5CQyFp49" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">(Loss) Earnings per share, diluted</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(1.03</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.11</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

-39571000

4338000

38565307

35579137

-1.03

0.12

-39571000

4338000

38565307

35579137

2163200

38565307

37742337

-1.03

0.11

<p id="xdx_89A_eus-gaap--ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock_z7XV99HiFdmd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income per share net (loss) income per share because their effect was anti-dilutive: SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET (LOSS) INCOME PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; width: 64%">Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_z4OIsRfPYHpi" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Purchase an aggregate shares">16,708,414</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_988_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zAV0ynNXSAnd" style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt">Restricted stock units</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zQhOkoDdjgu8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zQJmND6CWy7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; padding-bottom: 1.5pt">Options</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zf0TyYq9Iau7" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zUa2tAaTMPJc" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares"> -</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20221231_z175Wskf43dc" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">20,531,372</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20210101__20211231_ztMvA5iRoUV3" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

16708414

180000

3642958

20531372

NOTE 17 – SUBSEQUENT EVENTS On March 5, 2023, the Company entered into a convertible promissory note with a board member in the amount of $<span id="xdx_90D_eus-gaap--ConvertibleNotesPayableCurrent_iI_pn3n3_c20230305__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__srt--TitleOfIndividualAxis__srt--BoardOfDirectorsChairmanMember_zfDzqco7cPY7" title="Promissory note">1,000, or the Principal Amount. Upon execution of the Note and funding of the original principal sum, a payment of $100, or 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 March 29, 2023, the Company obtained a waiver from the Administrative Agent and the Term Loan Lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarter ended March 31, 2023. On March 31, 2023, the Company changed its state of incorporation from the State of Delaware to the State of Nevada (the “Reincorporation”) pursuant to a plan of conversion dated March 30, 2023 (the “Plan of Conversion”). Pursuant to the Plan of Conversion, the issued and outstanding shares of common stock of the Company were automatically converted into common stock of the reincorporated company at the effective time of the Reincorporation. Under the terms of the Purchase Agreement described in Note 13 the Company issued <span id="xdx_901_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20230505__20230505__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zXcG0QkyxCA3" title="Number of shares issued">98,500 shares pursuant to the Purchase Agreement with CCM LLC for aggregate net proceeds to the Company of $<span id="xdx_904_eus-gaap--ProceedsFromIssuanceOfCommonStock_pn3n3_c20230505__20230505__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zBJhPopj8L9a" title="Aggregate net proceeds">671 through April 17, 2023.

1000000

100000

98500

671000

15791000

17781000

2969000

1444000

51812000

49846000

1820000 1624000

1703000

2002000

525000

396000

267000

75016000

73489000

11147000

10214000

275000

1717000

1709000

33000 195000

13172000

12393000

1884000

1633000

11288000

10760000

4205000

4513000

90509000

88762000

18824000

13475000

8199000

6295000

418000

238000

128000 128000

20699000

19242000

1000000

1215000

1188000

50483000

40566000

4141000 32831000

361000

492000

3209000

3541000

7711000

36864000

58194000

77430000

170000000

0.0001

45795502

43272728

5000

4000

5000000

0.0001

54551000

38461000

-22241000

-27133000

32315000

11332000

90509000

88762000

18791000

18303000

14048000

12808000

4743000

5495000

880000

339000

9495000

3626000

4184000

3092000

14559000

7057000

-9816000

-1562000

3815000

1263000

-18523000

14708000

-1263000

4892000

-2825000

-527000

4892000

-2298000

0.11

-0.06

0.10

-0.06

45104515

36542944

48455996

36542944

10000000 2000000 20875475 4000 1619000 12438000 14061000 10000000 2000000 20875475 4000 1619000 12438000 14061000 -10000000 -2000000 15621523 2000000 2000000

36496998

4000

3619000

12438000

16061000

-2298000

288000

100374

113000

36597372

4000

4020000

10140000

14164000

36597372

4000

4020000

10140000

14164000

43272728

4000

38461000

-27133000

11332000

43272728

4000

38461000

-27133000

11332000

4892000

73500000

597000

36009

93000

64971000 747000 747000

2348294

1000

10166000

10167000

4487000

45795502

5000

54551000

-22241000

32315000

45795502

5000

54551000

-22241000

32315000

4892000

-2298000

4487000

288000

219000

613000

-18523000

-527000

1238000

52000

297000

192000

-116000

-62000

1577000

1217000

1966000

5946000

196000

502000

-299000 -2425000

129000

637000

-308000

-274000

-11000

6465000

-4119000

180000

293000

-8730000

-8812000

-3838000

-11110000

589000

4524000

-589000

-4524000

597000

1000000

747000

93000

111000

2437000

111000

-1990000

-15523000

17781000

28630000

15791000

13107000

2003

658

2000

352000

10167000

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. On October 7, 2022, a merger transaction between Chardan NexTech Acquisition 2 Corporation (“CNTQ”), Dragonfly Energy Corp. (“Legacy Dragonfly”), and Bronco Merger Sub, Inc. (“Merger Sub”) was completed pursuant to which Merger Sub was merged with and into Legacy Dragonfly, with Legacy Dragonfly surviving the merger. As a result of the merger, Legacy Dragonfly became a wholly owned subsidiary of New Dragonfly. Although New Dragonfly was the legal acquirer of Legacy Dragonfly in the merger, Legacy Dragonfly is deemed to be the accounting acquirer, and the historical financial statements of Legacy Dragonfly became the basis for the historical financial statements of New Dragonfly upon the closing of the merger. New Dragonfly together with its wholly owned subsidiary, Dragonfly Energy Corp., is referred to hereinafter as the “Company.” Furthermore, the historical financial statements of Legacy Dragonfly became the historical financial statements of the Company upon the consummation of the merger. As a result, the financial statements included in this Quarterly Report reflect (i) the historical operating results of Legacy Dragonfly prior to the merger; (ii) the combined results of CNTQ and Legacy Dragonfly following the close of the merger; (iii) the assets and liabilities of Legacy Dragonfly at their historical cost and (iv) the Legacy Dragonfly’s equity structure for all periods presented, as affected by the recapitalization presentation after completion of the merger.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and present the consolidated financial statements of the Company and its wholly owned subsidiary. All significant intercompany transactions and balances are eliminated in consolidation. Basis of presentation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed of the Company for the annual period ended December 31, 2022. The consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements as of and for the year then ended. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) Going Concern The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. For the three months ended March 31, 2023 and 2022, the Company incurred loss from operations and had negative cash flow from operations. As of March 31, 2023, the Company had $15,791 in cash and cash equivalents and working capital of $24,533. 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 $<span id="xdx_907_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20230331__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--LongtermDebtTypeAxis__custom--TermLoanMember_z3kkj2CFzOZ6" title="Loan amount">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 29, 2023, the Company obtained a waiver from the Term Loan administrative agent and lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarter ended March 31, 2023. It is probable that the Company will fail to meet these covenants within the next twelve months. 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 our operations, strategic plans, and meet its financial covenants. The Company has historically been able to raise additional capital through issuance of equity and/or debt financings and the Company intends to use its equity facility and raise additional capital as needed. However, the Company cannot guarantee that it will be able to raise additional equity, contain expenses, or increase revenue, and comply with the financial covenants under the Term Loan. Recently adopted accounting standards: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements or financial statement disclosures. Recently issued accounting pronouncements: In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments in this update will be effective for the Company on January 1, 2024. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Accounts Receivable The Company’s trade receivables are recorded when billed and represent claims against third parties that will be settled in cash. Generally, payment is due from customers within 30 – 60 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 Company has an allowance for doubtful accounts as of March 31, 2023 and December 31, 2022 of $116 and $90, respectively. 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. As of March 31, 2023 and December 31, 2022, no such reserves were necessary. Property and Equipment Property and equipment are stated at cost, including the cost of significant improvements and renovations. Costs of routine repairs and maintenance are charged to expense as incurred. Depreciation and amortization are calculated by the straight line method over the estimated useful lives for owned property, or, for leasehold improvements, over the shorter of the asset’s useful life or term of the lease. Depreciation expense for the three months ended March 31, 2023 and 2022 was $297 and $192, respectively. The various classes of property and equipment and estimated useful lives are as follows: SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; width: 80%; border-collapse: collapse; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 50%">Office furniture and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 50%; text-align: center"><span id="xdx_905_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zMQGWFWO0s5a" title="Estimated useful life (in years)">3 to <span id="xdx_90D_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zzuZHMe6tG3" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Machinery and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_90B_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_zSrKebM5JOPf" title="Estimated useful life (in years)">3 to <span id="xdx_903_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zAI3NtBwyOEi" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Leasehold improvements</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLifeDescriptionOfTermExtensibleEnumeration_iI_dxL_c20230331_zWVxy8OouPD9" title="::XDX::http%3A%2F%2Ffasb.org%2Fus-gaap%2F2023%23LeaseholdImprovementsMember">Remaining Term of Lease</td></tr> </table> Use of Estimates The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Warrants The Company applies relevant accounting guidance for warrants to purchase the Company’s stock based on the nature of the relationship with the counterparty. For warrants issued to investors or lenders in exchange for cash or other financial assets, the Company follows guidance issued within Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”), to assist in the determination of whether the warrants should be classified as liabilities or equity. Warrants that are determined to require liability classification are measured at fair value upon issuance and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings. Warrants that are determined to require equity classification are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. 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 <span id="xdx_90D_ecustom--PaymentTermForDistributorsAndOriginalEquipmentManufacturers_dtD_c20230101__20230331__srt--RangeAxis__srt--MinimumMember_zPiIygHy9Yf7" title="Payment term for distributors and OEMs">30-<span id="xdx_90D_ecustom--PaymentTermForDistributorsAndOriginalEquipmentManufacturers_dtD_c20230101__20230331__srt--RangeAxis__srt--MaximumMember_z6FQIBHn4NO2" title="Payment term for distributors and OEMs">60 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, 2023 and December 31, 2022, the contract liability related to the Company’s customer deposits approximated $418 and $238, respectively. The Company recognized $211 of contract liability pertaining to the year ended December 31, 2022 as of March 31, 2023. The entire contract liability balance of $434 as of January 1, 2022 was recognized as revenue during the three months ended March 31, 2022. Disaggregation of Revenue The following table present our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"/><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20230101__20230331_zDh8SMW3SKw2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20220101__20220331_zfgcpoWhMCAg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">For the Three Months Ended March 31,</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"/><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Sales</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelDirectlyToConsumerMember_z77U9QQP25Q2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; width: 64%">Retail</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">7,069</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">13,035</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelThroughIntermediaryMember_zZ8MI91bkmu6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt">Distributor</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,968</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,087</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__custom--OriginalEquipmentManufactureMember_zPlejtRyHPTk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-align: left; padding-bottom: 1.5pt">Original equipment manufacture</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,754</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,181</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zd4Zmm7Dtl71" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 20pt; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,791</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zvqw9TEMaroc" style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 20pt; padding-bottom: 2.5pt">Total sales</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,791</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Shipping and Handling Shipping and handling fees paid by customers are recorded within net sales, with the related expenses recorded in cost of sales. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses. Shipping and handling costs associated with outbound freight totaled $1,007 and $1,228 for the three months ended March 31, 2023 and 2022, respectively. 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 our 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. We periodically assess 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 on March 31, 2023 and December 31, 2022 to be $400 and $328, 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) Concentrations Receivables from one customer comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zv8JM5Fsiluh" title="Concentration risk, percentage">50% of accounts receivable as of March 31, 2023. Receivables from three customers comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zlaBf7yBMkNe" title="Concentration risk, percentage">18%, <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_znzMtNJn8I5c" title="Concentration risk, percentage">10% and <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerThreeMember_zkst5ZnN0OEf" title="Concentration risk, percentage">10%, respectively, of accounts receivable as of December 31, 2022. There are no other significant accounts receivable concentration. Sales from <span id="xdx_905_ecustom--NumberOfVendors_pid_dc_uCustomer_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zAynJ5pJgL11" title="Number of vendors">one customer comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zWvUejsSgwX4" title="Concentration risk, percentage">26% of revenue for the three months ended March 31, 2023. There were no significant revenue concentrations for the three months ended March 31, 2022. Payables to <span id="xdx_902_ecustom--NumberOfCustomers_dc_uCustomer_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zY8l5teXkTB7" title="Number of vendors">one vendor comprised approximately <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorMember_zYGGrdBYvFfe" title="Concentration risk, percentage">67% of accounts payables as of March 31, 2023. Payables to <span id="xdx_902_ecustom--NumberOfCustomers_pid_dc_uCustomer_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zF7s2KaHWKP" title="Number of vendors">one vendor comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorMember_zA9BOpCKcOWi" title="Concentration risk, percentage">61% of accounts payables as of December 31, 2022. For the three months ended March 31, 2023, <span id="xdx_903_ecustom--NumberOfVendors_pid_dc_uVendor_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zRsiyK8ACbI3" title="Number of vendors">two vendors accounted for approximately <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorOneMember_zlyLbQDP9KJi" title="Concentration risk, percentage">38% and <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorTwoMember_zVHrRNxpkK8e" title="Concentration risk, percentage">10%, respectively, of the Company’s total purchases. For the three months ended March 31, 2022, <span id="xdx_90F_ecustom--NumberOfVendors_pid_dc_uVendor_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zdeVuA8a4tU9" title="Number of vendors">one vendor accounted for approximately <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneVendorMember_zgavPUxPMXb9" title="Concentration risk, percentage">34% of the Company’s total purchases. Advertising The Company expenses advertising costs as they are incurred and are included in selling and marketing expenses. Advertising expenses amounted to $587 and $781 for the three months ended March 31, 2023, and 2022, respectively. 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 $128 and $128 as of March 31, 2023, and December 31, 2022, 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. 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.

Principles of consolidation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and present the consolidated financial statements of the Company and its wholly owned subsidiary. All significant intercompany transactions and balances are eliminated in consolidation.

Basis of presentation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the Annual Report filed of the Company for the annual period ended December 31, 2022. The consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements as of and for the year then ended. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data)

Going Concern The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. For the three months ended March 31, 2023 and 2022, the Company incurred loss from operations and had negative cash flow from operations. As of March 31, 2023, the Company had $15,791 in cash and cash equivalents and working capital of $24,533. 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 $<span id="xdx_907_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20230331__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--LongtermDebtTypeAxis__custom--TermLoanMember_z3kkj2CFzOZ6" title="Loan amount">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 29, 2023, the Company obtained a waiver from the Term Loan administrative agent and lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarter ended March 31, 2023. It is probable that the Company will fail to meet these covenants within the next twelve months. 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 our operations, strategic plans, and meet its financial covenants. The Company has historically been able to raise additional capital through issuance of equity and/or debt financings and the Company intends to use its equity facility and raise additional capital as needed. However, the Company cannot guarantee that it will be able to raise additional equity, contain expenses, or increase revenue, and comply with the financial covenants under the Term Loan.

15791000

24533000

75000000

Recently adopted accounting standards: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2023. These standards replace the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measure at amortized cost to be presented at the net amount expected to be collected. The Company determined that this change does not have a material impact to the financial statements or financial statement disclosures.

Recently issued accounting pronouncements: In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The amendments in this update will be effective for the Company on January 1, 2024. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivable The Company’s trade receivables are recorded when billed and represent claims against third parties that will be settled in cash. Generally, payment is due from customers within 30 – 60 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 Company has an allowance for doubtful accounts as of March 31, 2023 and December 31, 2022 of $116 and $90, respectively.

30 – 60 days

116000

90000

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. As of March 31, 2023 and December 31, 2022, no such reserves were necessary.

Property and Equipment Property and equipment are stated at cost, including the cost of significant improvements and renovations. Costs of routine repairs and maintenance are charged to expense as incurred. Depreciation and amortization are calculated by the straight line method over the estimated useful lives for owned property, or, for leasehold improvements, over the shorter of the asset’s useful life or term of the lease. Depreciation expense for the three months ended March 31, 2023 and 2022 was $297 and $192, respectively. The various classes of property and equipment and estimated useful lives are as follows: SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; width: 80%; border-collapse: collapse; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 50%">Office furniture and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 50%; text-align: center"><span id="xdx_905_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zMQGWFWO0s5a" title="Estimated useful life (in years)">3 to <span id="xdx_90D_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zzuZHMe6tG3" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Machinery and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_90B_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_zSrKebM5JOPf" title="Estimated useful life (in years)">3 to <span id="xdx_903_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zAI3NtBwyOEi" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Leasehold improvements</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLifeDescriptionOfTermExtensibleEnumeration_iI_dxL_c20230331_zWVxy8OouPD9" title="::XDX::http%3A%2F%2Ffasb.org%2Fus-gaap%2F2023%23LeaseholdImprovementsMember">Remaining Term of Lease</td></tr> </table>

297000

192000

SCHEDULE OF VARIOUS CLASSES OF PROPERTY AND EQUIPMENT AND ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; width: 80%; border-collapse: collapse; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 50%">Office furniture and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 50%; text-align: center"><span id="xdx_905_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zMQGWFWO0s5a" title="Estimated useful life (in years)">3 to <span id="xdx_90D_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zzuZHMe6tG3" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Machinery and equipment</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_90B_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MinimumMember_zSrKebM5JOPf" title="Estimated useful life (in years)">3 to <span id="xdx_903_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20230331__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--MachineryAndEquipmentMember__srt--RangeAxis__srt--MaximumMember_zAI3NtBwyOEi" title="Estimated useful life (in years)">7 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Leasehold improvements</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLifeDescriptionOfTermExtensibleEnumeration_iI_dxL_c20230331_zWVxy8OouPD9" title="::XDX::http%3A%2F%2Ffasb.org%2Fus-gaap%2F2023%23LeaseholdImprovementsMember">Remaining Term of Lease</td></tr> </table>

P3Y

P7Y

P5Y

P3Y

P7Y

Use of Estimates The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Warrants The Company applies relevant accounting guidance for warrants to purchase the Company’s stock based on the nature of the relationship with the counterparty. For warrants issued to investors or lenders in exchange for cash or other financial assets, the Company follows guidance issued within Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”), to assist in the determination of whether the warrants should be classified as liabilities or equity. Warrants that are determined to require liability classification are measured at fair value upon issuance and are subsequently remeasured to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings. Warrants that are determined to require equity classification are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. 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 <span id="xdx_90D_ecustom--PaymentTermForDistributorsAndOriginalEquipmentManufacturers_dtD_c20230101__20230331__srt--RangeAxis__srt--MinimumMember_zPiIygHy9Yf7" title="Payment term for distributors and OEMs">30-<span id="xdx_90D_ecustom--PaymentTermForDistributorsAndOriginalEquipmentManufacturers_dtD_c20230101__20230331__srt--RangeAxis__srt--MaximumMember_z6FQIBHn4NO2" title="Payment term for distributors and OEMs">60 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, 2023 and December 31, 2022, the contract liability related to the Company’s customer deposits approximated $418 and $238, respectively. The Company recognized $211 of contract liability pertaining to the year ended December 31, 2022 as of March 31, 2023. The entire contract liability balance of $434 as of January 1, 2022 was recognized as revenue during the three months ended March 31, 2022.

P30D P60D

418000

238000

211000

434

Disaggregation of Revenue The following table present our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"/><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20230101__20230331_zDh8SMW3SKw2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20220101__20220331_zfgcpoWhMCAg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">For the Three Months Ended March 31,</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"/><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Sales</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelDirectlyToConsumerMember_z77U9QQP25Q2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; width: 64%">Retail</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">7,069</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">13,035</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelThroughIntermediaryMember_zZ8MI91bkmu6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt">Distributor</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,968</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,087</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__custom--OriginalEquipmentManufactureMember_zPlejtRyHPTk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-align: left; padding-bottom: 1.5pt">Original equipment manufacture</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,754</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,181</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zd4Zmm7Dtl71" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 20pt; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,791</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zvqw9TEMaroc" style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 20pt; padding-bottom: 2.5pt">Total sales</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,791</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

The following table present our disaggregated revenues by distribution channel: SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"/><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20230101__20230331_zDh8SMW3SKw2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20220101__20220331_zfgcpoWhMCAg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">For the Three Months Ended March 31,</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"/><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Sales</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelDirectlyToConsumerMember_z77U9QQP25Q2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; width: 64%">Retail</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">7,069</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 14%; text-align: right">13,035</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__us-gaap--SalesChannelThroughIntermediaryMember_zZ8MI91bkmu6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt">Distributor</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,968</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,087</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_hus-gaap--ContractWithCustomerSalesChannelAxis__custom--OriginalEquipmentManufactureMember_zPlejtRyHPTk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-align: left; padding-bottom: 1.5pt">Original equipment manufacture</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,754</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,181</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zd4Zmm7Dtl71" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 20pt; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,791</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_pn3n3_zvqw9TEMaroc" style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 20pt; padding-bottom: 2.5pt">Total sales</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,791</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,303</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

7069000

13035000

2968000

2087000

8754000

3181000

18791000

18303000

18791000

18303000

Shipping and Handling Shipping and handling fees paid by customers are recorded within net sales, with the related expenses recorded in cost of sales. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses. Shipping and handling costs associated with outbound freight totaled $1,007 and $1,228 for the three months ended March 31, 2023 and 2022, respectively. 1007000 1228000 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 our 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. We periodically assess 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 on March 31, 2023 and December 31, 2022 to be $400 and $328, 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) P5Y P10Y

400000

328000

Concentrations Receivables from one customer comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zv8JM5Fsiluh" title="Concentration risk, percentage">50% of accounts receivable as of March 31, 2023. Receivables from three customers comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zlaBf7yBMkNe" title="Concentration risk, percentage">18%, <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_znzMtNJn8I5c" title="Concentration risk, percentage">10% and <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CreditConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerThreeMember_zkst5ZnN0OEf" title="Concentration risk, percentage">10%, respectively, of accounts receivable as of December 31, 2022. There are no other significant accounts receivable concentration. Sales from <span id="xdx_905_ecustom--NumberOfVendors_pid_dc_uCustomer_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zAynJ5pJgL11" title="Number of vendors">one customer comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zWvUejsSgwX4" title="Concentration risk, percentage">26% of revenue for the three months ended March 31, 2023. There were no significant revenue concentrations for the three months ended March 31, 2022. Payables to <span id="xdx_902_ecustom--NumberOfCustomers_dc_uCustomer_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zY8l5teXkTB7" title="Number of vendors">one vendor comprised approximately <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorMember_zYGGrdBYvFfe" title="Concentration risk, percentage">67% of accounts payables as of March 31, 2023. Payables to <span id="xdx_902_ecustom--NumberOfCustomers_pid_dc_uCustomer_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zF7s2KaHWKP" title="Number of vendors">one vendor comprised approximately <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20221231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorMember_zA9BOpCKcOWi" title="Concentration risk, percentage">61% of accounts payables as of December 31, 2022. For the three months ended March 31, 2023, <span id="xdx_903_ecustom--NumberOfVendors_pid_dc_uVendor_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zRsiyK8ACbI3" title="Number of vendors">two vendors accounted for approximately <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorOneMember_zlyLbQDP9KJi" title="Concentration risk, percentage">38% and <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230101__20230331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--VendorTwoMember_zVHrRNxpkK8e" title="Concentration risk, percentage">10%, respectively, of the Company’s total purchases. For the three months ended March 31, 2022, <span id="xdx_90F_ecustom--NumberOfVendors_pid_dc_uVendor_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember_zdeVuA8a4tU9" title="Number of vendors">one vendor accounted for approximately <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20220101__20220331__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--TotalPurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--SupplierConcentrationRiskMember__srt--MajorCustomersAxis__custom--OneVendorMember_zgavPUxPMXb9" title="Concentration risk, percentage">34% of the Company’s total purchases.

0.50

0.18

0.10

0.26

0.67

0.61

0.38

0.10

0.34

Advertising The Company expenses advertising costs as they are incurred and are included in selling and marketing expenses. Advertising expenses amounted to $587 and $781 for the three months ended March 31, 2023, and 2022, respectively.

587000

781000

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 $128 and $128 as of March 31, 2023, and December 31, 2022, 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.

128000

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.

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: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in">●</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">●</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">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. </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">●</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">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.</td></tr> </table> 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 Consolidated Balance Sheets on a recurring basis as of March 31, 2023: SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Carrying Amount</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 1)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 2)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 3)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="18" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-decoration: underline">Liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35%; text-align: left">Warrant liability- Term Loan</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_989_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zqzpLGyGrSx2" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Carrying Amount">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zKo1h44mlbY2" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zYnbc2AvmST7" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> -</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zHKnmkOiEEW" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zlD27mdy3myb" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Warrant liability- Private placement warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zwIOzxRyUw8g" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z8SBK34cSDTa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z2RnlnLeXktl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z7DsjGnod4y9" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zeYc7p0vrhm5" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zn5lB4tyU2i" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">4,141</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zkmjSKW0MSeh" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">4,141</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zkTvBFdLWO4g" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_z6FITvOp6rp3" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zuPjpAfkA7e7" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of December 31, 2022: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Carrying Amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 2)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 3)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="18" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-decoration: underline">Liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35%; text-align: left">Warrant liability- Term Loan</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zO76d90TG7p6" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Carrying Amount">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zBtClYQoiXIh" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z3ZnbaL8Bux1" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> -</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zPnuuXhqRhua" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zxVHKvp1Cdr" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Warrant liability- Private placement warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z24ts2E7ty5g" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_ztA0E2VdnTa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zMnBjBiStjD3" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zf51nb23Vdne" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zgfO34gegOd8" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zJHmqgDmoIw2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_z6sDcuWMwp18" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98B_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zPBTxiibAoRk" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_988_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_z9a5KBYKvDtd" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zmKoGG5rzBnj" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The carrying amounts of accounts receivable and accounts payable are considered level 1 and approximate fair value as of March 31, 2023 and December 31, 2022 because of the relatively short maturity of these instruments. The carrying value of the term loan as of March 31, 2023 and December 31, 2022 approximates fair value as the interest rate does not differ significantly from the current market rates available to the Company for similar debt and is considered level 2. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data)

The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of March 31, 2023: SCHEDULE OF FAIR VALUE, ASSETS AND LIABILITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Carrying Amount</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 1)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 2)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 3)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="18" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-decoration: underline">Liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35%; text-align: left">Warrant liability- Term Loan</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_989_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zqzpLGyGrSx2" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Carrying Amount">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zKo1h44mlbY2" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zYnbc2AvmST7" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> -</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98D_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zHKnmkOiEEW" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zlD27mdy3myb" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Warrant liability- Private placement warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zwIOzxRyUw8g" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z8SBK34cSDTa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z2RnlnLeXktl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z7DsjGnod4y9" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zeYc7p0vrhm5" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zn5lB4tyU2i" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">4,141</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zkmjSKW0MSeh" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">4,141</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zkTvBFdLWO4g" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_z6FITvOp6rp3" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">120</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20230331__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zuPjpAfkA7e7" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of December 31, 2022: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Carrying Amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 2)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">(Level 3)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="18" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-decoration: underline">Liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35%; text-align: left">Warrant liability- Term Loan</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zO76d90TG7p6" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Carrying Amount">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zBtClYQoiXIh" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_z3ZnbaL8Bux1" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> -</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zPnuuXhqRhua" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98E_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--TermLoanMember_zxVHKvp1Cdr" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">Warrant liability- Private placement warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_z24ts2E7ty5g" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_ztA0E2VdnTa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zMnBjBiStjD3" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zf51nb23Vdne" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FinancialInstrumentAxis__custom--PrivateWarrantsMember_zgfO34gegOd8" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_ecustom--LiabilitiesCarryingValue_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_zJHmqgDmoIw2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Carrying Amount">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember_z6sDcuWMwp18" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">32,831</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98B_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zPBTxiibAoRk" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_988_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_z9a5KBYKvDtd" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">1,990</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iI_pn3n3_c20221231__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zmKoGG5rzBnj" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Fair Value">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

4021000

120000

4141000

120000

4021000

30841000

1990000

32831000

1990000

30841000

NOTE 4 - INVENTORY Inventory consists of the following: SCHEDULE OF INVENTORY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 70%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_491_20230331_zZonenmg2m6h" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20221231_zR1sdcuYZc8l" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_404_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINzAGF_z8waZ1DDvFuf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 52%; text-align: left">Raw material</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">44,310</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">42,586</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINzAGF_zYYMni8W5f9j" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,502</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,260</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryNet_iTI_pn3n3_mtINzAGF_zWp8chZIVXIc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-align: left; padding-bottom: 2.5pt">Total inventory</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">51,812</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">49,846</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

Inventory consists of the following: SCHEDULE OF INVENTORY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 70%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_491_20230331_zZonenmg2m6h" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20221231_zR1sdcuYZc8l" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_404_eus-gaap--InventoryRawMaterials_iI_pn3n3_maINzAGF_z8waZ1DDvFuf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 52%; text-align: left">Raw material</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">44,310</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">42,586</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--InventoryFinishedGoods_iI_pn3n3_maINzAGF_zYYMni8W5f9j" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,502</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,260</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryNet_iTI_pn3n3_mtINzAGF_zWp8chZIVXIc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-left: 10pt; text-align: left; padding-bottom: 2.5pt">Total inventory</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">51,812</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">49,846</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

44310000

42586000

7502000

7260000

51812000

49846000

NOTE 5 - COMMITMENTS AND CONTINGENCIES Litigation From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, governmental actions, administrative actions, investigations or claims are pending against the Company or involve the Company that, in the opinion of the Company’s management, could reasonably be expected to have a material adverse effect on the Company’s business and financial condition. Operating Leases The Company has leases related to the main office, warehouse space, research and development lab, and engineering office, all located in Reno, Nevada. The leases require annual escalating monthly payments ranging from $111 to $128. 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. The first payment is due upon substantial completion of construction of the building which is expected to be within 2 years from the effective date. As of March 31, 2023, the lease has not commenced as the Company does not have control over the asset. The following table presents the breakout of the operating leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 70%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20230331_zACeMGMctnNc" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20221231_zANCg23cSCge" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pn3n3_zPlyyaq0Jjy6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 52%; text-align: left; padding-bottom: 1.5pt">Operating lease right-of-use assets</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">4,205</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right"> 4,513</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--OperatingLeaseLiabilityCurrent_iI_pn3n3_z85cObV2mfS2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Short-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,215</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,188</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--OperatingLeaseLiabilityNoncurrent_iI_pn3n3_zf6vU595IXWk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Long-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,209</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,541</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--OperatingLeaseLiability_iI_pn3n3_zq22qa2rapsh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,424</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,729</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average remaining lease term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.4 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.6 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average discount rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> </table> Assumptions used in determining our incremental borrowing rate include our implied credit rating and an estimate of secured borrowing rates based on comparable market data. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 5 - COMMITMENTS AND CONTINGENCIES (CONTINUED) Operating Leases (Continued) At March 31, 2023, the future minimum lease payments under these operating leases are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 60%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Fiscal Years Ending</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20230331_z8HxzJVxLVB" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Amount</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_406_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pn3n3_maLOLLPz07u_zy0EueSgorw8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">December 31, 2023 (1)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">1,054</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pn3n3_maLOLLPz07u_zZD0tc5gpHj4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,435</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearThree_iI_pn3n3_maLOLLPz07u_zAcyRTvbdzql" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,435</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFour_iI_pn3n3_maLOLLPz07u_zUWmxSxdurLj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">December 31, 2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">893</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pn3n3_mtLOLLPz07u_za7LLTofjf0a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total lease payments</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,817</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iI_pn3n3_zc0452PZTzF2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less imputed interest</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">393</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--OperatingLeaseLiability_iI_pn3n3_zIWDQgL4jcDa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,424</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"/><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td><td style="font: 10pt Times New Roman, Times, Serif">Represents scheduled payments for the remaining nine-month period ending December 31, 2023.</td></tr></table> SCHEDULE OF LEASE COST <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Classification</td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 33%; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 33%; text-align: left">Cost of goods sold</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_z63ygxF5ps0b" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Operating lease cost">347</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_zesQsalUvzMi" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Operating lease cost">172</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_zLd57usdsx3f" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">22</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_zchfdXypepj8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">19</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">General and administration</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zk7ypUqDXTe9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">12</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_z3rr5ch7nwkg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">10</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Selling and marketing</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zKclS3lJPD8d" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">12</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zP32b88jIBSf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">14</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331_zAFTTtVeNJXk" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">393</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331_zn73SNKW6gKb" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">215</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Earnout The former holders of shares of Legacy Dragonfly common stock (including shares received as a result of the conversion of Legacy Dragonfly Preferred Stock into New Dragonfly Common Stock) are entitled to receive their pro rata share of up to 40,000,000 additional shares of common stock (the “Earnout Shares”). The Earnout Shares are issuable in three tranches. The first tranche of 15,000,000 shares is issuable if New Dragonfly’s 2023 total audited revenue is equal to or greater than $250,000 and New Dragonfly’s 2023 audited operating income is equal to or greater than $35,000. The second tranche of 12,500,000 shares is issuable upon achieving a volume-weighted average trading price threshold of at least $<span id="xdx_909_ecustom--VolumeWeightedAveragePricePerShare_pid_c20230101__20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--HoldersOfOutstandingSharesOfLegacyDragonflyCommonStockMember__us-gaap--VestingAxis__us-gaap--ShareBasedCompensationAwardTrancheTwoMember_zTNPc4UTGkNh" title="Volume weighted average price per share">22.50 on or prior to December 31, 2026 and the third tranche of 12,500,000 is issuable upon achieving a volume-weighted average trading price threshold of at least $<span id="xdx_903_ecustom--VolumeWeightedAveragePricePerShare_pid_c20230101__20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--HoldersOfOutstandingSharesOfLegacyDragonflyCommonStockMember__us-gaap--VestingAxis__us-gaap--ShareBasedCompensationAwardTrancheThreeMember_zGmA3nXanCnk" title="Volume weighted average price per share">32.50 on or prior to December 31, 2028. To the extent not previously earned, the second tranche is issuable if the $<span id="xdx_909_ecustom--VolumeWeightedAveragePricePerShare_pid_c20230101__20230331__us-gaap--VestingAxis__us-gaap--ShareBasedCompensationAwardTrancheTwoMember_zAafiMJEqqQa" title="Volume weighted average price per share">32.50 price target is achieved by December 31, 2028. 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)

111000

128000

230000

23000

21000 0.03 0.024 P2Y The following table presents the breakout of the operating leases as of: SCHEDULE OF TABLE REPRESENTING THE BREAKOUT OF THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 70%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20230331_zACeMGMctnNc" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20221231_zANCg23cSCge" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pn3n3_zPlyyaq0Jjy6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 52%; text-align: left; padding-bottom: 1.5pt">Operating lease right-of-use assets</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">4,205</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right"> 4,513</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--OperatingLeaseLiabilityCurrent_iI_pn3n3_z85cObV2mfS2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Short-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,215</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,188</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--OperatingLeaseLiabilityNoncurrent_iI_pn3n3_zf6vU595IXWk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Long-term operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,209</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,541</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--OperatingLeaseLiability_iI_pn3n3_zq22qa2rapsh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,424</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,729</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average remaining lease term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.4 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.6 years</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average discount rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">5.2</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> </table>

4205000

4513000

1215000

1188000

3209000

3541000

4424000

4729000

P3Y4M24D

P3Y7M6D

0.052

At March 31, 2023, the future minimum lease payments under these operating leases are as follows: SCHEDULE OF THE FUTURE MINIMUM LEASE PAYMENTS UNDER THE OPERATING LEASES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 60%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Fiscal Years Ending</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20230331_z8HxzJVxLVB" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Amount</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_406_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pn3n3_maLOLLPz07u_zy0EueSgorw8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">December 31, 2023 (1)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">1,054</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pn3n3_maLOLLPz07u_zZD0tc5gpHj4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,435</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearThree_iI_pn3n3_maLOLLPz07u_zAcyRTvbdzql" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,435</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFour_iI_pn3n3_maLOLLPz07u_zUWmxSxdurLj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">December 31, 2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">893</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_pn3n3_mtLOLLPz07u_za7LLTofjf0a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total lease payments</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,817</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iI_pn3n3_zc0452PZTzF2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less imputed interest</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">393</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--OperatingLeaseLiability_iI_pn3n3_zIWDQgL4jcDa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,424</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"/><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td><td style="font: 10pt Times New Roman, Times, Serif">Represents scheduled payments for the remaining nine-month period ending December 31, 2023.</td></tr></table>

1054000

1435000

893000

4817000

393000

4424000

SCHEDULE OF LEASE COST <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Classification</td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 33%; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 33%; text-align: left">Cost of goods sold</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_z63ygxF5ps0b" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Operating lease cost">347</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--CostOfSalesMember_zesQsalUvzMi" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Operating lease cost">172</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Research and development</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_zLd57usdsx3f" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">22</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_zchfdXypepj8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">19</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">General and administration</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zk7ypUqDXTe9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">12</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_z3rr5ch7nwkg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">10</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Operating lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Selling and marketing</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zKclS3lJPD8d" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">12</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zP32b88jIBSf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">14</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total lease cost</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--OperatingLeaseCost_pn3n3_c20230101__20230331_zAFTTtVeNJXk" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">393</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--OperatingLeaseCost_pn3n3_c20220101__20220331_zn73SNKW6gKb" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Operating lease cost">215</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

347000

172000

22000

19000

12000

10000

12000

14000

393000

215000

40000000 15000000 250000000 35000000 12500000 22.50 12500000 32.50 32.50

NOTE 6 - DEBT Financing Trust Indenture On November 24, 2021, the Company entered into agreements to issue $45,000 in fixed rate senior notes (Series 2021 6 Notes) pursuant to a Trust Indenture held by UMB Bank, as trustee and disbursing agent, and Newlight Capital, LLC as servicer. The trust and debt documents also require a Lender Collateral Residual Value Insurance Policy (the “Insurance Policy”, with UMB Bank as named insured for $45,000), and a placement agent, which is Tribe Capital Markets, LLC. In connection with the merger on October 7, 2022 (the “Closing Date”), the Company entered into a Term Loan, Guarantee and Security Agreement (see “Term Loan Agreement” below) and the outstanding principal balance for the Series 2021-6 Notes underlying the Trust Indenture was paid in full. A loss on extinguishment of $4,824 was recognized upon settlement. During the three months ended March 31, 2022, a total of $619 of interest expense was incurred under the debt. Amortization of the debt issuance costs amounted to $613 during the three months ended March 31, 2022. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 6 - DEBT (CONTINUED) Term Loan Agreement On October 7, 2022, in connection with the merger, CNTQ, Legacy Dragonfly and CCM Investments 5 LLC, an affiliate of CCM LLC (“CCM 5”, and in connection with the Term Loan, the “Chardan Lender”), and EICF Agent LLC (“EIP” and, collectively with the Chardan Lender, the “Initial Term Loan Lenders”) entered into the Term Loan Agreement setting forth the terms of the Term Loan. The Chardan Lender backstopped its commitment under the Debt Commitment Letter by entering into a backstop commitment letter, dated as of May 20, 2022 (the “Backstop Commitment Letter”), with a certain third party financing source (the “Backstop Lender” and collectively with EIP, the “Term Loan Lenders”), pursuant to which the Backstop Lender committed to purchase from the Chardan Lender the aggregate amount of the Term Loan held by the Chardan Lender (the “Backstopped Loans”) immediately following the issuance of the Term Loan on the Closing Date. Pursuant to an assignment agreement, the Backstopped Loans were assigned by CCM 5 to the Backstop Lender on the Closing Date. Pursuant to the terms of the Term Loan Agreement, the Term Loan was advanced in one tranche on the Closing Date. The proceeds of the Term Loan were used (i) to refinance on the Closing Date prior indebtedness (including the obligations underlying the Trust Indenture), (ii) to support the Transaction under the merger Agreement, (iii) for working capital purposes and other corporate purposes, and (iv) to pay any fees associated with transactions contemplated under the Term Loan Agreement and the other loan documents entered into in connection therewith, including the transactions described in the foregoing clauses (i) and (ii) and fees and expenses related to the merger. The Term Loan amortizes in the amount of <span id="xdx_902_ecustom--DebtInstrumentAmortizationPercentage_pid_dp_uPure_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zlo32LdbW3D6" title="Debt instrument, amortization percentage">5% per annum (or $<span id="xdx_908_ecustom--DebtInstrumentAmortizationAmount_pp1n3_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zNiyUlNf5NT6" title="Debt instrument, amortization amount">937.5 on the first day of each calendar quarter) beginning <span id="xdx_90D_ecustom--DebtInstrumentAmortizationPeriod_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zEkgXfYyWa1" title="Debt instrument, amortization period">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 <span id="xdx_906_eus-gaap--DebtInstrumentBasisSpreadOnVariableRate1_pid_dp_c20221007__20221007__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zx4AwvxTQmX5" title="Debt instrument, basis spread on variable rate">13.5%, of which <span id="xdx_900_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--UntilApril12023Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember_zhg8QCFAGOH" title="Variable rate, payable in cash">7% will be payable in cash and <span id="xdx_908_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInKind_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--UntilApril12023Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember_zmAWMXOkKge5" title="Variable rate, payable In kind">6.5% will be paid in kind, (ii) thereafter until October 1, 2024, at a per annum rate equal to adjusted SOFR plus <span id="xdx_906_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember_z6VNPJL5Ny5l" title="Variable rate, payable in kind">7% payable in cash plus an amount ranging from <span id="xdx_906_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInKind_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MinimumMember_zsbJ4clVqwK8" title="Variable rate, payable in kind">4.5% to <span id="xdx_900_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInKind_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MaximumMember_zzKL9fBf03Qc" title="Variable rate, payable in kind">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 <span id="xdx_90F_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MinimumMember_zLK6vsteUVF" title="Variable rate, payable in cash">11.5% to <span id="xdx_90F_ecustom--DebtInstrumentBasisSpreadOnVariableRatePayableInCash_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MaximumMember_zivSQFO1Djmj" title="Variable rate, payable in cash">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 <span id="xdx_900_eus-gaap--DebtInstrumentBasisSpreadOnVariableRate1_pid_dp_c20221007__20221007__srt--StatementScenarioAxis__custom--AfterApril12023UntilOctober12024Member__us-gaap--CreditFacilityAxis__custom--SeniorSecuredTermLoanFacilityMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember__us-gaap--VariableRateAxis__custom--AdjustedSecuredOvernightFinancingRateMember__srt--RangeAxis__srt--MinimumMember_z1lFLiRW0cY3" title="Basis spread on variable rate">1%. In addition to optional prepayments by the Company upon written notice, the Term Loan Agreement provides for mandatory prepayments upon receipt of proceeds from certain transactions or casualty events. Beginning on the date the financial statements for the year ended December 31, 2023 are required to be delivered to the Term Loan Lenders, the Company will be required to prepay the Term Loan based on excess cash flow, as defined in the agreement. Unless the obligations under the Term Loan are accelerated under the terms of the agreement, the maturity date will be October 7, 2026. The Term Loan Lenders have been granted a first priority lien, and security interest in, the mortgaged properties underlying the Company’s mortgages. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 6 - DEBT (CONTINUED) Term Loan Agreement (Continued) During the three months ended March 31, 2023, a total of $<span id="xdx_907_eus-gaap--InterestExpenseDebtExcludingAmortization_pn3n3_c20230101__20230331__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zVcLohmuPq79" title="Interest expense">3,496 of interest expense was incurred under the debt. Amortization of the debt issuance costs amounted to $<span id="xdx_908_eus-gaap--AmortizationOfFinancingCosts_pn3n3_c20230101__20230331__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zi8RpXObgbqf">219 during the three months ended March 31, 2023. The carrying balance of $<span id="xdx_903_eus-gaap--LongTermDebt_iI_pn3n3_c20230331__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z93AbvAXNlM8" title="Long term debt">20,699 on March 31, 2023 consisted of $<span id="xdx_90F_eus-gaap--DebtInstrumentFaceAmount_iI_pn3n3_c20230331__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z1NVBFhEWZK7" title="Debt instrument, face amount">75,000 in principal, plus $<span id="xdx_90B_eus-gaap--PaidInKindInterest_pn3n3_c20230101__20230331__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_z0GEL7escU09" title="Paid in kind interest">2,430 PIK interest, less $<span id="xdx_90B_eus-gaap--DeferredFinanceCostsNet_iI_pn3n3_c20230331__us-gaap--LongtermDebtTypeAxis__us-gaap--SeniorNotesMember__us-gaap--TypeOfArrangementAxis__custom--TermLoanAgreementMember_zCGGFJaSuCXk">56,731 in unamortized debt discount related to the debt issuance costs. Financial Covenants Maximum Senior Leverage Ratio The Senior Leverage Ratio is the ratio of (a) consolidated indebtedness, as defined, on such date minus 100% of the unrestricted cash and cash equivalents held (subject to adjustment) to (b) Consolidated earnings before interest, tax and amortization (“EBITDA”) for the trailing twelve (12) fiscal month period most recently ended. If liquidity, as defined, for any fiscal quarter is less than $17,500, the Senior Leverage Ratio shall not be permitted, as of the last day of any fiscal quarter ending during any period set forth below, to exceed the ratio set forth opposite such period in the table below: SCHEDULE OF LEVERAGE RATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 72%">Test Period Ending</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 24%; text-align: right">Leverage Ratio</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2022 - March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90D_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyTwoToMarchThirtyOneTwoThousandTwentyThreeMember_za666F2jpCac" title="Leverage ratio">6.75 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2023 - September 30, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90B_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyThreeToSeptemberThirtyTwoThousandTwentyThreeMember_z6CJHYG8Dc1j" title="Leverage ration">6.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2023 - March 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_907_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyThreeToMarchThirtyOneTwoThousandTwentyThreeMember_zHXGY15SwE9d" title="Leverage ration">5.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2024 - September 30, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_906_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFourToSeptemberThirtyTwoThousandTwentyFourMember_zJNCpogi7D7g" title="Leverage ratio">4.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2024 - March 31, 2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_904_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyFourToMarchThirtyOneTwoThousandTwentyFiveMember_zPJp7XD6scR6" title="Leverage ratio">3.25 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2025 and thereafter</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_908_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFiveAndThereAfterMember_zXeeQUzaXBv8" title="Leverage ratio">3.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> Liquidity The Company shall not permit their Liquidity (determined on a consolidated basis) to be less than $10,000 as of the last day of each fiscal month (commencing with month ending December 31, 2022). Fixed Charge Coverage Ratio The Fixed Charge Coverage Ratio is the ratio of consolidated EBITDA (less capital expenditures and certain other adjustments) to consolidated fixed charges, as defined in the agreement. If Liquidity is less than $15,000 as of the last day of any fiscal quarter (commencing with the quarter ending December 31, 2022), then the Company shall not permit the Fixed Charge Coverage Ratio for the trailing four quarterly periods ending on the last day of any such quarter to be less than 1.15 to 1.00. Capital Expenditures If consolidated EBITDA for the trailing twelve month period ending on the most recently completed fiscal quarter is less than $15,000, then the level of capital expenditures is limited. On March 29, 2023, the Company obtained a waiver from Alter Domus (US) LLC, as administrative agent for the lenders (the “Administrative Agent”) and the Term Loan Lenders of its failures to satisfy the fixed charge coverage ratio and maximum senior leverage ratio with respect to the minimum cash requirements under the Term Loan during the quarter ended March 31, 2023. As a result of the uncertainty of maintaining compliance with financial covenants the Company has continued to classify the entire term loan balance within current liabilities on the balance sheet. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 6 - DEBT (CONTINUED) Debt Maturities At March 31, 2023, the future debt maturities, based on contractual principal payments are as follows: SCHEDULE OF FUTURE DEBT MATURITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 70%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" id="xdx_49A_20230331_zLhuXyVYbPIl" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">For Year Ended December 31,</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_408_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths_iI_pn3n3_maLTDMRzRKL_znbXmNA0fSX" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2023 (1)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo_iI_pn3n3_maLTDMRzRKL_zxwtrGouY2J3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 70%; text-align: left">2024</td><td style="font: 10pt Times New Roman, Times, Serif; width: 10%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">938</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearThree_iI_pn3n3_maLTDMRzRKL_zhcHID5BXRyl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,750</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour_iI_pn3n3_maLTDMRzRKL_z4GnH4O6SP7f" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">91,775</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_ecustom--LongTermDebtMaturitiesRepaymentsOfPrincipal_iTI_pn3n3_mtLTDMRzRKL_maLTDzvhW_zy9KvlNFUVkl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">96,463</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--EstimatedInterestPaidinkind_iI_pn3n3_maLTDzvhW_zhsYaXylo2p9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less: Estimated interest paid-in-kind</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(19,033</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebt_iTI_pn3n3_mtLTDzvhW_zqZlkG2DdnK5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">77,430</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredFinanceCostsNet_iNI_pn3n3_di_zz1HQEbB5HO7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less: Unamortized debt issuance costs, noncurrent</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(56,731</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--DebtInstrumentCarryingAmount_iI_pn3n3_zK8dZnCeHsQa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total carrying amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">20,699</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--LongTermDebtCurrent_iNI_pn3n3_di_zCv4Os8N8cfc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less: Current portion of debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(20,699</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebtNoncurrent_iI_pn3n3_zgfWyEE6dYbd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total long-term debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"/><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td><td style="font: 10pt Times New Roman, Times, Serif">Represents scheduled payments for the remaining nine-month period ending December 31, 2023</td></tr></table>

45000000

4824000

619000

613000

0.05 937500 P24M

0.135

0.07 0.065 0.07 0.045 0.065 0.115 0.135

0.01

3496000

219000

20699000

75000000

2430000

56731000

The Senior Leverage Ratio is the ratio of (a) consolidated indebtedness, as defined, on such date minus 100% of the unrestricted cash and cash equivalents held (subject to adjustment) to (b) Consolidated earnings before interest, tax and amortization (“EBITDA”) for the trailing twelve (12) fiscal month period most recently ended. If liquidity, as defined, for any fiscal quarter is less than $17,500, the Senior Leverage Ratio shall not be permitted

SCHEDULE OF LEVERAGE RATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 72%">Test Period Ending</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%"> </td> <td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; width: 24%; text-align: right">Leverage Ratio</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2022 - March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90D_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyTwoToMarchThirtyOneTwoThousandTwentyThreeMember_za666F2jpCac" title="Leverage ratio">6.75 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2023 - September 30, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90B_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyThreeToSeptemberThirtyTwoThousandTwentyThreeMember_z6CJHYG8Dc1j" title="Leverage ration">6.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2023 - March 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_907_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyThreeToMarchThirtyOneTwoThousandTwentyThreeMember_zHXGY15SwE9d" title="Leverage ration">5.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2024 - September 30, 2024</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_906_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFourToSeptemberThirtyTwoThousandTwentyFourMember_zJNCpogi7D7g" title="Leverage ratio">4.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">December 31, 2024 - March 31, 2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_904_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--DecemberThirtyOneTwoThousandTwentyFourToMarchThirtyOneTwoThousandTwentyFiveMember_zPJp7XD6scR6" title="Leverage ratio">3.25 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">June 30, 2025 and thereafter</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_908_eus-gaap--DebtInstrumentDescriptionOfVariableRateBasis_pid_c20230101__20230331__us-gaap--CreditFacilityAxis__custom--JuneThirtyTwoThousandTwentyFiveAndThereAfterMember_zXeeQUzaXBv8" title="Leverage ratio">3.00 to 1.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table>

6.75 to 1.00

6.00 to 1.00

5.00 to 1.00

4.00 to 1.00

3.25 to 1.00

3.00 to 1.00

The Company shall not permit their Liquidity (determined on a consolidated basis) to be less than $10,000 as of the last day of each fiscal month (commencing with month ending December 31, 2022) The Fixed Charge Coverage Ratio is the ratio of consolidated EBITDA (less capital expenditures and certain other adjustments) to consolidated fixed charges, as defined in the agreement. If Liquidity is less than $15,000 as of the last day of any fiscal quarter (commencing with the quarter ending December 31, 2022), then the Company shall not permit the Fixed Charge Coverage Ratio for the trailing four quarterly periods ending on the last day of any such quarter to be less than 1.15 to 1.00 If consolidated EBITDA for the trailing twelve month period ending on the most recently completed fiscal quarter is less than $15,000, then the level of capital expenditures is limited

At March 31, 2023, the future debt maturities, based on contractual principal payments are as follows: SCHEDULE OF FUTURE DEBT MATURITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 70%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" id="xdx_49A_20230331_zLhuXyVYbPIl" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">For Year Ended December 31,</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_408_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInNextTwelveMonths_iI_pn3n3_maLTDMRzRKL_znbXmNA0fSX" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2023 (1)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearTwo_iI_pn3n3_maLTDMRzRKL_zxwtrGouY2J3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 70%; text-align: left">2024</td><td style="font: 10pt Times New Roman, Times, Serif; width: 10%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">938</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearThree_iI_pn3n3_maLTDMRzRKL_zhcHID5BXRyl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">2025</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,750</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour_iI_pn3n3_maLTDMRzRKL_z4GnH4O6SP7f" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">2026</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">91,775</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_408_ecustom--LongTermDebtMaturitiesRepaymentsOfPrincipal_iTI_pn3n3_mtLTDMRzRKL_maLTDzvhW_zy9KvlNFUVkl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">96,463</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_402_ecustom--EstimatedInterestPaidinkind_iI_pn3n3_maLTDzvhW_zhsYaXylo2p9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less: Estimated interest paid-in-kind</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(19,033</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebt_iTI_pn3n3_mtLTDzvhW_zqZlkG2DdnK5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">77,430</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredFinanceCostsNet_iNI_pn3n3_di_zz1HQEbB5HO7" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less: Unamortized debt issuance costs, noncurrent</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(56,731</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--DebtInstrumentCarryingAmount_iI_pn3n3_zK8dZnCeHsQa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total carrying amount</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">20,699</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--LongTermDebtCurrent_iNI_pn3n3_di_zCv4Os8N8cfc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Less: Current portion of debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(20,699</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--LongTermDebtNoncurrent_iI_pn3n3_zgfWyEE6dYbd" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Total long-term debt</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"/><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td><td style="font: 10pt Times New Roman, Times, Serif">Represents scheduled payments for the remaining nine-month period ending December 31, 2023</td></tr></table>

938000

3750000

91775000

96463000 -19033000

77430000

56731000

20699000

NOTE 7 - ASSET PURCHASE AGREEMENT Bourns Production, Inc On January 1, 2022, the Company entered into an asset purchase agreement (the “APA”) with Bourns Productions, Inc., a Nevada corporation (“Bourns Productions”) pursuant to which the Company acquired machinery, equipment and a lease for a podcast studio from Bourns Productions as set forth in the APA for a purchase price of $<span id="xdx_905_eus-gaap--AssetAcquisitionConsiderationTransferred_pn3n3_c20220101__20220101__us-gaap--AssetAcquisitionAxis__custom--BournsProductionIncMember_zsi2cVHsHQgj" title="Purchase price for acquiring machinery and equipment">197 which approximated fair market value. Thomason Jones Company, LLC In April 2022, the Company entered into an Asset Purchase Agreement (the “April 2022 Asset Purchase Agreement”) with William Thomason, Richard Jones, and Thomason Jones Company, LLC (“Thomason Jones”) whereby the Company acquired inventory and intellectual property assets for up to $<span id="xdx_901_eus-gaap--AssetAcquisitionConsiderationTransferred_pn3n3_c20220401__20220430__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember__srt--RangeAxis__srt--MaximumMember__us-gaap--TypeOfArrangementAxis__custom--AprilTwentyTwentyTwoAssetPurchaseAgreementMember_z1WqjFct3Nz9" title="Purchase price for acquiring machinery and equipment">700 cash plus contingent payments of $<span id="xdx_90C_eus-gaap--AssetAcquisitionConsiderationTransferredContingentConsideration_pn3n3_c20220401__20220430__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember__us-gaap--TypeOfArrangementAxis__custom--AprilTwentyTwentyTwoAssetPurchaseAgreementMember_zadSRUZ352Jg" title="Contingent payments">1,000 each to William Thomason and Richard Jones (the “Earn Out”). The Company determined the contingent consideration to be recognized as contingent compensation to Mr. Thomason and Mr. Jones. The Company concluded the purchase price to be $<span id="xdx_901_eus-gaap--AssetAcquisitionConsiderationTransferred_pn3n3_c20230101__20230331__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember__us-gaap--TypeOfArrangementAxis__custom--AprilTwentyTwentyTwoAssetPurchaseAgreementMember_zCyxGtY7w0Ea" title="Purchase price for acquiring machinery and equipment">444 and was allocated in its entirety to inventory. Contingent Compensation If, within twenty-four months of the Agreement the Company realizes $3,000 in gross sales of product either (a) sold under the Wakespeed brand and/or (b) which incorporates any portion of Purchased IP as listed within the agreement, then the Company will pay to Thomason and Jones each the amount of $<span id="xdx_907_eus-gaap--OtherLiabilities_iI_pn3n3_c20230331__us-gaap--AssetAcquisitionAxis__custom--ThomasonJonesCompanyLLCMember__us-gaap--RelatedAndNonrelatedPartyStatusAxis__us-gaap--RelatedPartyMember_zW8pUZHdoW8h" title="Repayment to related party">1,000 as soon as reasonably practicable. This payment may be made in cash or common stock, in the sole discretion of the Company. As a result, the Company determined that a liability should be recorded ratably over the 24 month period. The Company recognized immediate compensation expense within sales and marketing of $417 on October 1, 2022 for amounts that should have been accrued for during the period April 2022 through September 2022. In October 2022, the Company determined the sales goals will most likely be achieved within 18 months. As a result, the Company changed its estimate prospectively and accelerated the accrual as if the sales goals would be achieved within an 18 month period from the date of acquisition. As a result, the Company recorded an accrual related to the Earn Out in the amount of $1,147 and $782 as of March 31, 2023 and December 31, 2022. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data)

197000

700000

1000000

444000

3000000

1000000

417000

1147000

782000

NOTE 8 - RELATED PARTY The Company loaned its Chief Financial Officer $<span id="xdx_902_eus-gaap--RelatedPartyTransactionAmountsOfTransaction_pn3n3_c20230101__20230331__us-gaap--RelatedPartyTransactionAxis__custom--PromissoryNoteWithRelatedPartyMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefFinancialOfficerMember_zxYIpNfPjpM7" title="Repayment amount owned">469 to repay amounts owed by him to his former employer and entered into a related Promissory Note with a maturity date of March 1, 2026. The loan was forgiven in full in March of 2022 and was recorded within general and administrative expense. 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 $<span id="xdx_90F_eus-gaap--RelatedPartyTransactionAmountsOfTransaction_pn3n3_c20230101__20230331__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefOperatingOfficerMember_zJxN7p9k8rq" title="Repayment to officer">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. In February 2023, the Company entered into an agreement with its former COO in which the ownership of a Company van was transferred to the former COO in connection with his severance. The Company accounted for the cost of the van as an employee bonus, resulting in $116 of general and administrative expense for the current period. 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.

469000

100000

1000000

100000

NOTE 9 - WARRANTS Common Stock Warrants classified as Equity Public Warrants Each Public Warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $11.50 per share. No fractional shares will be issued upon exercise of the Public Warrants. The Company may elect to redeem the Public Warrants subject to certain conditions, in whole and not in part, at a price of $<span id="xdx_900_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_pid_c20230331__us-gaap--ClassOfWarrantOrRightAxis__custom--PublicWarrantsMember_zLtDTnNGsErl" title="Exercise price of warrants">0.01 per Public Warrant if (i) 30 days’ prior written notice of redemption is provided to the holders, and (ii) the last reported sale price of the Company’s common stock equals or exceeds $16.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis. On the Closing Date, there were 9,487,500 Public Warrants issued and outstanding. The Public Warrants are not precluded from equity classification and are accounted for as such on the date of issuance, and each balance sheet date thereafter. The measurements of the Public Warrants after the detachment of the Public Warrants from the Units are classified as Level 1 due to the use of an observable market quote in an active market under the ticker DFLIW. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value of the Warrants as of each relevant date. During the quarter ended March 31, 2023, the Company received proceeds from public warrant exercises of $747 in exchange for 64,971 common shares. 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 The Private Placement 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 three months ended March 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 and 4,627,858 private warrants issued and outstanding as of March 31, 2023 and December 31, 2022, 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, 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 <span id="xdx_906_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_pid_c20230331__us-gaap--ClassOfWarrantOrRightAxis__custom--PennyWarrantsMember_zadVgTVPN3El" title="Warrants to purchase shares">2,593,056 shares (the “Penny Warrants”) and (ii) the $10 warrants to issue warrants to the Term Loan Lenders exercisable to purchase an aggregate of <span id="xdx_901_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_pid_c20230331__us-gaap--ClassOfWarrantOrRightAxis__custom--Warrants10Member_zTWpavIHV696" title="Aggregate purchase of common stock">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 <span id="xdx_90D_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_pid_c20221010__us-gaap--ClassOfWarrantOrRightAxis__custom--Warrants10Member_z81qDeJuJ4W" title="Shares of common stock">457,142 shares of Common Stock in connection with such exercise. During the three months ended March 31, 2023, penny warrant holders exercised <span id="xdx_90C_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_pid_c20230331__us-gaap--ClassOfWarrantOrRightAxis__custom--PennyWarrantsMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zhU48plSKfLg" title="Warrants to purchase shares">1,250,000 warrants on a cashless basis, with the Company agreeing to issue <span id="xdx_904_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_pid_c20221231__us-gaap--ClassOfWarrantOrRightAxis__custom--Warrants10Member__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zVqphjm0Mm9b" title="Warrants to purchase shares">1,248,294 shares of common stock in connection with such exercise. The Company concluded the warrants are not considered indexed to the Company’s 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. 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 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 52%">Common stock price</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--SharePrice_iI_pid_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zhnYgR8PDT53" style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right" title="Common stock price">3.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--SharePrice_iI_pid_c20221231_zjLoEaSztdE8" style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right" title="Common stock price">11.09</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Exercise price</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zoqbE6arNBFg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zuAQ1zenP5W2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_z1KkKrjoIBb1" title="Common stock price">0</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_zFYT8f32aII4" title="Common stock price">0</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember_zbEdzxTtCGth" title="Term">9.52</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9.77</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_z6OPlQQI0iWe" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">89.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zXn8bJJvZRY3" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">90.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zurVR3Vd04Wd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.43</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_z57P8STaK6Ee" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.90</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Fair value</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_ecustom--FairValueOfWarrant_iI_pid_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zcUn7qOJuSff" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">2.99</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_ecustom--FairValueOfWarrant_iI_pid_c20221231_z5aQl5iQ87zf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">11.89</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> The following table presents a roll-forward of the Company’s warrants from January 1, 2023 to March 31, 2023: SCHEDULE OF ROLL FORWARD IN WARRANTS Private Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20230101__20230331__us-gaap--StatementEquityComponentsAxis__custom--PrivateWarrantsMember_zGgrDPH94RQl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zGGua8A4KWqb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">Warrants Outstanding, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zSQAqvKP2fw1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,126,472</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zExLgoPbr5Fe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Warrants Outstanding, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,501,386</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> There were no private warrants issued, exercised and outstanding from the period January 1, 2022 through March 31, 2022. Public Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_490_20230101__20230331__us-gaap--StatementEquityComponentsAxis__custom--PublicWarrantsMember_zm5n610YO70c" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zSvtA0bz73nb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">Warrants Outstanding, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">9,487,500</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zsySIeFw0Hzc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(64,971</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zTQiYsAt0jdh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Warrants Outstanding, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">9,422,529</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> There were no public warrants issued, exercised and outstanding from the period January 1, 2022 through March 31, 2022. Term Loan Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20230101__20230331__us-gaap--StatementEquityComponentsAxis__custom--TermLoanWarrantsMember_z0ZwzP7V1Sqa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zbOt1BTejKUc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">Warrants Outstanding, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">2,593,056</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zDYmFPvjUC91" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,250,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zo2DMzcpnold" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Warrants Outstanding, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,343,056</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> There were no term loan warrants issued, exercised and outstanding from the period January 1, 2022 through March 31, 2022. The following table presents a roll forward of the aggregate fair values of the Company’s warrant liabilities for which fair value is determined by Level 3 Inputs. The only class of warrants that were determined to be Level 3 are the term loan warrants. <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20230101__20230331__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zNk5tOClmVpj" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Warrant Liability</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_400_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iS_pn3n3_zgzQwxH2LFsf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: justify">Balances, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--ExerciseOfWarrants_iN_pn3n3_di_zV1PqTVcBAU9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(8,822</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--FairValueAdjustmentOfWarrants_iN_pn3n3_di_zI2glXM5LQ66" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Change in fair value of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(17,998</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iE_pn3n3_zifW7aHqazn5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data)

11.50

0.01

16.00

9487500

747000 64971

3126472

1100000

1501386

4627858

2593056

1600000

457142

1250000

1248294

The following table provides the significant inputs to the Black-Scholes method for the fair value of the Penny Warrants: SCHEDULE FAIR VALUE WARRANTS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">As of December 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 52%">Common stock price</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--SharePrice_iI_pid_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zhnYgR8PDT53" style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right" title="Common stock price">3.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--SharePrice_iI_pid_c20221231_zjLoEaSztdE8" style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right" title="Common stock price">11.09</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Exercise price</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zoqbE6arNBFg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uUSDPShares_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember_zuAQ1zenP5W2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">0.01</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_z1KkKrjoIBb1" title="Common stock price">0</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember_zFYT8f32aII4" title="Common stock price">0</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Term</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember_zbEdzxTtCGth" title="Term">9.52</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9.77</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_z6OPlQQI0iWe" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">89.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember_zXn8bJJvZRY3" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">90.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk-free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zurVR3Vd04Wd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.43</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20221231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_z57P8STaK6Ee" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">3.90</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Fair value</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_ecustom--FairValueOfWarrant_iI_pid_c20230331__srt--StatementScenarioAxis__custom--InitialMeasurementMember_zcUn7qOJuSff" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">2.99</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98F_ecustom--FairValueOfWarrant_iI_pid_c20221231_z5aQl5iQ87zf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Common stock price">11.89</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table>

3.00

11.09

0.01

P9Y6M7D

P9Y9M7D

89.00

90.00

3.43

3.90

2.99 11.89

The following table presents a roll-forward of the Company’s warrants from January 1, 2023 to March 31, 2023: SCHEDULE OF ROLL FORWARD IN WARRANTS Private Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_496_20230101__20230331__us-gaap--StatementEquityComponentsAxis__custom--PrivateWarrantsMember_zGgrDPH94RQl" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zGGua8A4KWqb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">Warrants Outstanding, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">4,627,858</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zSQAqvKP2fw1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,126,472</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zExLgoPbr5Fe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Warrants Outstanding, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,501,386</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> There were no private warrants issued, exercised and outstanding from the period January 1, 2022 through March 31, 2022. Public Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_490_20230101__20230331__us-gaap--StatementEquityComponentsAxis__custom--PublicWarrantsMember_zm5n610YO70c" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zSvtA0bz73nb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">Warrants Outstanding, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">9,487,500</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zsySIeFw0Hzc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(64,971</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zTQiYsAt0jdh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Warrants Outstanding, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">9,422,529</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> There were no public warrants issued, exercised and outstanding from the period January 1, 2022 through March 31, 2022. Term Loan Warrants: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_492_20230101__20230331__us-gaap--StatementEquityComponentsAxis__custom--TermLoanWarrantsMember_z0ZwzP7V1Sqa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Common Stock Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iS_pid_zbOt1BTejKUc" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%">Warrants Outstanding, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">2,593,056</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_pid_di_zDYmFPvjUC91" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,250,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_40A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber_iE_pid_zo2DMzcpnold" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Warrants Outstanding, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,343,056</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> There were no term loan warrants issued, exercised and outstanding from the period January 1, 2022 through March 31, 2022. The following table presents a roll forward of the aggregate fair values of the Company’s warrant liabilities for which fair value is determined by Level 3 Inputs. The only class of warrants that were determined to be Level 3 are the term loan warrants. <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 65%; margin-left: 0.5in"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49F_20230101__20230331__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zNk5tOClmVpj" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Warrant Liability</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_400_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iS_pn3n3_zgzQwxH2LFsf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: justify">Balances, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: right">30,841</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--ExerciseOfWarrants_iN_pn3n3_di_zV1PqTVcBAU9" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Exercise of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(8,822</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--FairValueAdjustmentOfWarrants_iN_pn3n3_di_zI2glXM5LQ66" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Change in fair value of warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(17,998</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--SharesSubjectToMandatoryRedemptionSettlementTermsFairValueOfShares_iE_pn3n3_zifW7aHqazn5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">4,021</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

4627858

3126472

1501386

9487500

64971

9422529

2593056

1250000

1343056

30841000

8822000

17998000

4021000

NOTE 10 - COMMON STOCK The Company is authorized to issue up to 170,000,000 shares of common stock with $0.0001 par value. Common stockholders are entitled to dividends if and when declared by the Board of Directors subject to the rights of the preferred stockholders. For the three months ended March 31, 2023 and 2022, the Company had reserved shares of common stock for issuance as follows: SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20230331_zoaQ6IzTuZCd" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20220331_zRUL0DM0oX6e" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iI_pid_zpg5qO8DNBr8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: left">Options issued and outstanding</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">3,731,392</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CommonStockSharesOutstanding_iI_pid_zAQgfnSmWmKg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Common stock outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">45,795,502</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,581,910</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_zQ6oAI59ruf4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Warrants outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">12,266,971</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--EarnoutShares_iI_pid_zrzLvBJAuul8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Earnout shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">40,000,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_iI_pid_zbXkZdGcVNs6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Shares available for future issuance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,319,309</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,205,790</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--CommonStockCapitalSharesReservedForFutureIssuance_iTI_pid_zbuuojuKRZx3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">106,113,174</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">41,418,702</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> ChEF Equity Facility The Company and Chardan Capital Markets LLC, a New York limited liability company (“CCM LLC”) entered into a purchase agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “ChEF RRA”) in connection with the merger. Pursuant to the Purchase Agreement, the Company has the right to sell to CCM LLC an amount of shares of Common Stock, up to a maximum aggregate purchase price of $<span id="xdx_909_ecustom--PlanOfMergerMaximumAggregatePurchasePrice_pn6n6_c20230101__20230331__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember__srt--RangeAxis__srt--MaximumMember_zVANeqxrpYVg" title="Aggregated purchase price">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.

170000000

0.0001

For the three months ended March 31, 2023 and 2022, the Company had reserved shares of common stock for issuance as follows: SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_495_20230331_zoaQ6IzTuZCd" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49B_20220331_zRUL0DM0oX6e" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_40E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iI_pid_zpg5qO8DNBr8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: left">Options issued and outstanding</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">3,731,392</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CommonStockSharesOutstanding_iI_pid_zAQgfnSmWmKg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Common stock outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">45,795,502</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,581,910</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_zQ6oAI59ruf4" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Warrants outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">12,266,971</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_ecustom--EarnoutShares_iI_pid_zrzLvBJAuul8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Earnout shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">40,000,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_iI_pid_zbXkZdGcVNs6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Shares available for future issuance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">4,319,309</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,205,790</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--CommonStockCapitalSharesReservedForFutureIssuance_iTI_pid_zbuuojuKRZx3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">106,113,174</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">41,418,702</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

3731392

3631002

45795502

36581910

12266971

40000000

4319309

1205790

106113174

41418702

150000000

73500

597000

NOTE 11 - STOCK-BASED COMPENSATION Share-based compensation expense for options and RSUs totaling $4,487 and $288 was recognized in the Company’s consolidated statements of operations for the three months ended March 31, 2023 and 2022, respectively. 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, $<span id="xdx_90A_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_z6sjpHF7wzu6" title="Total compensation">29 to research and development, $<span id="xdx_901_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zjpKZBNw8I06" title="Total compensation">856 to selling and marketing, and $<span id="xdx_906_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20230101__20230331__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zW93oBf5Wdve" title="Total compensation">3,566 to general and administrative expenses. Of the $288 of share-based compensation incurred during the three months ended March 31, 2022, $97 is allocated to cost of goods sold, $<span id="xdx_90F_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--ResearchAndDevelopmentExpenseMember_zA10xqBjmYQ2" title="Total compensation">37 to research and development, $<span id="xdx_901_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--SellingAndMarketingExpenseMember_zLEMKNRk3TW4" title="Total compensation">60 to selling and marketing, and $<span id="xdx_90E_eus-gaap--AllocatedShareBasedCompensationExpense_pn3n3_c20220101__20220331__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_zPQC6DF9zya9" title="Total compensation">94 to general and administrative expenses. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 11 - STOCK-BASED COMPENSATION (CONTINUED) A summary of the Company’s option activity and related information follows: SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Options (1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Exercise Price</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Grant Date Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center">Weighted-Average Remaining Contractual Life (in years)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Aggregate intrinsic value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35%; text-align: justify">Balances, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20220101__20220331_fKDEp_zh4FJjfoV7J1" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Number of Options, Balance at the beginning">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20220101__20220331_zZIOsIjSlHz5" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning"> 1.98</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20220101__20220331_zbLl866Vllqc" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning"> 1.38</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> <span id="xdx_90E_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20220101__20220331_zJYhOcbmZBD7" title="Weighted- Average Remaining Contractual Life (in years)">8.52</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20220101__20220331_zNLHjMduMut3" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">6,550</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20220101__20220331_fKDEp_zH9qaSbcVz95" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20220101__20220331_z6kjRntpmkNl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20220331_zuABifId3Pkh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20220101__20220331_zsL0LHg7Xskg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20220101__20220331_fKDEp_zw2BDk6NHqfh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(11,584</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20220101__20220331_zxXHviSYJlRf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">1.44</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20220101__20220331_zwFZHkpAr253" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">2.17</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20220101__20220331_zGfia9Vjo5a9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20220101__20220331_fKDEp_zgjrJIDCWUJa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(48,369</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20220101__20220331_zbumZMndBBGa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">0.49</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20220101__20220331_zZRiK1O9Uvad" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">0.83</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20220101__20220331_zZo1K7WitwNj" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20220101__20220331_fKDEp_zYPq8thpIzua" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20220101__20220331_zOUy2ksfkRjb" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">2.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20220101__20220331_zcx230gXUmf2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value,Balances at the end">1.39</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_900_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20220101__20220331_zBu9E6fk6gmh" title="Weighted- Average Remaining Contractual Life (in years)">8.29</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20220101__20220331_zz3XrTx8ITA2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">6,377</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20230101__20230331_fKDEp_zeJnfmVQoYfb" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the beginning">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20230101__20230331_ziWZAYhjFABh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning">2.02</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20230101__20230331_zovOqwHZuJ07" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning">1.21</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20230101__20230331_zADL6gKd18f8" title="Weighted- Average Remaining Contractual Life (in years)">7.90</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20230101__20230331_zAHh6J9IEWpf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">35,989</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20230101__20230331_fKDEp_z9AusgML7uO4" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">143,607</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331_zjCa99Owv9el" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20230101__20230331_zNIaBN2Br4V" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted">3.82</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20230101__20230331_zUeILhwq4ZFj" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">632</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20230101__20230331_fKDEp_zLYLex5dhAa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(19,164</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331_zvA9MdzkqtUe" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">7.27</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20230101__20230331_zPCaNGzbRHW1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">3.71</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20230101__20230331_zGbML20rMiY" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">6</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20230101__20230331_fKDEp_zXmFQWGFh1Xc" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(36,009</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331_zN8FASuJnPY2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">2.58</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20230101__20230331_z6G0WlsNUOIg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">1.65</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20230101__20230331_zl2pPaWfTozf" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">232</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20230101__20230331_fKDEp_zxThxa4X7o37" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,731,392</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331_zfYE6Pt0Dus3" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">2.20</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20230101__20230331_z3J53gevgwo2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value,Balances at the end">1.30</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"><span id="xdx_90E_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20230101__20230331_zJsulBFXY9pb" title="Weighted- Average Remaining Contractual Life (in years)">6.62</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20230101__20230331_zUml1rmlfXHf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">3,800</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">At March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and Exercisable</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iE_pid_c20230101__20230331_fKDEp_z6PZEE1Q9su8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and Exercisable">2,029,985</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageExercisePrice_iE_pid_c20230101__20230331_zPWjjBtLu5Cd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and Exercisable">1.53</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageRemainingContractualTerm1_dtY_c20230101__20230331_zIk6mFgrJET1" title="Weighted- Average Remaining Contractual Life (in years)">4.98</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331_zmleBDznRpg6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and Exercisable">3,120</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and expected to vest</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingNumber_iE_pid_c20230101__20230331_fKDEp_zM4f8lES8uNd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and expected to vest">3,731,392</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331_z6oMLSetfqGg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and expected to vest (in dollars per share)">2.20</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_901_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1_dtY_c20230101__20230331_zyvCxrEe2qd1" title="Weighted- Average Remaining Contractual Life (in years)">6.62</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331_zdNmhxLTGT1l" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and expected to vest">3,800</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately <span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNDSEVEVUxFIE9GIE9QVElPTiBBQ1RJVklUWSBBTkQgUkVMQVRFRCBJTkZPUk1BVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_900_eus-gaap--StockholdersEquityNoteStockSplitConversionRatio1_pid_uPure_c20230101__20230331_zLJK8C2wpyP6" title="Stock option exchange ratio">1.182 as a result of the merger.</td> </tr></table> Restricted Stock Units On October 7, 2022, the Company granted <span id="xdx_90A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iI_pid_c20221007__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zo39DC23nJq" title="Restricted Stock Units">180,000 restricted stock units under the 2022 plan which vest one year from the grant date. The fair value of the restricted stock units on the date of grant was $<span id="xdx_905_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardGross_pn3n3_c20221006__20221007__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zDRx5nzwWUYg" title="Restricted stock units, value">2,520, which is recognized as compensation expense over the requisite service period based on the value of the underlying shares on the date of grant. On February 10, 2023, the Company granted <span id="xdx_904_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iI_pid_c20230210__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zUQXmmNXDj63" title="Restricted Stock Units">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 $<span id="xdx_902_eus-gaap--StockIssuedDuringPeriodValueRestrictedStockAwardGross_pn3n3_c20230210__20230210__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zMywBvbL1Mie" title="Restricted stock units, value">3,464 and was recorded as compensation expense. Dragonfly Energy Holdings Corp. Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) NOTE 11 - STOCK-BASED COMPENSATION (CONTINUED) Restricted Stock Units (Continued) There were no grants of restricted stock units prior to October 7, 2022. The following table presents the restricted stock units activity for the three months ended March 31, 2023: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Fair Market Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: justify">Unvested shares at January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zGivYKZ8AdSf" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Number of shares , beginning balance">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z8hFgMH9y0X3" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Weighted average fair market value , beginning balance">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Granted and unvested</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zSSFFzxLJfbh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares granted and unvested">461,998</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zfKWUHSdmbRi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value granted and unvested">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Vested</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriod_iN_pid_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zwckWFsfRzMk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares vested">(461,998</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodWeightedAverageGrantDateFairValue_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zr4T3mH6SQt8" style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right" title="Weighted average fair market value vested">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Unvested shares, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zYgwuCdCq9S6" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares , ending balance">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">$</td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zlC1wlGpR8zj" style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right" title="Weighted average fair market value , beginning balance">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested as of March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z9zX2ZnBpv2b" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares ,vested">461,998</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98B_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageFairMarketValue_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zM6WmwhAV1Dj" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value,vested">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> As of March 31, 2023, there were <span id="xdx_903_eus-gaap--ClassOfWarrantOrRightUnissued_iI_pid_c20230331__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoEquityIncentiveAndEmployeeStockPurchasePlanMember_z0R21L0B1SG5" title="Unissued authorized and available for future awards">4,319,309 shares of unissued authorized and available for future awards under the 2022 Equity Incentive Plan and Employee Stock Purchase Plan.

4487000

288000

4487000

36000

29000

856000

3566000

288000

97000

37000

60000

94000

A summary of the Company’s option activity and related information follows: SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Options (1)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Exercise Price</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Grant Date Fair Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center">Weighted-Average Remaining Contractual Life (in years)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Aggregate intrinsic value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35%; text-align: justify">Balances, January 1, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20220101__20220331_fKDEp_zh4FJjfoV7J1" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Number of Options, Balance at the beginning">3,690,955</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20220101__20220331_zZIOsIjSlHz5" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning"> 1.98</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20220101__20220331_zbLl866Vllqc" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning"> 1.38</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"> <span id="xdx_90E_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20220101__20220331_zJYhOcbmZBD7" title="Weighted- Average Remaining Contractual Life (in years)">8.52</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20220101__20220331_zNLHjMduMut3" style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">6,550</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20220101__20220331_fKDEp_zH9qaSbcVz95" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20220101__20220331_z6kjRntpmkNl" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20220101__20220331_zuABifId3Pkh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20220101__20220331_zsL0LHg7Xskg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20220101__20220331_fKDEp_zw2BDk6NHqfh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(11,584</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20220101__20220331_zxXHviSYJlRf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">1.44</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20220101__20220331_zwFZHkpAr253" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">2.17</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20220101__20220331_zGfia9Vjo5a9" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20220101__20220331_fKDEp_zgjrJIDCWUJa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(48,369</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20220101__20220331_zbumZMndBBGa" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">0.49</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20220101__20220331_zZRiK1O9Uvad" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">0.83</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20220101__20220331_zZo1K7WitwNj" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20220101__20220331_fKDEp_zYPq8thpIzua" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20220101__20220331_zOUy2ksfkRjb" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">2.00</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20220101__20220331_zcx230gXUmf2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value,Balances at the end">1.39</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_900_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20220101__20220331_zBu9E6fk6gmh" title="Weighted- Average Remaining Contractual Life (in years)">8.29</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20220101__20220331_zz3XrTx8ITA2" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">6,377</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Balances, January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_pid_c20230101__20230331_fKDEp_zeJnfmVQoYfb" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the beginning">3,642,958</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_pid_c20230101__20230331_ziWZAYhjFABh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price - Balances at the beginning">2.02</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20230101__20230331_zovOqwHZuJ07" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Balances at the beginning">1.21</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm_dtY_c20230101__20230331_zADL6gKd18f8" title="Weighted- Average Remaining Contractual Life (in years)">7.90</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iS_pn3n3_c20230101__20230331_zAHh6J9IEWpf" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the beginning">35,989</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options granted</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_pid_c20230101__20230331_fKDEp_z9AusgML7uO4" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options granted">143,607</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331_zjCa99Owv9el" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options granted">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20230101__20230331_zNIaBN2Br4V" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options granted">3.82</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantedInPeriodIntrinsicValue_pn3n3_c20230101__20230331_zUeILhwq4ZFj" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options granted">632</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Options forfeited</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_pid_di_c20230101__20230331_fKDEp_zLYLex5dhAa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options forfeited">(19,164</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331_zvA9MdzkqtUe" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options forfeited">7.27</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedOptionsForfeitedWeightedAverageGrantDateFairValue_pid_c20230101__20230331_zPCaNGzbRHW1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options forfeited">3.71</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeitedInPeriodTotalIntrinsicValue_pn3n3_c20230101__20230331_zGbML20rMiY" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options forfeited">6</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Options exercised</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_iN_pid_di_c20230101__20230331_fKDEp_zXmFQWGFh1Xc" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options exercised">(36,009</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_pid_c20230101__20230331_zN8FASuJnPY2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Options exercised">2.58</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_982_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageGrantDateFairValue_pid_c20230101__20230331_z6G0WlsNUOIg" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value, Options exercised">1.65</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodTotalIntrinsicValue_pn3n3_c20230101__20230331_zl2pPaWfTozf" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Options exercised">232</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Balances, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_pid_c20230101__20230331_fKDEp_zxThxa4X7o37" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Balance at the end">3,731,392</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331_zfYE6Pt0Dus3" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Balances at the end">2.20</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20230101__20230331_z3J53gevgwo2" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Grant Date Fair Value,Balances at the end">1.30</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"><span id="xdx_90E_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20230101__20230331_zJsulBFXY9pb" title="Weighted- Average Remaining Contractual Life (in years)">6.62</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingIntrinsicValue_iE_pn3n3_c20230101__20230331_zUml1rmlfXHf" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Balances at the end">3,800</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">At March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and Exercisable</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iE_pid_c20230101__20230331_fKDEp_z6PZEE1Q9su8" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and Exercisable">2,029,985</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageExercisePrice_iE_pid_c20230101__20230331_zPWjjBtLu5Cd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and Exercisable">1.53</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90B_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageRemainingContractualTerm1_dtY_c20230101__20230331_zIk6mFgrJET1" title="Weighted- Average Remaining Contractual Life (in years)">4.98</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_982_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331_zmleBDznRpg6" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and Exercisable">3,120</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested and expected to vest</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingNumber_iE_pid_c20230101__20230331_fKDEp_zM4f8lES8uNd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of Options, Vested and expected to vest">3,731,392</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageExercisePrice_iE_pid_c20230101__20230331_z6oMLSetfqGg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted- Average Exercise Price Vested and expected to vest (in dollars per share)">2.20</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_901_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageRemainingContractualTerm1_dtY_c20230101__20230331_zyvCxrEe2qd1" title="Weighted- Average Remaining Contractual Life (in years)">6.62</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue_iE_pn3n3_c20230101__20230331_zdNmhxLTGT1l" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Aggregate Intrinsic value Vested and expected to vest">3,800</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"> <td style="font: 10pt Times New Roman, Times, Serif; width: 35pt; text-align: right">(1)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately <span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNDSEVEVUxFIE9GIE9QVElPTiBBQ1RJVklUWSBBTkQgUkVMQVRFRCBJTkZPUk1BVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_900_eus-gaap--StockholdersEquityNoteStockSplitConversionRatio1_pid_uPure_c20230101__20230331_zLJK8C2wpyP6" title="Stock option exchange ratio">1.182 as a result of the merger.</td> </tr></table>

3690955

1.98

1.38

P8Y6M7D

6550000

11584

1.44

2.17

48369

0.49

0.83

3631002

2.00

1.39

P8Y3M14D

6377000

3642958

2.02

1.21

P7Y10M24D

35989000

143607

7.50

3.82

632000

19164

7.27

3.71

6000

36009

2.58

1.65

232000

3731392

2.20

1.30

P6Y7M13D

3800000

2029985

1.53

P4Y11M23D

3120000

3731392

2.20

P6Y7M13D

3800000

1.182

180000

2520000

461998

3464000

There were no grants of restricted stock units prior to October 7, 2022. The following table presents the restricted stock units activity for the three months ended March 31, 2023: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Number of Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Weighted-Average Fair Market Value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: justify">Unvested shares at January 1, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zGivYKZ8AdSf" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Number of shares , beginning balance">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iS_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z8hFgMH9y0X3" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Weighted average fair market value , beginning balance">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Granted and unvested</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zSSFFzxLJfbh" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares granted and unvested">461,998</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zfKWUHSdmbRi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value granted and unvested">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Vested</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriod_iN_pid_di_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zwckWFsfRzMk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares vested">(461,998</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsVestedInPeriodWeightedAverageGrantDateFairValue_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zr4T3mH6SQt8" style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: right" title="Weighted average fair market value vested">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt">Unvested shares, March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedNumber_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zYgwuCdCq9S6" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares , ending balance">180,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">$</td><td id="xdx_989_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue_iE_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zlC1wlGpR8zj" style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right" title="Weighted average fair market value , beginning balance">14.00</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Vested as of March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_z9zX2ZnBpv2b" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Number of shares ,vested">461,998</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_98B_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedWeightedAverageFairMarketValue_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zM6WmwhAV1Dj" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Weighted average fair market value,vested">7.50</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table>

180000

14.00

461998

7.50

461998

7.50

180000

14.00

461998

7.50

4319309

NOTE 12 - EARNINGS (LOSS) PER SHARE Earnings (Loss) per Common Share The following table sets forth the information needed to compute basic and diluted earnings (loss) per share for the three months ended March 31, 2023 and 2022: SCHEDULE OF INFORMATION NEEDED TO COMPUTE BASIC AND DILUTED EARNINGS PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20230101__20230331_z7H29eiDWkze" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20220101__20220331_zHT4YtuoHjZ" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_402_eus-gaap--EarningsPerShareBasicAbstract_iB_zQQRzVbIFzik" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Basic Earnings (Loss) per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_zSm3bg4cT3Ah" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: left; padding-bottom: 2.5pt">Net Income (Loss) available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">4,892</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">(2,298</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_405_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pid_zPnj0qCbboBe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">45,104,515</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,542,944</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--EarningsPerShareBasic_i01_pid_zcLr1vKHU77k" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Earnings (Loss) per share, basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.11</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.06</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--EarningsPerShareDilutedAbstract_iB_zB8990qNKpc3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Diluted Earnings (Loss) per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_z8LUJTBEvPoh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net Income (Loss) available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,892</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,298</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pid_zh85dveN6JSb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">45,104,515</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,542,944</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--IncrementalCommonSharesAttributableToShareBasedPaymentArrangements_i01_pid_z3iPlRhaquB6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Dilutive effect related to stock options and warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,351,481</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_i01_pid_zGy17kJp2E45" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average diluted shares outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">48,455,996</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,542,944</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--EarningsPerShareDiluted_i01_pid_zGzTz05QJeBf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Earnings (Loss) per share, diluted</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.10</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.06</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <p id="xdx_89A_eus-gaap--ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock_zkxah7r0Ts6a" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income per share net income (loss) per share because their effect was anti-dilutive: SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET (LOSS) INCOME PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%">Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zsKlHRxR2SXg" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Purchase an aggregate shares">10,923,915</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zvGnY2pcVb5a" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Restricted stock units</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zeiAyavTeB5j" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">111,015</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zLc2NA2SqUZ1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Options</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zTDWYEtxWfVk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zQa6kMPRMdNk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331_zJW3iAQ1u5Ce" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">11,034,930</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331_zaIvNy14UwEj" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> </table>

The following table sets forth the information needed to compute basic and diluted earnings (loss) per share for the three months ended March 31, 2023 and 2022: SCHEDULE OF INFORMATION NEEDED TO COMPUTE BASIC AND DILUTED EARNINGS PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_497_20230101__20230331_z7H29eiDWkze" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" id="xdx_49E_20220101__20220331_zHT4YtuoHjZ" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr id="xdx_402_eus-gaap--EarningsPerShareBasicAbstract_iB_zQQRzVbIFzik" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Basic Earnings (Loss) per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_zSm3bg4cT3Ah" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: left; padding-bottom: 2.5pt">Net Income (Loss) available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">4,892</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right">(2,298</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_405_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pid_zPnj0qCbboBe" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">45,104,515</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,542,944</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--EarningsPerShareBasic_i01_pid_zcLr1vKHU77k" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Earnings (Loss) per share, basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.11</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.06</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--EarningsPerShareDilutedAbstract_iB_zB8990qNKpc3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Diluted Earnings (Loss) per common share:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_i01_pn3n3_z8LUJTBEvPoh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net Income (Loss) available to common shareholders</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,892</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,298</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pid_zh85dveN6JSb" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">45,104,515</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,542,944</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--IncrementalCommonSharesAttributableToShareBasedPaymentArrangements_i01_pid_z3iPlRhaquB6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Dilutive effect related to stock options and warrants</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,351,481</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_i01_pid_zGy17kJp2E45" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted average diluted shares outstanding</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">48,455,996</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">36,542,944</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--EarningsPerShareDiluted_i01_pid_zGzTz05QJeBf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Earnings (Loss) per share, diluted</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.10</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(0.06</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> </table>

4892000

-2298000

45104515

36542944

0.11

-0.06

4892000

-2298000

45104515

36542944

3351481

48455996

36542944

0.10

-0.06

<p id="xdx_89A_eus-gaap--ScheduleOfAntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareTextBlock_zkxah7r0Ts6a" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The following table sets forth the number of potential shares of common stock that have been excluded from diluted net income per share net income (loss) per share because their effect was anti-dilutive: SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET (LOSS) INCOME PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%">Warrants</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zsKlHRxR2SXg" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Purchase an aggregate shares">10,923,915</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td id="xdx_98B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember_zvGnY2pcVb5a" style="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Restricted stock units</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_981_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zeiAyavTeB5j" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">111,015</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98E_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zLc2NA2SqUZ1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Options</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zTDWYEtxWfVk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zQa6kMPRMdNk" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Weighted average number of common shares-basic</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_989_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230101__20230331_zJW3iAQ1u5Ce" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">11,034,930</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20220101__20220331_zaIvNy14UwEj" style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Purchase an aggregate shares">3,631,002</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"> </td></tr> </table>

10923915

111015

3631002

11034930

3631002

NOTE 13 – INCOME TAXES The Company’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate adjusted for the effect of discrete items arising in that quarter. The Company recorded an income tax expense (benefit) of $0 and ($527) during the three months ended March 31, 2023 and 2022, respectively. The effective tax rate differs from the U.S. statutory tax rate primarily due to the valuation allowances on the Company’s deferred tax assets as it is more likely than not that some or all the Company’s deferred tax assets will not be realized. The Company’s policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on the Company’s condensed consolidated balance sheets. The Company has not recognized any interest and penalties in its condensed consolidated statements of operations, nor has it accrued for or made payments for interest and penalties.

-527000

NOTE 14 – SUBSEQUENT EVENTS On April 1, 2023 the Company paid the $<span id="xdx_909_eus-gaap--ConvertibleNotesPayableCurrent_iI_pn3n3_c20230401__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember__srt--TitleOfIndividualAxis__srt--BoardOfDirectorsChairmanMember_zLURMp7gOD35" title="Promissory note">1,000 Principal Amount on the Note previously issued to Brian Nelson on March 5, 2023. Upon execution of the Note and funding of the Principal Amount, a payment of the $100 Loan Fee, was fully earned as of the date of the note and was due and paid in full in cash on April 4, 2023. On April 26, 2023 (the “Separation Date”), the Company’s Chief Legal Officer’s employment with the Company ended and her employment agreement was deemed terminated as of that date by the Company without cause for purposes of determining severance thereunder. Under the terms of her employment agreement, Ms. Harvey is entitled to receive cash severance equal to $334,000 payable in 52 biweekly installments commencing 30 days from the Separation Date. Ms. Harvey’s outstanding options granted by the Company fully vested, and are exercisable for three (3) months following the Separation Date.

1000000

100000

334000000

-The number of Legacy Dragonfly shares was determined from the shares of Legacy Dragonfly outstanding immediately prior to the closing of the merger converted at the Exchange Ratio. All fractional shares were rounded down. The preferred shares of Legacy Dragonfly were exchanged on a 1 to 1 ratio to common stock and the shares were then exchanged for shares of Dragonfly Energy Holdings Corp. at the Exchange Ratio. There were no warrants issued, exercised and outstanding prior to January 1, 2022. There were no warrants issued, exercised and outstanding prior to January 1, 2022. Refer to Stock Incentive Plan amendment at Note 14 Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately 1.182 as a result of the merger. See Note 3 for further information. Represents scheduled payments for the remaining nine-month period ending December 31, 2023. Represents scheduled payments for the remaining nine-month period ending December 31, 2023 Number of options and weighted average exercise price has been adjusted to reflect the exchange of Legacy Dragonfly’s stock options for New Dragonfly stock options at an exchange ratio of approximately 1.182 as a result of the merger.