|
Delaware
(State or other jurisdiction of
incorporation or organization) |
| |
6770
(Primary Standard Industrial
Classification Code Number) |
| |
85-1873463
(I.R.S. Employer
Identification Number) |
|
|
Jeffrey A. Brill
Peter D. Serating Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, NY 10001 (212) 735-3000 |
| |
Kurt J. Berney
Noah K. Kornblith O’Melveny & Myers LLP Two Embarcadero Center 28th Floor San Francisco, CA 94111 (415) 984-8700 |
|
| Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☐ | |
| Non-accelerated filer | | | ☒ | | |
Smaller reporting company
|
| | ☒ | |
| | | | | | |
Emerging growth company
|
| | ☒ | |
| | | | | 1 | | | |
| | | | | 7 | | | |
| | | | | 10 | | | |
| | | | | 26 | | | |
| | | | | 43 | | | |
| | | | | 45 | | | |
| | | | | 46 | | | |
| | | | | 48 | | | |
| | | | | 51 | | | |
| | | | | 97 | | | |
| | | | | 106 | | | |
| | | | | 111 | | | |
| | | | | 145 | | | |
| | | | | 149 | | | |
| | | | | 151 | | | |
| | | | | 157 | | | |
| | | | | 161 | | | |
| | | | | 162 | | | |
| | | | | 163 | | | |
| | | | | 169 | | | |
| | | | | 181 | | | |
| | | | | 186 | | | |
| | | | | 204 | | | |
| | | | | 206 | | | |
| | | | | 212 | | | |
| | | | | 216 | | | |
| | | | | 220 | | | |
| | | | | 233 | | | |
| | | | | 249 | | | |
| | | | | 257 | | | |
| | | | | 263 | | | |
| | | | | 264 | | | |
| | | | | 266 | | | |
| | | | | 271 | | | |
| | | | | 273 | | | |
| | | | | 274 | | | |
| | | | | 274 | | | |
| | | | | 274 | | | |
| | | | | 274 | | | |
| | | | | 274 | | |
| | | | | 274 | | | |
| | | | | 274 | | | |
| | | | | F-1 | | | |
| | | | | II-1 | | |
|
|
| | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
|
|
| | ||
|
|
| |
| | |
Minimum
Redemptions(1) |
| |
%
|
| |
10%
Redemption(2) |
| |
%
|
| |
50%
Redemption(3) |
| |
%
|
| |
75%
Redemption(4) |
| |
%
|
| |
Maximum
Redemption(5) |
| |
%
|
| ||||||||||||||||||||||||||||||
Dragonfly existing shareholders(6)(7)
|
| | | | 38,189,691 | | | | | | 81.8% | | | | | | 38,189,691 | | | | | | 82.4% | | | | | | 38,189,691 | | | | | | 84.8% | | | | | | 38,189,691 | | | | | | 86.3% | | | | | | 38,189,691 | | | | | | 87.9% | | |
Chardan existing public stockholders(8)(9)
|
| | | | 3,093,348 | | | | | | 6.6% | | | | | | 2,784,013 | | | | | | 6.0% | | | | | | 1,546,674 | | | | | | 3.4% | | | | | | 773,337 | | | | | | 1.7% | | | | | | — | | | | | | —% | | |
Initial Stockholders(10)(11)
|
| | | | 3,662,500 | | | | | | 7.9% | | | | | | 3,662,500 | | | | | | 7.9% | | | | | | 3,662,500 | | | | | | 8.1% | | | | | | 3,662,500 | | | | | | 8.3% | | | | | | 3,662,500 | | | | | | 8.4% | | |
Term Loan Lender(12)(13)
|
| | | | 1,708,901 | | | | | | 3.7% | | | | | | 1,697,361 | | | | | | 3.7% | | | | | | 1,651,199 | | | | | | 3.7% | | | | | | 1,622,348 | | | | | | 3.7% | | | | | | 1,593,498 | | | | | | 3.7% | | |
Pro forma Common Stock(14)
|
| | |
|
46,654,440
|
| | | |
|
100.0%
|
| | | |
|
46,333,565
|
| | | |
|
100.0%
|
| | | |
|
45,050,064
|
| | | |
|
100.0%
|
| | | |
|
44,247,876
|
| | | |
|
100.0%
|
| | | |
|
43,445,689
|
| | | |
|
100.0%
|
| |
| | |
Minimum
Redemptions(1) |
| |
%
|
| |
10%
Redemption(2) |
| |
%
|
| |
50%
Redemption(3) |
| |
%
|
| |
75%
Redemption(4) |
| |
%
|
| |
Maximum
Redemption(5) |
| |
%
|
| ||||||||||||||||||||||||||||||
Dragonfly existing shareholders(6)
|
| | | | 85,382,139 | | | | | | 77.9% | | | | | | 85,327,439 | | | | | | 78.2% | | | | | | 85,108,789 | | | | | | 79.1% | | | | | | 84,972,039 | | | | | | 79.6% | | | | | | 84,835,389 | | | | | | 80.2% | | |
Chardan existing public
stockholders(7)(8) |
| | | | 12,580,848 | | | | | | 11.5% | | | | | | 12,271,513 | | | | | | 11.2% | | | | | | 11,034,174 | | | | | | 10.2% | | | | | | 10,260,837 | | | | | | 9.6% | | | | | | 9,487,500 | | | | | | 9.0% | | |
Initial Stockholders(9)(10)
|
| | | | 8,290,358 | | | | | | 7.6% | | | | | | 8,290,358 | | | | | | 7.6% | | | | | | 8,290,358 | | | | | | 7.7% | | | | | | 8,290,358 | | | | | | 7.8% | | | | | | 8,290,358 | | | | | | 7.8% | | |
Term Loan Lender(11)
|
| | | | 3,308,901 | | | | | | 3.0% | | | | | | 3,297,361 | | | | | | 3.0% | | | | | | 3,251,199 | | | | | | 3.0% | | | | | | 3,222,348 | | | | | | 3.0% | | | | | | 3,193,498 | | | | | | 3.0% | | |
Pro forma fully diluted
Common Stock(12) |
| | |
|
109,562,246
|
| | | |
|
100.0%
|
| | | |
|
109,186,671
|
| | | |
|
100.0%
|
| | | |
|
107,684,520
|
| | | |
|
100.0%
|
| | | |
|
106,745,582
|
| | | |
|
100.0%
|
| | | |
|
105,806,745
|
| | | |
|
100.0%
|
| |
| | |
Minimum
Redemptions(1) |
| |
%
|
| |
10%
Redemption(2) |
| |
%
|
| |
50%
Redemption(3) |
| |
%
|
| |
75%
Redemption(4) |
| |
%
|
| |
Maximum
Redemption(5) |
| |
%
|
| ||||||||||||||||||||||||||||||
Dragonfly existing shareholders(6)(7)
|
| | | | 38,189,691 | | | | | | 81.8% | | | | | | 38,189,691 | | | | | | 82.4% | | | | | | 38,189,691 | | | | | | 84.8% | | | | | | 38,189,691 | | | | | | 86.3% | | | | | | 38,189,691 | | | | | | 87.9% | | |
Chardan existing public
stockholders(8)(9) |
| | | | 3,093,348 | | | | | | 6.6% | | | | | | 2,784,013 | | | | | | 6.0% | | | | | | 1,546,674 | | | | | | 3.4% | | | | | | 773,337 | | | | | | 1.7% | | | | | | — | | | | | | —% | | |
Initial Stockholders(10)(11)
|
| | | | 3,662,500 | | | | | | 7.9% | | | | | | 3,662,500 | | | | | | 7.9% | | | | | | 3,662,500 | | | | | | 8.1% | | | | | | 3,662,500 | | | | | | 8.3% | | | | | | 3,662,500 | | | | | | 8.4% | | |
Term Loan Lender(12)(13)
|
| | | | 1,708,901 | | | | | | 3.7% | | | | | | 1,697,361 | | | | | | 3.7% | | | | | | 1,651,199 | | | | | | 3.7% | | | | | | 1,622,348 | | | | | | 3.7% | | | | | | 1,593,498 | | | | | | 3.7% | | |
Pro forma Common Stock(14)
|
| | |
|
46,654,440
|
| | | |
|
100.0%
|
| | | |
|
46,333,565
|
| | | |
|
100.0%
|
| | | |
|
45,050,064
|
| | | |
|
100.0%
|
| | | |
|
44,247,876
|
| | | |
|
100.0%
|
| | | |
|
43,445,689
|
| | | |
|
100.0%
|
| |
Potential sources of dilution:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnout Shares
|
| | | | 40,000,000 | | | | | | | | | | | | 40,000,000 | | | | | | | | | | | | 40,000,000 | | | | | | | | | | | | 40,000,000 | | | | | | | | | | | | 40,000,000 | | | | | | | | |
Public Warrants
|
| | | | 9,487,500 | | | | | | | | | | | | 9,487,500 | | | | | | | | | | | | 9,487,500 | | | | | | | | | | | | 9,487,500 | | | | | | | | | | | | 9,487,500 | | | | | | | | |
Private Warrants
|
| | | | 4,627,858 | | | | | | | | | | | | 4,627,858 | | | | | | | | | | | | 4,627,858 | | | | | | | | | | | | 4,627,858 | | | | | | | | | | | | 4,627,858 | | | | | | | | |
Dragonfly Options
|
| | | | 7,192,448 | | | | | | | | | | | | 7,137,748 | | | | | | | | | | | | 6,919,098 | | | | | | | | | | | | 6,782,348 | | | | | | | | | | | | 6,645,698 | | | | | | | | |
$10 Warrants
|
| | | | 1,600,000 | | | | | | | | | | | | 1,600,000 | | | | | | | | | | | | 1,600,000 | | | | | | | | | | | | 1,600,000 | | | | | | | | | | | | 1,600,000 | | | | | | | | |
| | |
Minimum
Redemptions |
| |
10%
Redemption |
| |
50%
Redemption |
| |
75%
Redemption |
| |
Maximum
Redemption |
| |||||||||||||||
Unredeemed public shares
|
| | | | 3,093,348 | | | | | | 2,784,013 | | | | | | 1,546,674 | | | | | | 773,337 | | | | | | — | | |
Trust proceeds to Dragonfly
|
| | | $ | 31,660,579 | | | | | $ | 28,494,521 | | | | | $ | 15,830,290 | | | | | $ | 7,915,145 | | | | | $ | — | | |
PIPE Investment
|
| | | $ | 5,000,000 | | | | | $ | 5,000,000 | | | | | $ | 5,000,000 | | | | | $ | 5,000,000 | | | | | $ | 5,000,000 | | |
THOR Investment
|
| | | $ | 15,000,000 | | | | | $ | 15,000,000 | | | | | $ | 15,000,000 | | | | | $ | 15,000,000 | | | | | $ | 15,000,000 | | |
Term Loan
|
| | | $ | 75,000,000 | | | | | $ | 75,000,000 | | | | | $ | 75,000,000 | | | | | $ | 75,000,000 | | | | | $ | 75,000,000 | | |
Business Combination Marketing
Agreement – Chardan Capital Markets |
| | | $ | 4,427,500 | | | | | $ | 4,427,500 | | | | | $ | 4,427,500 | | | | | $ | 4,427,500 | | | | | $ | 4,427,500 | | |
Financial advisory services – Chardan Capital Markets
|
| | | $ | 1,170,000 | | | | | $ | 1,170,000 | | | | | $ | 1,170,000 | | | | | $ | 1,170,000 | | | | | $ | 1,170,000 | | |
| | |
Minimum
Redemptions |
| |
10%
Redemption |
| |
50%
Redemption |
| |
75%
Redemption |
| |
Maximum
Redemption |
| |||||||||||||||
Capital market advisory services – Stifel
|
| | | $ | 2,730,000 | | | | | $ | 2,730,000 | | | | | $ | 2,730,000 | | | | | $ | 2,730,000 | | | | | $ | 2,730,000 | | |
Financial advisory services – Stifel
|
| | | $ | 8,000,000 | | | | | $ | 8,000,000 | | | | | $ | 8,000,000 | | | | | $ | 8,000,000 | | | | | $ | 8,000,000 | | |
Effective fee (%)
|
| | | | 12.89% | | | | | | 13.22% | | | | | | 14.73% | | | | | | 15.87% | | | | | | 17.19% | | |
| | |
For the three months ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Net Sales
|
| | | $ | 18,303 | | | | | $ | 15,646 | | |
Cost of Goods Sold
|
| | | | 12,808 | | | | | | 9,805 | | |
Gross profit
|
| | | | 5,495 | | | | | | 5,841 | | |
Operating expenses | | | | | | | | | | | | | |
Research and development
|
| | | | 339 | | | | | | 519 | | |
Sales and marketing
|
| | | | 3,626 | | | | | | 2,096 | | |
General and administrative
|
| | | | 3,092 | | | | | | 1,884 | | |
Total Operating expenses
|
| | | | 7,057 | | | | | | 4,499 | | |
(Loss) Income From Operations
|
| | | | (1,562) | | | | | | 1,342 | | |
Other (Expense) Income | | | | | | | | | | | | | |
Interest (Expense) Income
|
| | | | (1,263) | | | | | | — | | |
Total Other (Expense) Income
|
| | | | (1,263) | | | | | | — | | |
(Loss) Income Before Taxes
|
| | | | (2,825) | | | | | | 1,342 | | |
(Benefit) Provision for Income Tax
|
| | | | (527) | | | | | | 276 | | |
Net (Loss) Income
|
| | | $ | (2,298) | | | | | $ | 1,066 | | |
| | |
For the year ended December 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Net Sales
|
| | | $ | 78,000 | | | | | $ | 47,187 | | |
Cost of Goods Sold
|
| | | | 48,375 | | | | | | 26,580 | | |
Gross profit
|
| | | | 29,625 | | | | | | 20,607 | | |
Operating expenses | | | | | | | | | | | | | |
Research and development
|
| | | | 2,689 | | | | | | 1,239 | | |
Sales and marketing
|
| | | | 10,621 | | | | | | 4,662 | | |
General and administrative
|
| | | | 9,848 | | | | | | 5,960 | | |
Total Operating expenses
|
| | | | 23,158 | | | | | | 11,861 | | |
Income From Operations
|
| | | | 6,467 | | | | | | 8,746 | | |
| | |
For the year ended December 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Other Income | | | | | | | | | | | | | |
Other Income
|
| | | | 1 | | | | | | 15 | | |
Interest Income
|
| | | | (519) | | | | | | 3 | | |
Total Other Income
|
| | | | (518) | | | | | | 18 | | |
Income Before Taxes
|
| | | | 5,949 | | | | | | 8,764 | | |
Income Tax Expense
|
| | | | 1,611 | | | | | | 1,886 | | |
Net Income
|
| | | $ | 4,338 | | | | | $ | 6,878 | | |
|
| | |
As of March 31,
|
| |
As of December 31,
|
| ||||||||||||
| | |
2022
|
| |
2021
|
| |
2020
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Balance Sheet Data: | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 10,063 | | | | | $ | 25,586 | | | | | $ | 6,206 | | |
Total Assets
|
| | | $ | 70,680 | | | | | $ | 76,251 | | | | | $ | 18,807 | | |
Total Liabilities
|
| | | $ | 56,516 | | | | | $ | 60,190 | | | | | $ | 8,252 | | |
Total Equity
|
| | | $ | 12,164 | | | | | $ | 14,061 | | | | | $ | 8,555 | | |
Total Liabilities, Redeemable Preferred Stock and Shareholders’ Equity
|
| | | $ | 70,680 | | | | | $ | 76,251 | | | | | $ | 18,807 | | |
| | |
March 31, 2022
|
| |||
Balance Sheet Data: | | | | | | | |
Cash
|
| | | $ | 648 | | |
Investments held in Trust Account
|
| | | $ | 128,437 | | |
Total assets
|
| | | $ | 129,381 | | |
Total liabilities
|
| | | $ | 816 | | |
Common stock subject to possible redemption
|
| | | $ | 128,398 | | |
Total retained earnings
|
| | | $ | 167 | | |
| | |
For the Three
Months Ended March 31, 2022 |
| |
For the Year Ended
December 31, 2021 |
| ||||||
Statement of Operations Data: | | | | | | | | | | | | | |
Loss from operations
|
| | | $ | (259) | | | | | $ | (358) | | |
Warrant issuance costs
|
| | | $ | — | | | | | $ | (19) | | |
Loss on sale of private warrants
|
| | | $ | — | | | | | $ | (1,254) | | |
Change in fair value of warrant liability
|
| | | $ | 1,435 | | | | | $ | 3,517 | | |
Net gain on investments held in Trust Account
|
| | | $ | 16 | | | | | $ | 24 | | |
Net income (loss)
|
| | | $ | 1,192 | | | | | $ | 1,910 | | |
Basic weighted average shares outstanding
|
| | | | 15,812,500 | | | | | | 7,732,021 | | |
Basic net income (loss) per share of common stock
|
| | | $ | 0.08 | | | | | $ | 0.25 | | |
Diluted weighted average shares outstanding
|
| | | | 15,812,500 | | | | | | 7,991,952 | | |
Diluted net income (loss) per share of common stock
|
| | | $ | 0.08 | | | | | $ | 0.24 | | |
Statement of Cash Flows Data: | | | | | | | | | | | | | |
Net cash used in operating activities
|
| | | $ | (153) | | | | | $ | (547) | | |
Net cash used in investing activities
|
| | | $ | — | | | | | $ | (128,398) | | |
Net cash provided by financing activities
|
| | | $ | — | | | | | $ | 129,719 | | |
| | |
Pro Forma Combined
|
| |||||||||
| | |
Assuming
Minimum Redemptions |
| |
Assuming
Maximum Redemptions |
| ||||||
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data For the Three Months Ended March 31, 2022
|
| | | | | | | | | | | | |
Net loss
|
| | | $ | (3,229) | | | | | $ | (3,229) | | |
Basic and diluted net loss per share
|
| | | $ | (0.07) | | | | | $ | (0.07) | | |
Weighted average shares outstanding
|
| | | | 46,654,440 | | | | | | 43,445,689 | | |
Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data For the Year Ended December 31, 2021
|
| | | | | | | | | | | | |
Net loss
|
| | | $ | (34,767) | | | | | $ | (30,767) | | |
Basic and diluted net loss per share
|
| | | $ | (0.75) | | | | | $ | (0.71) | | |
Weighted average shares outstanding
|
| | | | 46,654,440 | | | | | | 43,445,689 | | |
| | |
Pro Forma Combined
|
| |||||||||
| | |
Assuming
Minimum Redemptions |
| |
Assuming
Maximum Redemptions |
| ||||||
Summary Unaudited Pro Forma Condensed Combined Balance Sheet Data
As of March 31, 2022 |
| | | | | | | | | | | | |
Total assets
|
| | | $ | 116,957 | | | | | $ | 89,296 | | |
Total liabilities
|
| | | $ | 70,905 | | | | | $ | 70,905 | | |
Total stockholders’ equity (deficit)
|
| | | $ | 46,052 | | | | | $ | 18,391 | | |
| | |
Minimum
Redemptions(1) |
| |
%
|
| |
10%
Redemption(2) |
| |
%
|
| |
50%
Redemption(3) |
| |
%
|
| |
75%
Redemption(4) |
| |
%
|
| |
Maximum
Redemption(5) |
| |
%
|
| ||||||||||||||||||||||||||||||
Dragonfly existing shareholders(6)
|
| | | | 85,382,139 | | | | | | 77.9% | | | | | | 85,327,439 | | | | | | 78.2% | | | | | | 85,108,789 | | | | | | 79.1% | | | | | | 84,972,039 | | | | | | 79.6% | | | | | | 84,835,389 | | | | | | 80.2% | | |
Chardan existing public stockholders(7)(8)
|
| | | | 12,580,848 | | | | | | 11.5% | | | | | | 12,271,513 | | | | | | 11.2% | | | | | | 11,034,174 | | | | | | 10.2% | | | | | | 10,260,837 | | | | | | 9.6% | | | | | | 9,487,500 | | | | | | 9.0% | | |
Initial Stockholders(9)(10)
|
| | | | 8,290,358 | | | | | | 7.6% | | | | | | 8,290,358 | | | | | | 7.6% | | | | | | 8,290,358 | | | | | | 7.7% | | | | | | 8,290,358 | | | | | | 7.8% | | | | | | 8,290,358 | | | | | | 7.8% | | |
Term Loan Lender(11)
|
| | | | 3,308,901 | | | | | | 3.0% | | | | | | 3,297,361 | | | | | | 3.0% | | | | | | 3,251,199 | | | | | | 3.0% | | | | | | 3,222,348 | | | | | | 3.0% | | | | | | 3,193,498 | | | | | | 3.0% | | |
Pro forma fully diluted Common Stock(12)
|
| | |
|
109,562,246
|
| | | |
|
100.0%
|
| | | |
|
109,186,671
|
| | | |
|
100.0%
|
| | | |
|
107,684,520
|
| | | |
|
100.0%
|
| | | |
|
106,745,582
|
| | | |
|
100.0%
|
| | | |
|
105,806,745
|
| | | |
|
100.0%
|
| |
|
Chardan public shares
|
| | | | 12,650,000 | | |
|
Chardan Founder Shares
|
| | | | 3,162,500 | | |
|
Total Chardan shares
|
| | | | 15,812,500 | | |
|
Total funds in trust available for initial business combination(1)
|
| | | $ | 128,397,500 | | |
|
Implied value per share
|
| | | $ | 8.12 | | |
|
Public stockholders’ investment per share(2)
|
| | | $ | 10.00 | | |
|
Sponsor’s investment per share
|
| | | $ | 0.0079 | | |
| | |
LTM
Revenue Growth |
| |
2022
Revenue Growth |
| |
2023
Revenue Growth |
| |
LTM
EBITDA Growth |
| |
2022
EBITDA Growth |
| |
2023
EBITDA Growth |
| ||||||||||||||||||
Mature Lithium-Ion Battery Companies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BYD Company Limited
|
| | | | 36.0% | | | | | | 53.2% | | | | | | 24.5% | | | | | | -26.3% | | | | | | 47.9% | | | | | | 27.4% | | |
Samsung SDI Co., Ltd.
|
| | | | 20.0% | | | | | | 31.2% | | | | | | 18.6% | | | | | | 32.6% | | | | | | 34.7% | | | | | | 21.7% | | |
Solid State Battery Companies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
QuantumScape Corporation
|
| | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | |
Solid Power, Inc.
|
| | | | 29.0% | | | | | | 47.5% | | | | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | |
Energy Storage/Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Enovix Corporation
|
| | | | NM | | | | | | NM | | | | | | 1376.3% | | | | | | NM | | | | | | NM | | | | | | NM | | |
Eos Energy Enterprises, Inc.
|
| | | | 1918.8% | | | | | | 987.4% | | | | | | 321.2% | | | | | | NM | | | | | | NM | | | | | | NM | | |
ESS Tech, Inc.
|
| | | | NM | | | | | | NM | | | | | | 2523.4% | | | | | | NM | | | | | | NM | | | | | | NM | | |
Li-Cycle Holdings Corp.
|
| | | | 482.4% | | | | | | 417.9% | | | | | | 376.9% | | | | | | NM | | | | | | NM | | | | | | NM | | |
Microvast Holdings, Inc.
|
| | | | 41.3% | | | | | | 38.8% | | | | | | 79.1% | | | | | | NM | | | | | | NM | | | | | | NM | | |
Stem, Inc.
|
| | | | 221.4% | | | | | | 207.2% | | | | | | 62.5% | | | | | | NM | | | | | | NM | | | | | | NM | | |
| | |
LTM
EBITDA Margin |
| |
2022
EBITDA Margin |
| |
2023
EBITDA Margin |
| |||||||||
Mature Lithium-Ion Battery Companies | | | | | | | | | | | | | | | | | | | |
BYD Company Limited
|
| | | | 7.3% | | | | | | 8.0% | | | | | | 8.2% | | |
Samsung SDI Co., Ltd.
|
| | | | 16.9% | | | | | | 17.4% | | | | | | 17.8% | | |
Solid State Battery Companies | | | | | | | | | | | | | | | | | | | |
QuantumScape Corporation
|
| | | | NM | | | | | | NM | | | | | | NM | | |
Solid Power, Inc.
|
| | | | NM | | | | | | NM | | | | | | NM | | |
Energy Storage/Other | | | | | | | | | | | | | | | | | | | |
Enovix Corporation
|
| | | | NM | | | | | | NM | | | | | | NM | | |
Eos Energy Enterprises, Inc.
|
| | | | NM | | | | | | NM | | | | | | NM | | |
ESS Tech, Inc.
|
| | | | NM | | | | | | NM | | | | | | NM | | |
Li-Cycle Holdings Corp.
|
| | | | NM | | | | | | NM | | | | | | 11.5% | | |
Microvast Holdings, Inc.
|
| | | | NM | | | | | | NM | | | | | | NM | | |
Stem, Inc.
|
| | | | NM | | | | | | NM | | | | | | 2.6% | | |
| | |
EV/ LTM
Revenue |
| |
EV/ 2022
Revenue |
| |
EV/ 2023
Revenue |
| |
EV/ LTM
EBITDA |
| |
EV/ 2022
EBITDA |
| |
EV/ 2023
EBITDA |
| ||||||||||||||||||
Mature Lithium-Ion Battery Companies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BYD Company Limited
|
| | | | 2.72x | | | | | | 1.99x | | | | | | 1.60x | | | | | | 36.9x | | | | | | 24.8x | | | | | | 19.5x | | |
Samsung SDI Co., Ltd.
|
| | | | 2.38x | | | | | | 1.81x | | | | | | 1.53x | | | | | | 13.9x | | | | | | 10.4x | | | | | | 8.6x | | |
Solid State Battery Companies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
QuantumScape Corporation
|
| | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | |
Solid Power, Inc.
|
| | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | | | | | NM | | |
Energy Storage/Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Enovix Corporation
|
| | | | NM | | | | | | 90.58x | | | | | | 6.14x | | | | | | NM | | | | | | NM | | | | | | NM | | |
Eos Energy Enterprises, Inc.
|
| | | | 16.25x | | | | | | 2.51x | | | | | | 0.60x | | | | | | NM | | | | | | NM | | | | | | NM | | |
ESS Tech, Inc.
|
| | | | NM | | | | | | 49.55x | | | | | | 1.89x | | | | | | NM | | | | | | NM | | | | | | NM | | |
Li-Cycle Holdings Corp.
|
| | | | 65.03x | | | | | | 17.36x | | | | | | 3.64x | | | | | | NM | | | | | | NM | | | | | | 31.7x | | |
Microvast Holdings, Inc.
|
| | | | 4.62x | | | | | | 3.33x | | | | | | 1.86x | | | | | | NM | | | | | | NM | | | | | | NM | | |
Stem, Inc.
|
| | | | 7.79x | | | | | | 3.05x | | | | | | 1.87x | | | | | | NM | | | | | | NM | | | | | | 71.4x | | |
|
Sources of Funds
(in millions) |
| |
Uses
(in millions) |
| ||||||||||||
|
Cash held in Trust Account(1)
|
| | | $ | 31.7 | | | |
Common stock of combined company
issued to Dragonfly stockholders(2) |
| | | $ | 381.9 | | |
|
PIPE Investment, Term Loan and THOR
Investment |
| | | | 92.8 | | | |
Transaction and other costs and existing
debt settlement(3) |
| | | | 77.0 | | |
|
Common stock of combined company
issued to Dragonfly stockholders(2) |
| | | | 381.9 | | | |
Cash to combined company Balance
Sheet |
| | | | 47.5 | | |
|
Total Sources
|
| | | $ | 506.4 | | | |
Total Uses
|
| | | $ | 506.4 | | |
|
Sources of Funds
(in millions) |
| |
Uses
(in millions) |
| ||||||||||||
|
Cash held in Trust Account(1)
|
| | | $ | — | | | |
Common stock of combined company
issued to Dragonfly stockholders(2) |
| | | $ | 381.9 | | |
|
PIPE Investment, Term Loan and THOR
Investment |
| | | | 92.8 | | | |
Transaction and other costs and existing
debt settlement(3) |
| | | | 73.0 | | |
|
Common stock of combined company
issued to Dragonfly stockholders(2) |
| | | | 381.9 | | | |
Cash to combined company Balance
Sheet |
| | | | 19.8 | | |
|
Total Sources
|
| | | $ | 474.7 | | | |
Total Uses
|
| | | $ | 474.7 | | |
| | |
Current Certificate of Incorporation
|
| |
Second Amended and Restated
Certificate of Incorporation |
|
Number of Authorized Shares | | |
Chardan is currently authorized to issue 51,000,000 shares of which 50,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of August 11, 2022 there were 6,255,848 shares of common stock outstanding.
Chardan’s certificate provides that, promptly after the consummation of the Business Combination, the shares sold pursuant to the Chardan IPO will be converted into cash at a per share price equal to the quotient determined by dividing (i) the amount then held inf the trust fund less any income taxes owed on such funds but not yet paid, calculated as of two business days prior to the consummation of the Business Combination or the filing of the amendment, as applicable, by (ii) the total number of the shares sold pursuant to the Chardan IPO then outstanding.
|
| |
The total number of shares of capital stock that New Dragonfly is authorized to issue is 175,000,000 shares, consisting of 170,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.
Immediately following consummation of the Business Combination, Dragonfly common stock will be cancelled in exchange for the right to receive, or the reservation of, an aggregate of 41,500,000 shares of New Dragonfly common stock, or, as applicable, shares underlying awards based on Dragonfly common stock, representing the Aggregate Merger Consideration.
New Dragonfly is expected to have approximately 46,656,151 shares of New Dragonfly common stock outstanding, assuming minimum redemptions and no exercise of dissenter’s rights.
|
|
Name | | |
Chardan NexTech Acquisition 2 Corp.
|
| | Dragonfly Energy Holdings Corp. | |
Purpose | | |
The purpose of the Chardan is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
|
| |
The second amended and restated certificate of incorporation provides that the purpose of New Dragonfly is to engage in any lawful act or activity for which a corporation may be organized under the DGCL as the same exists or may hereafter be
|
|
| | |
Current Certificate of Incorporation
|
| |
Second Amended and Restated
Certificate of Incorporation |
|
| | | | | | amended. | |
Provisions Specific to a Blank Check Company | | |
Article Fifth governs the Business Combination, but will be terminated upon the consummation of such Business Combination.
|
| |
No specific provision exists as to operating as a blank check company.
|
|
Classified Board | | | Not applicable. | | |
The directors of New Dragonfly (other than those directors elected by the holders of any series or class of preferred stock provided for or fixed pursuant to Article IV of the second amended and restated certificate of incorporation) shall be and are divided into three (3) classes, designated Class A, Class B and Class C.
Each class shall consist, as nearly as may be possible, of one-third (1/3) of the total number of directors constituting the entire board. The board may assign members of the board already in office upon the effectiveness of the filing of the certificate with the Secretary of State of the State of Delaware (the “Effective Time”) to such classes. Subject to the rights of holders of any series or class of preferred stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class A shall serve for a term expiring at New Dragonfly’s first annual meeting of stockholders held after the Effective Time; each director initially assigned to Class B shall serve for a term expiring at New Dragonfly’s second annual meeting of stockholders held after the Effective Time; and each director initially assigned to Class C shall serve for a term expiring at New Dragonfly’s third annual meeting of stockholders held after the Effective Time.
|
|
Choice of Forum | | |
To the fullest extent permitted by law, unless Chardan consents in writing to the selection for an alternative forum, (a) any derivative action or proceeding, (b) any action asserting a claim for breach of a fiduciary duty owed by any
|
| |
The second amended and restated certificate of incorporation generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to:
|
|
| | |
Current Certificate of Incorporation
|
| |
Second Amended and Restated
Certificate of Incorporation |
|
| | |
current or former director, officer, employee, agent or stockholder of the Chardan to Chardan or the its stockholders, (c) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, the certificate of incorporation, or the bylaws, or (d) any action asserting a claim governed by the internal affairs doctrine, the forum shall be Court of Chancery of the State of Delaware (subject to certain exceptions).
The above provision does not apply to suits brought to enforce any duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. Additionally, unless Chardan consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
|
| |
(i) any derivative action or proceeding brought on behalf of New Dragonfly, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of New Dragonfly to New Dragonfly or New Dragonfly’s stockholders, (iii) any action asserting a claim against New Dragonfly, its directors, officers, or employees arising pursuant to any provision of the DGCL or the second amended and restated certificate of incorporation or the bylaws, (iv) any action asserting a claim against New Dragonfly, its directors, officers, or employees governed by the internal affairs doctrine, subject to certain exceptions. The exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
|
|
Name
|
| |
Position
|
|
Kerry Propper | | | Co-Founder and Director (Chairman) | |
Jonas Grossman | | | Co-Founder, Chief Executive Officer, President, Secretary, Treasurer and Director | |
Alex Weil | | | Chief Financial Officer and Director | |
Jonathan Biele | | | Director | |
Perry Boyle | | | Director | |
Roderick Hardamon | | | Director | |
Jory Des Jardins | | | Director | |
Hitesh Thakrar | | | Director | |
Todd Thomson | | | Director | |
Name
|
| |
Age
|
| |
Position(s) Held
|
|
Dr. Denis Phares | | |
49
|
| |
Co-Founder, Chief Executive Officer and Chairman of the Board
|
|
Sean Nichols | | |
46
|
| | Co-Founder and Chief Operating Officer | |
John Marchetti | | |
51
|
| | Chief Financial Officer | |
Nicole Harvey | | |
44
|
| | General Counsel, Compliance Officer and Corporate Secretary | |
Luisa Ingargiola | | |
54
|
| | Independent Director | |
Brian Nelson | | |
51
|
| | Independent Director | |
Name
|
| |
Age
|
| |
Position(s) Held
|
|
Dr. Denis Phares | | |
49
|
| | Chairman, President and Chief Executive Officer | |
Sean Nichols | | |
51
|
| | Chief Operating Officer | |
John Marchetti | | |
51
|
| | Chief Financial Officer | |
Nicole Harvey | | |
44
|
| | General Counsel, Compliance Officer and Corporate Secretary | |
Luisa Ingargiola | | |
54
|
| | Director | |
Brian Nelson | | |
51
|
| | Director | |
Perry Boyle | | |
58
|
| | Director | |
Jonathan Bellows | | |
[•]
|
| | Director | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($)(1) |
| |
Stock
Awards ($) |
| |
Option
Awards ($)(2) |
| |
Non-Equity
Incentive Plan Compensation ($) |
| |
Non-Qualified
Deferred Compensation Earnings ($) |
| |
All
Other Compensation ($)(3) |
| |
Total
($) |
| |||||||||||||||||||||||||||
Dr. Denis Phares
|
| | | | 2021 | | | | | | 579,593 | | | | | | 362,137 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 22,234 | | | | | | 963,964 | | |
Chief Executive Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sean Nichols
|
| | | | 2021 | | | | | | 579,593 | | | | | | 362,137 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,244 | | | | | | 961,974 | | |
Chief Operating Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
John Marchetti(4)
|
| | | | 2021 | | | | | | 91,154 | | | | | | 82,000 | | | | | | — | | | | | | 682,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 855,154 | | |
Chief Financial Officer
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
Option Awards
|
| |||||||||||||||||||||||||||
Name
|
| |
Number of
Securities Underlying Unexercised Options (#) Exercisable |
| |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |||||||||||||||
Dr. Denis Phares
|
| | | | — | | | | | | 250,000(1) | | | | | | — | | | | | | 0.41 | | | | | | 12/4/24 | | |
Sean Nichols
|
| | | | — | | | | | | 250,000(1) | | | | | | — | | | | | | 0.38 | | | | | | 12/4/29 | | |
John Marchetti
|
| | | | 200,000(2) | | | | | | — | | | | | | — | | | | | | 3.41 | | | | | | 9/12/31 | | |
Name
|
| |
Fees Earned
or Paid in Cash ($) |
| |
Stock
Awards ($) |
| |
Option
Awards ($)(1)(2) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| |||||||||||||||
Luisa Ingargiola
|
| | | | — | | | | | | — | | | | | | 281,325 | | | | | | — | | | | | | 281,325 | | |
| | |
Years ended December 31,
|
| |||||||||||||||||||||
| | |
2020A
|
| |
2021A
|
| |
2022E
|
| |
2023E
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenue
|
| |
$47,187
|
| |
$78,000
|
| |
$115,373
|
| |
$255,085
|
| ||||||||||||
Gross profit
|
| | | | 20,607 | | | | | | 29,625 | | | | | | 43,586 | | | | | | 102,664 | | |
Total Operating Expenses
|
| | | | 11,861 | | | | | | 23,158 | | | | | | 63,240 | | | | | | 67,407 | | |
Net Income
|
| | | | 6,878 | | | | | | 4,338 | | | | | | (25,783) | | | | | | 26,169 | | |
EBITDA
|
| | | | 8,944 | | | | | | 7,084 | | | | | | (18,093) | | | | | | 39,144 | | |
Adjusted EBITDA
|
| | | | 9,370 | | | | | | 8,725 | | | | | | 12,178 | | | | | | 40,968 | | |
| | |
Assuming
Minimum Redemptions (Shares) |
| |
%
|
| |
Assuming
Maximum Redemptions (Shares) |
| |
%
|
| ||||||||||||
Dragonfly existing shareholders(1)(2)
|
| | | | 38,189,691 | | | | | | 81.8% | | | | | | 38,189,691 | | | | | | 87.9% | | |
Chardan existing public stockholders(3)(4)
|
| | | | 3,093,348 | | | | | | 6.6% | | | | | | — | | | | | | —% | | |
Initial Stockholders(5)(6)
|
| | | | 3,662,500 | | | | | | 7.9% | | | | | | 3,662,500 | | | | | | 8.4% | | |
Term Loan Lender(7)
|
| | | | 1,708,901 | | | | | | 3.7% | | | | | | 1,593,498 | | | | | | 3.7% | | |
Pro forma Common Stock(8)
|
| | |
|
46,654,440
|
| | | |
|
100.0%
|
| | | |
|
43,445,689
|
| | | |
|
100.0%
|
| |
| | |
CNTQ
(Historical) |
| |
Dragonfly
(Historical) |
| |
THOR
Investment (Note 3) |
| | | | | | | |
Transaction
Accounting Adjustments (Assuming Minimum Redemptions) |
| | | | | | | |
Pro Forma
Combined (Assuming Minimum Redemptions) |
| |
Transaction
Accounting Adjustments (Assuming Maximum Redemptions) |
| | | | | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| |||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 648 | | | | | $ | 10,063 | | | | | $ | 15,000 | | | | |
|
A
|
| | | | $ | 31,661 | | | | |
|
C
|
| | | | $ | 58,088 | | | | | $ | (31,661) | | | | |
|
L
|
| | | | $ | 30,427 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 77,750 | | | | |
|
D
|
| | | | | | | | | | | 4,000 | | | | |
|
M
|
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (27,078) | | | | |
|
E
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (41,956) | | | | |
|
F
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (8,000) | | | | |
|
J
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Restricted cash
|
| | | | — | | | | | | 3,044 | | | | | | — | | | | | | | | | | | | (3,044) | | | | |
|
F
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Accounts receivable
|
| | | | — | | | | | | 2,000 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 2,000 | | | | | | — | | | | | | | | | | | | 2,000 | | |
Inventory
|
| | | | — | | | | | | 33,073 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 33,073 | | | | | | — | | | | | | | | | | | | 33,073 | | |
Prepaid expenses and other current assets
|
| | | | 296 | | | | | | 3,222 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 3,518 | | | | | | — | | | | | | | | | | | | 3,518 | | |
Prepaid inventory
|
| | | | — | | | | | | 5,036 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 5,036 | | | | | | — | | | | | | | | | | | | 5,036 | | |
Deferred issuance costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,000 | | | | |
|
K
|
| | | | | 1,000 | | | | | | — | | | | | | | | | | | | 1,000 | | |
Total current assets
|
| | | | 944 | | | | | | 56,438 | | | | | | 15,000 | | | | | | | | | | | | 30,333 | | | | | | | | | | | | 102,715 | | | | | | (27,661) | | | | | | | | | | | | 75,054 | | |
Investments held in Trust Account
|
| | | | 128,437 | | | | | | — | | | | | | — | | | | | | | | | | | | (96,776) | | | | |
|
B
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (31,661) | | | | |
|
C
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | — | | | | | | 8,731 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 8,731 | | | | | | — | | | | | | | | | | | | 8,731 | | |
Deferred tax asset
|
| | | | — | | | | | | 76 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 76 | | | | | | — | | | | | | | | | | | | 76 | | |
Operating lease right of use asset
|
| | | | — | | | | | | 5,435 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 5,435 | | | | | | — | | | | | | | | | | | | 5,435 | | |
Total assets
|
| | | $ | 129,381 | | | | | $ | 70,680 | | | | | $ | 15,000 | | | | | | | | | | | $ | (98,104) | | | | | | | | | | | $ | 116,957 | | | | | $ | (27,661) | | | | | | | | | | | $ | 89,296 | | |
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | | $ | 214 | | | | | $ | 10,113 | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 10,327 | | | | | $ | — | | | | | | | | | | | | 10,327 | | |
Customer deposits
|
| | | | — | | | | | | 727 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 727 | | | | | | — | | | | | | | | | | | | 727 | | |
Income tax payable
|
| | | | — | | | | | | 620 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 620 | | | | | | — | | | | | | | | | | | | 620 | | |
Notes payable, current portion
|
| | | | — | | | | | | 5,173 | | | | | | — | | | | | | | | | | | | (5,173) | | | | |
|
F
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Operating lease liability, current portion
|
| | | | — | | | | | | 1,106 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,106 | | | | | | — | | | | | | | | | | | | 1,106 | | |
Obligation to issue common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,000 | | | | |
|
K
|
| | | | | 1,000 | | | | | | — | | | | | | | | | | | | 1,000 | | |
Total current liabilities
|
| | | | 214 | | | | | | 17,739 | | | | | | — | | | | | | | | | | | | (4,173) | | | | | | | | | | | | 13,780 | | | | | | — | | | | | | | | | | | | 13,780 | | |
Operating lease liability, net of current portion
|
| | | | — | | | | | | 4,409 | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 4,409 | | | | | | — | | | | | | | | | | | | 4,409 | | |
Notes payable-non current, net of debt discount
|
| | | | — | | | | | | 34,368 | | | | | | — | | | | | | | | | | | | 52,114 | | | | |
|
D
|
| | | | | 52,114 | | | | | | — | | | | | | | | | | | | 52,114 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (34,368) | | | | |
|
F
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liabilities
|
| | | | 602 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 602 | | | | | | — | | | | | | | | | | | | 602 | | |
Total liabilities
|
| | | | 816 | | | | | | 56,516 | | | | | | — | | | | | | | | | | | | 13,573 | | | | | | | | | | | | 70,905 | | | | | | — | | | | | | | | | | | | 70,905 | | |
Common stock subject to possible redemption
|
| | | | 128,398 | | | | | | — | | | | | | — | | | | | | | | | | | | (96,776) | | | | |
|
B
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (31,622) | | | | |
|
G
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Convertible preferred stock
|
| | | | — | | | | | | 2,000 | | | | | | — | | | | | | | | | | | | (2,000) | | | | |
|
H
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Stockholders’ equity (deficit)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 1 | | | | | | 4 | | | | | | 2 | | | | |
|
A
|
| | | | | 3 | | | | |
|
D
|
| | | | | 45 | | | | | | (3) | | | | |
|
L
|
| | | | | 42 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3 | | | | |
|
G
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 32 | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Additional paid-in capital
|
| | | | — | | | | | | 2,020 | | | | | | 14,998 | | | | |
|
A
|
| | | | | 25,633 | | | | |
|
D
|
| | | | | 64,504 | | | | | | (31,658) | | | | |
|
L
|
| | | | | 32,846 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (11,900) | | | | |
|
E
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 31,619 | | | | |
|
G
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,968 | | | | |
|
H
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 166 | | | | |
|
I
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Accumulated (deficit) earnings
|
| | | | 166 | | | | | | 10,140 | | | | | | — | | | | | | | | | | | | (15,178) | | | | |
|
E
|
| | | | | (18,497) | | | | | | 4,000 | | | | |
|
M
|
| | | | | (14,497) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (5,459) | | | | |
|
F
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (166) | | | | |
|
I
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (8,000) | | | | |
|
J
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total stockholders’ equity (deficit)
|
| | | | 167 | | | | | | 12,164 | | | | | | 15,000 | | | | | | | | | | | | 18,721 | | | | | | | | | | | | 46,052 | | | | | | (27,661) | | | | | | | | | | | | 18,391 | | |
Total liabilities, temporary equity and stockholders’ equity (deficit)
|
| | | $ | 129,381 | | | | | $ | 70,680 | | | | | $ | 15,000 | | | | | | | | | | | $ | (98,104) | | | | | | | | | | | $ | 116,957 | | | | | $ | (27,661) | | | | | | | | | | | $ | 89,296 | | |
| | |
CNTQ
(Historical) |
| |
Dragonfly
(Historical) |
| |
Transaction
Accounting Adjustments (Assuming Minimum Redemptions) |
| | | | | | | |
Pro Forma
Combined (Assuming Minimum Redemptions) |
| |
Transaction
Accounting Adjustments (Assuming Maximum Redemptions) |
| |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| ||||||||||||||||||
Net Sales
|
| | | $ | — | | | | | $ | 18,303 | | | | | $ | — | | | | | | | | | | | $ | 18,303 | | | | | $ | — | | | | | $ | 18,303 | | |
Cost of goods sold
|
| | | | — | | | | | | 12,808 | | | | | | — | | | | | | | | | | | | 12,808 | | | | | | — | | | | | | 12,808 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Formation and operating costs
|
| | | | 208 | | | | | | — | | | | | | — | | | | | | | | | | | | 208 | | | | | | — | | | | | | 208 | | |
Franchise tax expense
|
| | | | 51 | | | | | | — | | | | | | — | | | | | | | | | | | | 51 | | | | | | — | | | | | | 51 | | |
Research and development
|
| | | | — | | | | | | 339 | | | | | | — | | | | | | | | | | | | 339 | | | | | | — | | | | | | 339 | | |
General and administrative
|
| | | | — | | | | | | 3,626 | | | | | | — | | | | | | | | | | | | 3,626 | | | | | | — | | | | | | 3,626 | | |
Selling and marketing
|
| | | | — | | | | | | 3,092 | | | | | | — | | | | | | | | | | | | 3,092 | | | | | | — | | | | | | 3,092 | | |
Loss from operations
|
| | | | (259) | | | | | | (1,562) | | | | | | — | | | | | | | | | | | | (1,821) | | | | | | — | | | | | | (1,821) | | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | — | | | | | | (1,263) | | | | | | 1,263 | | | | |
|
DD
|
| | | | | (3,370) | | | | | | — | | | | | | (3,370) | | |
| | | | | | | | | | | | | | | | | (3,370) | | | | |
|
EE
|
| | | | | — | | | | | | — | | | | | | — | | |
Net gain on investments held in Trust Account
|
| | | | 16 | | | | | | — | | | | | | (16) | | | | |
|
AA
|
| | | | | — | | | | | | — | | | | | | — | | |
Change in fair value of warrant liability
|
| | | | 1,435 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,435 | | | | | | — | | | | | | 1,435 | | |
Total other income (expense)
|
| | | | 1,451 | | | | | | (1,263) | | | | | | (2,123) | | | | | | | | | | | | (1,935) | | | | | | — | | | | | | (1,935) | | |
Income (loss) before income taxes
|
| | | | 1,192 | | | | | | (2,825) | | | | | | (2,123) | | | | | | | | | | | | (3,756) | | | | | | — | | | | | | (3,756) | | |
Income tax benefit
|
| | | | — | | | | | | (527) | | | | | | — | | | | | | | | | | | | (527) | | | | | | — | | | | | | (527) | | |
Net income (loss)
|
| | | $ | 1,192 | | | | | $ | (2,298) | | | | | $ | (2,123) | | | | | | | | | | | $ | (3,229) | | | | | $ | — | | | | | $ | (3,229) | | |
Net income (loss) per share (Note 4): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding – basic
|
| | | | 15,812,500 | | | | | | 20,914,344 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income per share – basic
|
| | | $ | 0.08 | | | | | $ | (0.11) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding – diluted
|
| | | | 15,812,500 | | | | | | 20,914,344 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income per share – diluted
|
| | | $ | 0.08 | | | | | $ | (0.11) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding – basic and diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 46,654,440 | | | | | | | | | | | | 43,445,689 | | |
Net loss per share – basic and diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.07) | | | | | | | | | | | $ | (0.07) | | |
| | |
CNTQ
(Historical) |
| |
Dragonfly
(Historical) |
| |
Transaction
Accounting Adjustments (Assuming Minimum Redemptions) |
| | | | | | | |
Pro Forma
Combined (Assuming Minimum Redemptions) |
| |
Transaction
Accounting Adjustments (Assuming Maximum Redemptions) |
| | | | | | | |
Pro Forma
Combined (Assuming Maximum Redemptions) |
| ||||||||||||||||||
Net Sales
|
| | | $ | — | | | | | $ | 78,000 | | | | | $ | — | | | | | | | | | | | $ | 78,000 | | | | | $ | — | | | | | | | | | | | $ | 78,000 | | |
Cost of goods sold
|
| | | | — | | | | | | 48,375 | | | | | | — | | | | | | | | | | | | 48,375 | | | | | | — | | | | | | | | | | | | 48,375 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Formation and operating costs
|
| | | | 292 | | | | | | — | | | | | | — | | | | | | | | | | | | 292 | | | | | | — | | | | | | | | | | | | 292 | | |
Franchise tax expense
|
| | | | 66 | | | | | | — | | | | | | — | | | | | | | | | | | | 66 | | | | | | — | | | | | | | | | | | | 66 | | |
Research and development
|
| | | | — | | | | | | 2,689 | | | | | | — | | | | | | | | | | | | 2,689 | | | | | | — | | | | | | | | | | | | 2,689 | | |
General and administrative
|
| | | | — | | | | | | 10,621 | | | | | | 15,178 | | | | |
|
BB
|
| | | | | 33,799 | | | | | | (4,000) | | | | |
|
FF
|
| | | | | 29,799 | | |
| | | | | | | | | | | | | | | | | 8,000 | | | | |
|
CC
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Selling and marketing
|
| | | | — | | | | | | 9,848 | | | | | | — | | | | | | | | | | | | 9,848 | | | | | | — | | | | | | | | | | | | 9,848 | | |
(Loss) income from operations
|
| | | | (358) | | | | | | 6,467 | | | | | | (23,178) | | | | | | | | | | | | (17,069) | | | | | | 4,000 | | | | | | | | | | | | (13,069) | | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other income
|
| | | | — | | | | | | 1 | | | | | | — | | | | | | | | | | | | 1 | | | | | | — | | | | | | | | | | | | 1 | | |
Interest expense
|
| | | | — | | | | | | (519) | | | | | | 519 | | | | |
|
DD
|
| | | | | (12,873) | | | | | | — | | | | | | | | | | | | (12,873) | | |
| | | | | | | | | | | | | | | | | (12,873) | | | | |
|
EE
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Loss on extinguishment of indebtedness
|
| | | | — | | | | | | — | | | | | | (5,459) | | | | |
|
DD
|
| | | | | (5,459) | | | | | | — | | | | | | | | | | | | (5,459) | | |
Warrant issuance costs
|
| | | | (19) | | | | | | — | | | | | | — | | | | | | | | | | | | (19) | | | | | | — | | | | | | | | | | | | (19) | | |
Loss on sale of private warrants
|
| | | | (1,254) | | | | | | — | | | | | | — | | | | | | | | | | | | (1,254) | | | | | | — | | | | | | | | | | | | (1,254) | | |
Net gain on investments held in Trust Account
|
| | | | 24 | | | | | | — | | | | | | (24) | | | | |
|
AA
|
| | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Change in fair value of warrant liability
|
| | | | 3,517 | | | | | | — | | | | | | — | | | | | | | | | | | | 3,517 | | | | | | — | | | | | | | | | | | | 3,517 | | |
Total other income (expense)
|
| | | | 2,268 | | | | | | (518) | | | | | | (17,837) | | | | | | | | | | | | (16,087) | | | | | | — | | | | | | | | | | | | (16,087) | | |
Income (loss) before income taxes
|
| | | | 1,910 | | | | | | 5,949 | | | | | | (41,015) | | | | | | | | | | | | (33,156) | | | | | | 4,000 | | | | | | | | | | | | (29,156) | | |
Income tax expense
|
| | | | — | | | | | | 1,611 | | | | | | — | | | | | | | | | | | | 1,611 | | | | | | — | | | | | | | | | | | | 1,611 | | |
Net income (loss)
|
| | | $ | 1,910 | | | | | $ | 4,338 | | | | | $ | (41,015) | | | | | | | | | | | $ | (34,767) | | | | | $ | 4,000 | | | | | | | | | | | $ | (30,767) | | |
Net income (loss) per share (Note 4): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding – basic
|
| | | | 7,732,021 | | | | | | 20,101,129 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income per share – basic
|
| | | $ | 0.25 | | | | | $ | 0.15 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding – diluted
|
| | | | 7,991,952 | | | | | | 21,931,108 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income per share – diluted
|
| | | $ | 0.24 | | | | | $ | 0.13 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding – basic and diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 46,654,440 | | | | | | | | | | | | | | | | | | 43,445,689 | | |
Net loss per share – basic and diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.75) | | | | | | | | | | | | | | | | | $ | (0.71) | | |
| | |
Three Months Ended
March 31, 2022(1) |
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Year Ended
December 31, 2021(1) |
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Assuming
Minimum Redemptions |
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Assuming
Maximum Redemptions |
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Assuming
Minimum Redemptions |
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Assuming
Maximum Redemptions |
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Pro forma net loss
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| | | $ | (3,229) | | | | | $ | (3,229) | | | | | $ | (34,767) | | | | | $ | (30,767) | | |
Weighted average shares outstanding – basic and diluted(2)
|
| | | | 46,654,440 | | | | | | 43,445,689 | | | | | | 46,654,440 | | | | | | 43,445,689 | | |
Pro forma net loss per share – basic and diluted
|
| | | $ | (0.07) | | | | | $ | (0.07) | | | | | $ | (0.75) | | | | | $ | (0.71) | | |
Excluded securities:(3)
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| | | | | | | | | | | | | | | | | | | | | | | | |
Earnout Shares
|
| | | | 40,000,000 | | | | | | 40,000,000 | | | | | | 40,000,000 | | | | | | 40,000,000 | | |
Public Warrants
|
| | | | 9,487,500 | | | | | | 9,487,500 | | | | | | 9,487,500 | | | | | | 9,487,500 | | |
Private Warrants
|
| | | | 4,627,858 | | | | | | 4,627,858 | | | | | | 4,627,858 | | | | | | 4,627,858 | | |
Dragonfly Options
|
| | | | 4,075,348 | | | | | | 4,075,348 | | | | | | 4,075,348 | | | | | | 4,075,348 | | |
$10 Warrants
|
| | | | 1,600,000 | | | | | | 1,600,000 | | | | | | 1,600,000 | | | | | | 1,600,000 | | |
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Three months ended
March 31, |
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2022
|
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% Net
Sales |
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2021
|
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% Net
Sales |
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| | |
(in thousands)
|
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Net Sales . . . . . . .
|
| | | $ | 18,303 | | | | | | 100.0 | | | | | $ | 15,646 | | | | | | 100.0 | | |
Cost of Goods Sold . . . . . . . .
|
| | | | 12,808 | | | | | | 70.0 | | | | | | 9,805 | | | | | | 62.7 | | |
Gross profit . . . . . . .
|
| | | | 5,495 | | | | | | 30.0 | | | | | | 5,841 | | | | | | 37.3 | | |
Operating expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Research and development . . . . . . .
|
| | | | 339 | | | | | | 1.9 | | | | | | 519 | | | | | | 3.3 | | |
General and administrative . . . . . .
|
| | | | 3,626 | | | | | | 19.8 | | | | | | 2,096 | | | | | | 13.4 | | |
Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 3,092 | | | | | | 16.9 | | | | | | 1,884 | | | | | | 12.0 | | |
Total Operating expenses . . . . . . . .
|
| | | | 7,057 | | | | | | 38.6 | | | | | | 4,499 | | | | | | 28.8 | | |
(Loss) Income From Operations
|
| | | | (1,562) | | | | | | (8.5) | | | | | | 1,342 | | | | | | 8.6 | | |
Other (Expense) Income
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Interest (Expense) Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | (1,263) | | | | | | (6.9) | | | | | | — | | | | | | — | | |
Total Other (Expense) Income
|
| | | | (1,263) | | | | | | (6.9) | | | | | | — | | | | | | — | | |
(Loss) Income Before Taxes
|
| | | | (2,825) | | | | | | (15.4) | | | | | | 1,342 | | | | | | 8.6 | | |
(Benefit) Provision for Income Tax
|
| | | | (527) | | | | | | (0.3) | | | | | | 276 | | | | | | 1.8 | | |
Net (Loss) Income
|
| | | $ | (2,298) | | | | | | (12.6) | | | | | $ | 1,066 | | | | | | 6.8 | | |
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Years ended December 31,
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2021
|
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% Net
Sales |
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2020
|
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% Net
Sales |
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(in thousands)
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Net Sales
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| | | $ | 78,000 | | | | | | 100.0 | | | | | $ | 47,187 | | | | | | 100.0 | | |
Cost of Goods Sold
|
| | | | 48,375 | | | | | | 62.0 | | | | | | 26,580 | | | | | | 56.3 | | |
Gross profit
|
| | | | 29,625 | | | | | | 38.0 | | | | | | 20,607 | | | | | | 43.7 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 2,689 | | | | | | 3.4 | | | | | | 1,239 | | | | | | 2.6 | | |
General and administrative
|
| | | | 10,621 | | | | | | 13.6 | | | | | | 5,960 | | | | | | 12.6 | | |
Sales and marketing
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| | | | 9,848 | | | | | | 12.6 | | | | | | 4,662 | | | | | | 9.9 | | |
Total Operating expenses
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| | | | 23,158 | | | | | | 29.7 | | | | | | 11,861 | | | | | | 25.1 | | |
Income From Operations
|
| | | | 6,467 | | | | | | 8.3 | | | | | | 8,746 | | | | | | 18.5 | | |
Other Income (Expense) | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Income
|
| | | | 1 | | | | | | 0.0 | | | | | | 15 | | | | | | 0.0 | | |
Interest Income (Expense)
|
| | | | (519) | | | | | | (0.7) | | | | | | 3 | | | | | | 0.0 | | |
Gain on disposition of assets
|
| | | | — | | | | | | | | | | | | — | | | | | | | | |
Total Other Income (Expense)
|
| | | | (518) | | | | | | (0.7) | | | | | | 18 | | | | | | 0.0 | | |
Income Before Taxes
|
| | | | 5,949 | | | | | | 7.6 | | | | | | 8,764 | | | | | | 18.6 | | |
Income Tax Expense
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| | | | 1,611 | | | | | | 2.1 | | | | | | 1,886 | | | | | | 4.0 | | |
Net Income
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| | | $ | 4,338 | | | | | | 5.6 | | | | | $ | 6,878 | | | | | | 14.6 | | |
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Three months ended March 31,
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| | |
2022
|
| |
2021
|
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| | |
(in thousands)
|
| |||||||||
Net income
|
| | | $ | (2,298) | | | | | $ | 1,066 | | |
Interest and Other Income
|
| | | | (1,263) | | | | | | — | | |
Taxes
|
| | | | (527) | | | | | | 276 | | |
Depreciation and Amortization
|
| | | | 192 | | | | | | 103 | | |
EBITDA
|
| | | | (3,896) | | | | | | 1,445 | | |
Adjusted for: | | | | | | | | | | | | | |
Stock-Based Compensation(1)
|
| | | | 288 | | | | | | 95 | | |
ERP Implementation(2)
|
| | | | 198 | | | | | | 41 | | |
Debt Transaction(3)
|
| | | | 808 | | | | | | — | | |
Business Combination Expenses(4)
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| | | | 745 | | | | | | — | | |
Adjusted EBITDA
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| | | $ | (1,857) | | | | | $ | 1,581 | | |
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Years ended December 31,
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| | |
2021
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2020
|
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| | |
(in thousands)
|
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Net income
|
| | | $ | 4,338 | | | | | $ | 6,878 | | |
Interest and Other Expense (Income)
|
| | | | 518 | | | | | | (18) | | |
Taxes
|
| | | | 1,611 | | | | | | 1,886 | | |
Depreciation and Amortization
|
| | | | 617 | | | | | | 198 | | |
EBITDA
|
| | | | 7,084 | | | | | | 8,944 | | |
Adjusted for: | | | | | | | | | | | | | |
Stock-Based Compensation(1)
|
| | | | 734 | | | | | | 351 | | |
ERP Implementation(2)
|
| | | | 233 | | | | | | 26 | | |
Debt Transaction(3)
|
| | | | 258 | | | | | | — | | |
Loss on Disposal of Assets(4)
|
| | | | 121 | | | | | | — | | |
Business Combination Expenses(4)
|
| | | | 295 | | | | | | 49 | | |
Adjusted EBITDA
|
| | | $ | 8,725 | | | | | $ | 9,370 | | |
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Three months ended March 31,
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| | |
2022
|
| |
2021
|
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| | |
(in thousands)
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Net cash provided by/(used in) operating activities
|
| | | $ | (11,110) | | | | | $ | 1,745 | | |
Net cash provided by/(used in) investing activities
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| | | $ | (4,524) | | | | | $ | (1,318) | | |
Net cash provided by/(used in) financing activities
|
| | | $ | 111 | | | | | $ | 10 | | |
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Years ended December 31,
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| | |
2021
|
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2020
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(in thousands)
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Net cash provided by/(used in) operating activities
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| | | $ | (13,573) | | | | | $ | 6,640 | | |
Net cash provided by/(used in) investing activities
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| | | | (2,909) | | | | | | (1,410) | | |
Net cash provided by/(used in) financing activities
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| | | | 38,906 | | | | | | 12 | | |
| Office furniture and equipment | | |
3 to 7 years
|
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| Machinery and equipment | | |
3 to 7 years
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| Leasehold improvements | | |
Remaining Term of Lease
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Chardan
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New Dragonfly
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Authorized Capital Stock
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Chardan is currently authorized to issue 51,000,000 shares of which 50,000,000 shares of common stock and 1,000,000 shares of preferred stock, each with $0.0001 par value. As of March 25, 2022 there were 15,812,500 shares of common stock outstanding.
Chardan’s certificate provides that, promptly after the consummation of the Business Combination, the shares sold pursuant to the Chardan IPO will be converted into cash at a per share price equal to the quotient determined by dividing (i) the amount then held inf the trust fund less any income taxes owed on such funds but not yet paid, calculated as of two business days prior to the consummation of the Business Combination or the filing of the amendment, as applicable, by (ii) the total number of the shares sold pursuant to the Chardan IPO then outstanding.
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The total number of shares of capital stock that New Dragonfly is authorized to issue is 175,000,000 shares, consisting of 170,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.
Immediately following consummation of the Business Combination, Dragonfly common stock will be cancelled in exchange for the right to receive, or the reservation of, an aggregate of 41,500,000 shares of New Dragonfly common stock, or, as applicable, shares underlying awards based on Dragonfly common stock, representing the Aggregate Merger Consideration.
New Dragonfly is expected to have approximately 56,567,623 shares of New Dragonfly common stock outstanding, assuming no redemptions and no exercise of dissenter’s rights.
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Chardan
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New Dragonfly
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Rights of Preferred Stock
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The board is expressly granted authority to issue shares of the preferred stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the board providing for the issue of such series and as may be permitted by the General Corporation Law of the State of Delaware.
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The New Dragonfly board is authorized to issue the shares of preferred stock in such series and to fix from time to time before issuance the number of shares to be included in any such series and the designation, powers, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof.
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Number and Qualification of Directors
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The board shall initially consist of one (1) member; provided, that such number may be increased or decreased from time to time by resolution of the stockholders.
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The board shall consist of one or more members, the exact number of which shall be fixed from time to time by resolution of the Board.
The directors of New Dragonfly shall be and are divided into three (3) classes, designated Class I, Class II and Class III.
Each class shall consist, as nearly as may be possible, of one-third (1/3) of the total number of directors constituting the entire board. The board may assign members of the board already in office upon the effectiveness of the filing of the certificate with the Secretary of State of the State of Delaware (the “Effective Time”) to such classes. Subject to the rights of holders of any series or class of preferred stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class A shall serve for a term expiring at New Dragonfly’s first annual meeting of stockholders held after the Effective Time; each director initially assigned to Class B shall serve for a term expiring at New Dragonfly’s second annual meeting of stockholders held after the Effective Time; and each director initially assigned to Class C shall serve for a term expiring at New Dragonfly’s third annual meeting of stockholders held after the Effective Time.
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Election of Directors
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The election of directors shall be decided by a plurality of the votes cast at a meeting of the stockholders by the holders of stock entitled to vote in the election. Directors shall be elected at the annual meeting of stockholders during the year in which their terms expire.
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Directors elected at meetings of stockholders will be elected by a plurality of the votes cast.
Subject to the rights, if any, of the holders of any series of preferred stock to elect additional directors under circumstances specified in a Preferred Stock, newly created directorships resulting from any increase in the number of directors and any vacancies
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Chardan
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New Dragonfly
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on the board resulting from death, resignation, disqualification, removal, or other cause will be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the board, or by a sole remaining director.
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Removal of Directors
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Each director shall hold office until a successor is duly elected and qualified or until the director’s earlier death, resignation, disqualification or removal.
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Except any preferred stock director, any director may be removed from office with cause at any time, by the affirmative vote of the holders of at least sixty-six and two-thirds percent (662∕3%) of the total voting power of all then outstanding shares of New Dragonfly entitled to vote for the election of directors.
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Voting
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Holders of the common stock shall exclusively possess all voting power and each share of common stock shall have one vote.
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Except as otherwise required by law, holders of common stock are entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders are generally entitled to vote; provided, that, except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the charter of New Dragonfly that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitled, either separately or together with the holders of one or more other such series of preferred stock, to vote thereon pursuant to the Second Amended and Restated Certificate of Incorporation or the DGCL.
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Cumulative Voting
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Chardan’s certificate does not authorize cumulative voting.
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Delaware law allows for cumulative voting only if provided for in the current charter of New Dragonfly; however, the current charter of New Dragonfly does not authorize cumulative voting.
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Vacancies on the Board of Directors
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Any vacancies occurring in the board may be filled by the affirmative votes of a majority of the remaining members of the Board of Directors, although less than a quorum, or by a sole remaining director. A director so elected shall be elected to hold office until the earlier of the expiration of the term of office of the director whom he or she has replaced, a successor is duly elected and qualified or the earlier of such director’s death, resignation or removal.
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Any newly created directorship on the New Dragonfly Board that results from an increase in the number of directors and any vacancies on the board are filled exclusively pursuant to a resolution adopted by a majority of the New Dragonfly Board then in office, even if less than a quorum, or by a sole remaining director.
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Chardan
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New Dragonfly
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Special Meeting of the Board of Directors
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Special meetings of stockholders for any purpose or purposes shall be called pursuant to a resolution approved by the board and may not be called by any other person or persons. The only business which may be conducted at a special meeting shall be the matter or matters set forth in the notice of such meeting.
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Special meetings of the New Dragonfly Board may be called by the Chairman of the New Dragonfly Board, the Chief Executive Officer, the President or any two directors then in office.
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Stockholder Action by Written Consent
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Any action to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action to be so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to Chardan by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.
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Subject to the rights of the holders of any series of preferred stock, any action required or permitted to be taken by the stockholders of New Dragonfly may be taken only at a duly called annual meeting or special meeting of stockholders of the company and may not be taken without a meeting by means of written consent.
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Amendment to Charter
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The holder of more than fifty percent (50%) of the issued and outstanding stock is authorized to make, repeal, alter, amend, restate and/or rescind any or all of the articles.
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Under Delaware law, an amendment to a charter generally requires the approval of the New Dragonfly Board and a majority of the combined voting power of the then-outstanding shares of voting stock, voting together as a single class. The affirmative vote of the holders of at least sixty-six and two-third percent (662∕3%) of the voting power of New Dragonfly’s outstanding shares of capital stock entitled to vote in the election of directors, shall be required to amend the Second Amended and Restated Certificate of Incorporation inconsistent with any provision inconsistent with Articles V, VI, VIII, VIII, IX or X of the Second Amended and Restated Certificate of Incorporation.
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Amendment of Bylaws
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The board is expressly authorized to make, repeal, alter, amend and rescind any or all of Chardan’s bylaws.
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The New Dragonfly Board will be expressly authorized to make, repeal, alter, amend and rescind any or all of the bylaws of New Dragonfly by an affirmative vote of the majority of the entire board of directors. The bylaws may also be amended, repealed or added to by the New Dragonfly stockholders representing at least sixty-six and two-thirds percent (662∕3%) of the voting power of all of the then-outstanding shares of capital stock of New Dragonfly entitled to vote generally in the election of directors, voting together as a single class.
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Chardan
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New Dragonfly
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Quorum
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Board of Directors. A majority of the board of directors shall be necessary and sufficient to constitute a quorum for the transaction of business at any meetings of the board.
Shareholders. A majority in voting power of the shares of Chardan entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum.
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Board of Directors. At all meetings of the New Dragonfly board, a majority of the directors then in office will constitute a quorum for the transaction of business.
Stockholders. The holders of a majority of the shares of New Dragonfly common stock issued and outstanding and entitled to vote, present in person (or by means of remote communication) or represented by proxy, constitute a quorum at all meetings of New Dragonfly stockholders for the transaction of business.
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Special Stockholder Meetings
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Special meetings of stockholders for any purpose or purposes shall be called pursuant to a resolution approved by the board and may not be called by any other person or persons. The only business which may be conducted at a special meeting shall be the matter or matters set forth in the notice of such meeting.
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Subject to the rights of the holders of any series of preferred stock, (a) any action required or permitted to be taken by the New Dragonfly stockholders may be taken only at a duly called annual or special meeting of New Dragonfly stockholders and may not be taken without a meeting by means of any consent in writing of such stockholders and (b) special meetings of New Dragonfly stockholders (i) may be called only by the Chairman or by the Chief Executive Officer, and (ii) by the Secretary acting at the request of the Chairman, the Chief Executive Officer or any three directors of New Dragonfly. At any annual meeting or special meeting of New Dragonfly stockholders, only such business will be conducted or considered as has been brought before such meeting in the manner provided in the bylaws.
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Notice of Stockholder Meetings
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Notice of any meeting of stockholders will be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting.
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Notice of any meeting of stockholders will be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting.
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Stockholder Proposals (Other than Nomination of Persons for Election as Directors)
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Special meetings of stockholders for any purpose or purposes shall be called pursuant to a resolution approved by the board and may not be called by any other person or persons.
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No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in New Dragonfly’s notice of meeting (or any supplement thereto) delivered pursuant to the bylaws, (ii) properly brought before the annual meeting by or at the direction of the board or (iii) otherwise properly brought before the annual meeting by any stockholder of New Dragonfly who is entitled to vote at the meeting, who complies with the notice procedures set forth in the bylaws and who is a stockholder of record at the time such notice is delivered to the Secretary.
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Chardan
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New Dragonfly
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A stockholder is not entitled to have its proposal for business or nominees included in New Dragonfly’s proxy statement and form of proxy solely as a result of such stockholder’s compliance with the provisions of the bylaws.
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Stockholder Nominations of Persons for Election as Directors
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No specific provision exists as to nominations by a stockholder.
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Nominations of persons for election to the New Dragonfly board may be made at an annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors only (i) pursuant to the New Dragonfly notice of meeting, (ii) by or at the direction of the board or any committee thereof or (iii) by any stockholder who was a holder of record at the time the notice provided for in the bylaws is delivered to the Secretary, who is entitled to vote at the meeting and who complies with the notice procedures set forth in the bylaws.
For a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of New Dragonfly not later than the close of business on the ninetieth (90th) day, nor earlier than the close of business on the one-hundred-twentieth (120th) day, prior to the first anniversary of the preceding year’s annual meeting of shareholders.
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Limitation of Liability of Directors and Officers
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To the full extent permitted under Delaware law, a director of Chardan will not be personally liable to Chardan or its stockholders for monetary damages for any breach of fiduciary duty.
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The DGCL permits limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches of the duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit.
The Second Amended and Restated Certificate of Incorporation will provide that, to the fullest extent provided by law, no director will be personally liable to New Dragonfly or its stockholders for monetary damages for breach of fiduciary duty as a director.
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Indemnification of Directors, Officers, Employees and Agents
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To the fullest extent permitted by law, Chardan is authorized to indemnify all persons whom it may indemnify pursuant thereto. Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director may be entitled to indemnification hereunder shall be paid by Chardan in advance of the
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The DGCL generally permits a corporation to indemnify its directors and officers acting in good faith. Under the DGCL, the corporation through its stockholders, directors or independent legal counsel, will determine that the conduct of the person seeking indemnity conformed with the statutory provisions governing indemnity.
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Chardan
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New Dragonfly
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final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by Chardan as authorized hereby.
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The charter of New Dragonfly will provide that New Dragonfly will indemnify each director and officer to the fullest extent permitted by applicable law.
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| | ||
|
Dividends, Distributions and Stock Repurchases
|
| ||||||
|
Dividends upon the shares of capital stock of Chardan may be declared by the board at any regular or special meeting of the board. Dividends may be paid in cash, in property or in shares of Chardan’s capital stock, unless otherwise provided by applicable law or the certificate of incorporation.
|
| |
Subject to the rights of the holders of any series of preferred stock, holders of shares of New Dragonfly common stock will be entitled to receive such dividends and distributions and other distributions in cash, stock or property of New Dragonfly when, as and if declared thereon by the New Dragonfly board from time to time out of assets or funds of New Dragonfly legally available therefor.
|
| | ||
|
Liquidation
|
| ||||||
|
In the event that Chardan does not consummate a Business Combination by 15 months from the initial public offering, 100% of the shares sold pursuant to the initial public offering will be redeemed for a redemption price per the articles of incorporation.
|
| |
Subject to the rights of the holders of any series of preferred stock, shares of New Dragonfly common stock will be entitled to receive the assets and funds of New Dragonfly available for distribution in the event of any liquidation, dissolution or winding up of the affairs of New Dragonfly, whether voluntary or involuntary. A liquidation, dissolution or winding up of the affairs of New Dragonfly will not be deemed to be occasioned by or to include any consolidation or merger of New Dragonfly with or into any other person or a sale, lease, exchange or conveyance of all or a part of its assets.
|
| | ||
|
Anti-Takeover Provisions and Other Stockholder Protections
|
| ||||||
|
No specific provision exists as to anti-takeover provisions and other stockholder protections.
|
| |
No specific provision exists as to anti-takeover provisions and other stockholder protections.
|
| | ||
|
Duties of Directors
|
| ||||||
|
Under statutory and decisional law, directors of Delaware corporations owe fiduciary duties to the corporation, including duty of care and duty of loyalty.
|
| |
Under statutory and decisional law, directors of Delaware corporations owe fiduciary duties to the corporation, including duty of care and duty of loyalty.
|
| | ||
|
Inspection of Books and Records; Stockholder Lists
|
| ||||||
|
Inspection. Any records maintained by Chardan in the regular course of its business, including its stock ledger, books of account and minute books, may be maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. Chardan shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.
Stockholder List. Stockholder list shall be open to the examination of any stockholder, for any purpose
|
| |
Under the DGCL, any stockholder or beneficial owner has the right, upon written demand under oath stating the proper purpose thereof, either in person or by attorney or other agent, to inspect and make copies and extracts from the corporation’s stock ledger, list of stockholders and its other books and records for a proper purpose during the usual hours for business. New Dragonfly shall at its principal executive office or other place designated by the board of directors, keep a record of its stockholders, the number and class of shares held, a copy of the
|
| |
|
Chardan
|
| |
New Dragonfly
|
| | ||
|
germane to the meeting, on a reasonably accessible electronic network
|
| |
bylaws as amended to date, accounting books and other records.
|
| | ||
|
Choice of Forum
|
| ||||||
|
Chardan’s certificate provides that, unless Chardan consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the forum for (a) any derivative action or proceeding brought in our name on behalf of the Corporation, (b) any action asserting a claim for breach of a fiduciary duty owed by any current or former director, officer, employee, agent or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the GCL, the Certificate of Incorporation, or the bylaws, or (d) any action asserting a claim governed by the internal affairs doctrine. Notwithstanding the foregoing, such provisions will not apply to suits brought to enforce any duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.
|
| |
The Second Amended and Restated Certificate of Incorporation generally designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for any stockholder (including a beneficial owner) to: (i) any derivative action or proceeding brought on behalf of New Dragonfly, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of New Dragonfly to New Dragonfly or New Dragonfly’s stockholders, (iii) any action asserting a claim against New Dragonfly, its directors, officers, or employees arising pursuant to any provision of the DGCL or the Second Amended and Restated Certificate of Incorporation or the Bylaws, (iv) any action asserting a claim against New Dragonfly, its directors, officers, or employees governed by the internal affairs doctrine, subject to certain exceptions. The exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
|
| |
| | |
Common
Stock(2) |
| |
Warrants(2)
|
| |
Units(1)
|
| |||||||||||||||||||||||||||
Period
|
| |
High
|
| |
Low
|
| |
High
|
| |
Low
|
| |
High
|
| |
Low
|
| ||||||||||||||||||
2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fourth Quarter
|
| | | $ | 10.02 | | | | | $ | 9.93 | | | | | $ | .8099 | | | | | $ | .44 | | | | | $ | 11.50 | | | | | $ | 10.21 | | |
Third Quarter
|
| | | $ | 10.10 | | | | | $ | 9.78 | | | | | $ | .5003 | | | | | $ | .40 | | | | | $ | 10.26 | | | | | $ | 10.02 | | |
2022 | | | | | | | | ||||||||||||||||||||||||||||||
First Quarter
|
| | | $ | 10.15 | | | | | $ | 9.93 | | | | | $ | .61 | | | | | $ | .19 | | | | | $ | 10.46 | | | | | $ | 10.04 | | |
| | |
Before the Business
Combination |
| |
After the Business Combination
|
| ||||||||||||||||||||||||||||||
| | |
Assuming No
Redemption |
| |
Assuming Maximum
Redemption |
| ||||||||||||||||||||||||||||||
Name and Address of Beneficial Owner
|
| |
Number of
shares of Chardan common stock |
| |
%
|
| |
Number of
shares of New Dragonfly Common Stock |
| |
%
|
| |
Number of
shares of New Dragonfly Common Stock |
| |
%
|
| ||||||||||||||||||
All Directors and Executive Officers of Chardan as a Group (Nine
Individuals)(1)(2) |
| | | | 3,162,500 | | | | | | 50.55% | | | | | | 3,662,500 | | | | | | 7.86% | | | | | | 3,662,500 | | | | | | 8.44% | | |
Keny Propper
|
| | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | — | | |
Jonas Grossman(1)(2)
|
| | | | 3,030,500 | | | | | | 48.44% | | | | | | 3,530,500 | | | | | | 7.57% | | | | | | 3,530,500 | | | | | | 8.13% | | |
Alex Weil
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
Jonathan Biele
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
Perry Boyle
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
Roderick Hardamon
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
Jory Des Jardins
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
Hitesh Thakrar
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
Todd Thomson
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
Five Percent Holders of Chardan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Chardan NexTech Investments 2 LLC(2)
|
| | | | 3,030,500 | | | | | | 48.44% | | | | | | 3,530,500 | | | | | | 7.57% | | | | | | 3,530,500 | | | | | | 8.13% | | |
HGC Investment Management Inc.(3)
|
| | | | 925,000 | | | | | | 14.79% | | | | | | 925,000 | | | | | | 1.98% | | | | | | 925,000 | | | | | | 2.13% | | |
MMCAP International Inc. SPC(4)
|
| | | | 900,000 | | | | | | 14.39% | | | | | | 900,000 | | | | | | 1.93% | | | | | | 900,000 | | | | | | 2.07% | | |
Polar Asset Management Partners Inc. (5)
|
| | | | 834,996 | | | | | | 13.35% | | | | | | 834,996 | | | | | | 1.79% | | | | | | 834,996 | | | | | | 1.92% | | |
Weiss Asset Management LP(6)
|
| | | | 900,000 | | | | | | 14.39% | | | | | | 900,000 | | | | | | 1.93% | | | | | | 900,000 | | | | | | 2.07% | | |
Directors and Executive Officers of New Dragonfly After Consummation of the Business Combination:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dr. Denis Phares(7)(8)
|
| | | | — | | | | | | — | | | | | | 15,973,791 | | | | | | 34.13% | | | | | | 15,973,791 | | | | | | 36.65% | | |
Sean Nichols(7)(9)
|
| | | | — | | | | | | — | | | | | | 3,679,655 | | | | | | 7.87% | | | | | | 3,679,655 | | | | | | 8.44% | | |
John Marchetti
|
| | | | — | | | | | | — | | | | | | 200,000 | | | | | | * | | | | | | 200,000 | | | | | | * | | |
Nicole Harvey
|
| | | | — | | | | | | — | | | | | | 31,952 | | | | | | * | | | | | | 31,952 | | | | | | * | | |
Luisa Ingargiola
|
| | | | — | | | | | | — | | | | | | 27,119 | | | | | | * | | | | | | 27,119 | | | | | | * | | |
Brian Nelson
|
| | | | — | | | | | | — | | | | | | 60,000 | | | | | | * | | | | | | 60,000 | | | | | | * | | |
Perry Boyle
|
| | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | | | | | 22,000 | | | | | | * | | |
All Directors and Executive Officers of New
Dragonfly as a Group ([Ten] Individuals) |
| | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | | | | | [ ] | | |
Five Percent Holders of New Dragonfly After Consummation of the Business Combination:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dynavolt Technology (HK) Ltd.
|
| | | | — | | | | | | — | | | | | | 11,834,300 | | | | | | 25.38% | | | | | | 11,834,300 | | | | | | 27.26% | | |
David Gong
|
| | | | — | | | | | | — | | | | | | 2,966,860 | | | | | | 6.28% | | | | | | 2,966,860 | | | | | | 6.74% | | |
| FINANCIAL STATEMENTS | | | | | | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-22 | | | |
| | | | | F-23 | | | |
| | | | | F-24 | | | |
| | | | | F-25 | | | |
| | | | | F-26 | | |
| FINANCIAL STATEMENTS | | | | | | | |
| | | | | F-42 | | | |
| | | | | F-43 | | | |
| | | | | F-44 | | | |
| | | | | F-45 | | | |
| | | | | F-46 | | | |
| | | | | F-47 | | |
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
| | |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 799,808 | | | | | $ | 25,000 | | |
Prepaid expenses
|
| | | | 302,590 | | | | | | — | | |
Total current assets
|
| | | | 1,102,398 | | | | | | 25,000 | | |
Investments held in Trust Account
|
| | | | 128,421,215 | | | | | | — | | |
Total Assets
|
| | | $ | 129,523,613 | | | | | $ | 25,000 | | |
LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
| | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 16,862 | | | | | $ | — | | |
Accrued expenses
|
| | | | 31,749 | | | | | | 1,000 | | |
Franchise tax payable
|
| | | | 65,600 | | | | | | — | | |
Total current liabilities
|
| | | | 114,211 | | | | | | 1,000 | | |
Warrant liabilities
|
| | | | 2,036,258 | | | | | | — | | |
Total Liabilities
|
| | | | 2,150,469 | | | | | | 1,000 | | |
Commitments and Contingencies | | | | | | | | | | | | | |
Common stock, $0.0001 par value; 12,650,000 and 0 shares at redemption value of $10.15 at December 31, 2021 and December 31, 2020,
respectively |
| | | | 128,397,500 | | | | | | — | | |
Stockholders’ Equity (Deficit) | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued
or outstanding at December 31, 2021 and December 31, 2020, respectively |
| | | | — | | | | | | — | | |
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,162,500
shares issued and outstanding (excluding 12,650,000 and 0 shares subject to possible redemption) at December 31, 2021 and December 31, 2020, respectively |
| | | | 317 | | | | | | 317 | | |
Additional paid-in capital
|
| | | | — | | | | | | 24,683 | | |
Accumulated deficit
|
| | | | (1,024,673) | | | | | | (1,000) | | |
Total Stockholders’ Equity (Deficit)
|
| | | | (1,024,356) | | | | | | 24,000 | | |
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ (Deficit) Equity
|
| | | $ | 129,523,613 | | | | | $ | 25,000 | | |
| | |
For the year ended
December 31, 2021 |
| |
For the period from
June 23, 2020 (inception) through December 31, 2020 |
| ||||||
Operating and formation costs
|
| | | $ | 292,074 | | | | | $ | 1,000 | | |
Franchise tax expense
|
| | | | 65,600 | | | | | | — | | |
Loss from operations
|
| | | | (357,674) | | | | | | (1,000) | | |
Warrant issuance costs
|
| | | | (18,797) | | | | | | — | | |
Loss on sale of private warrants
|
| | | | (1,253,928) | | | | | | — | | |
Net gain on investments held in Trust Account
|
| | | | 23,715 | | | | | | — | | |
Change in fair value of warrant liabilities
|
| | | | 3,517,171 | | | | | | — | | |
Net income (loss)
|
| | | $ | 1,910,487 | | | | | $ | (1,000) | | |
Basic weighted average shares outstanding
|
| | | | 7,732,021 | | | | | | 2,750,000 | | |
Basic net income (loss) per common share
|
| | | $ | 0.25 | | | | | $ | (0.00) | | |
Diluted weighted average shares outstanding
|
| | | | 7,991,952 | | | | | | 2,750,000 | | |
Diluted net income (loss) per common share
|
| | | $ | 0.24 | | | | | $ | (0.00) | | |
| | |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Equity (Deficit) |
| ||||||||||||||||||
|
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||
Balance at June 23, 2020 (inception)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Issuance of common stock to
Sponsor(1)(2) |
| | | | 3,162,500 | | | | | | 317 | | | | | | 24,683 | | | | | | — | | | | | | 25,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,000) | | | | | | (1,000) | | |
Balance at December 31, 2020
|
| | | | 3,162,500 | | | | | | 317 | | | | | | 24,683 | | | | | | (1,000) | | | | | | 24,000 | | |
Proceeds from Initial Public Offering Costs
allocated to Public Warrants (net of offering costs) |
| | | | — | | | | | | — | | | | | | 15,052,646 | | | | | | — | | | | | | 15,052,646 | | |
Accretion of common stock to redemption
amount |
| | | | — | | | | | | — | | | | | | (15,077,329) | | | | | | (2,934,160) | | | | | | (18,011,489) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,910,487 | | | | | | 1,910,487 | | |
Balance at December 31, 2021
|
| | | | 3,162,500 | | | | | $ | 317 | | | | | $ | — | | | | | $ | (1,024,673) | | | | | $ | (1,024,356) | | |
| | |
For the year ended
December 31, 2021 |
| |
For the Period from
June 23, 2020 (inception) Through December 31, 2020 |
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 1,910,487 | | | | | $ | (1,000) | | |
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
| | | | | | | | | | | | |
Warrant issuance costs
|
| | | | 18,797 | | | | | | — | | |
Net gain on investments held in Trust Account
|
| | | | (23,715) | | | | | | — | | |
Loss on sale of private warrants
|
| | | | 1,253,928 | | | | | | — | | |
Change in fair value of warrant liabilities
|
| | | | (3,517,171) | | | | | | — | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | | 16,863 | | | | | | | | |
Accrued expenses
|
| | | | 30,749 | | | | | $ | 1,000 | | |
Prepaid expenses
|
| | | | (302,590) | | | | | | — | | |
Franchise tax payable
|
| | | | 65,600 | | | | | | — | | |
Net cash used in operating activities
|
| | | | (547,052) | | | | | | — | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Cash deposited in Trust Account
|
| | | | (128,397,500) | | | | | | — | | |
Net cash used in investing activities
|
| | | | (128,397,500) | | | | | | — | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Proceeds from initial public offering, net of underwriter’s discount paid
|
| | | | 126,000,000 | | | | | | — | | |
Proceeds from promissory note – related party
|
| | | | 155,000 | | | | | | — | | |
Repayment of promissory note – related party
|
| | | | (155,000) | | | | | | — | | |
Proceeds from issuance of Founder Shares to Sponsor
|
| | | | — | | | | | | 25,000 | | |
Proceeds from sale of private warrants
|
| | | | 4,299,500 | | | | | | — | | |
Payment of offering costs
|
| | | | (580,140) | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 129,719,360 | | | | | | 25,000 | | |
Net Change in Cash
|
| | | | 774,808 | | | | | | 25,000 | | |
Cash – beginning of period
|
| | | | 25,000 | | | | | | — | | |
Cash – end of period
|
| | | $ | 799,808 | | | | | $ | 25,000 | | |
|
Gross proceeds
|
| | | $ | 126,500,000 | | |
| Less: | | | | | | | |
|
Proceeds allocated to Public Warrants
|
| | | | (15,180,000) | | |
|
Issuance costs allocated to common stock
|
| | | | (933,989) | | |
| Plus: | | | | | | | |
|
Accretion of carrying value to redemption value
|
| | | | 18,011,489 | | |
|
Common stock subject to possible redemption
|
| | | $ | 128,397,500 | | |
| | |
For the year ended
December 31, 2021 |
| |
For the period
from June 23, 2020 (inception) through December 31, 2020 |
| ||||||
Basic and diluted net income (loss) per share: | | | | | | | | | | | | | |
Numerator: | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 1,910,487 | | | | | $ | (1,000) | | |
Denominator: | | | | | | | | | | | | | |
Basic weighted average shares outstanding
|
| | | | 7,732,021 | | | | | | 2,750,000 | | |
Basic net income (loss) per common share
|
| | | $ | 0.25 | | | | | $ | (0.00) | | |
Diluted weighted average shares outstanding
|
| | | | 7,991,952 | | | | | | 2,750,000 | | |
Diluted net income (loss) per common share
|
| | | $ | 0.24 | | | | | $ | (0.00) | | |
| Deferred tax assets: | | | | | | | |
|
Start-up costs
|
| | | $ | 61,335 | | |
|
Net operating loss carryforwards
|
| | | | 298,437 | | |
|
Total deferred tax assets
|
| | | | 359,772 | | |
|
Valuation allowance
|
| | | | (354,792) | | |
| Deferred tax liabilities: | | | | | | | |
|
Unrealized gain on investments
|
| | | | (4,980) | | |
|
Total deferred tax liabilities
|
| | | | (4,980) | | |
|
Deferred tax assets, net of allowance
|
| | | $ | — | | |
| Federal | | | | | | | |
|
Current
|
| | | $ | — | | |
|
Deferred
|
| | | | (354,792) | | |
| State | | | | | | | |
|
Current
|
| | | | — | | |
|
Deferred
|
| | | | — | | |
|
Change in valuation allowance
|
| | | | 354,792 | | |
|
Income tax provision
|
| | | $ | — | | |
|
Statutory federal income tax rate
|
| | | | 21.0% | | |
|
State taxes, net of federal tax benefit
|
| | | | 0.0% | | |
|
Change in fair value of derivative warrant liabilities
|
| | | | (40.8)% | | |
|
Non-deductible transaction costs
|
| | | | 0.2% | | |
|
Change in valuation allowance
|
| | | | 19.6% | | |
|
Income tax provision
|
| | | | 0.0% | | |
Description
|
| |
Amount at
Fair Value |
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | |
Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Investments held in Trust Account:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Money Market investments
|
| | | $ | 128,421,215 | | | | | $ | 128,421,215 | | | | | $ | — | | | | | $ | — | | |
Liabilities
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liabilities – Private warrants
|
| | | $ | 2,036,258 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,036,258 | | |
| | |
Initial
Measurement |
| |
As of December 31,
2021 |
| ||||||
Stock price
|
| | | $ | 10.00 | | | | | $ | 9.97 | | |
Strike price
|
| | | $ | 11.50 | | | | | $ | 11.50 | | |
Dividend yield
|
| | | | —% | | | | | | —% | | |
Remaining term (in years)
|
| | | | 5.00 | | | | | | 4.61 | | |
Volatility
|
| | | | 19.0% | | | | | | 9.1% | | |
Risk-free rate
|
| | | | 0.81% | | | | | | 1.20% | | |
Fair value of warrants
|
| | | $ | 1.20 | | | | | $ | 0.44 | | |
| | |
Warrant
Liabilities |
| |||
Fair value as of June 23, 2020 (inception)
|
| | | | — | | |
Initial measurement
|
| | | | 5,553,429 | | |
Change in valuation inputs or other assumptions
|
| | | | (3,517,171) | | |
Fair value as of December 31, 2021
|
| | | | 2,036,258 | | |
| | |
March 31,
2022 |
| |
December 31,
2021 |
| ||||||
| | |
(Unaudited)
|
| | | | | | | |||
ASSETS | | | | | | | | | | | | | |
Cash
|
| | | $ | 647,178 | | | | | $ | 799,808 | | |
Prepaid expenses
|
| | | | 296,082 | | | | | | 302,590 | | |
Total Current Assets
|
| | | | 943,260 | | | | | | 1,102,398 | | |
Investments held in Trust Account
|
| | | | 128,437,281 | | | | |
|
128,421,215
|
| |
Total Assets
|
| | | $ | 129,380,541 | | | | | $ | 129,523,613 | | |
LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
| | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 42,351 | | | | | $ | 16,862 | | |
Accrued expenses
|
| | | | 121,584 | | | | | | 31,749 | | |
Franchise tax payable
|
| | | | 50,000 | | | | | | 65,600 | | |
Total Current Liabilities
|
| | | | 213,935 | | | | | | 114,211 | | |
Warrant liabilities
|
| | | | 601,622 | | | | | | 2,036,258 | | |
Total Liabilities
|
| | | | 815,557 | | | | | | 2,150,469 | | |
Commitments and Contingencies | | | | | | | | | | | | | |
Common stock, $0.0001 par value; 12,650,000 shares at redemption value of $10.15 at March 31, 2022 and December 31, 2021
|
| | | | 128,397,500 | | | | | | 128,397,500 | | |
Stockholders’ Equity (Deficit) | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding at March 31, 2022 and December 31, 2021
|
| | | | — | | | | | | — | | |
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,162,500 shares issued and outstanding (excluding 12,650,000 shares subject to possible redemption) at March 31, 2022 and December 31, 2021
|
| | | | 317 | | | | | | 317 | | |
Additional paid-in capital
|
| | | | — | | | | | | — | | |
Retained earnings (accumulated deficit)
|
| | | | 167,167 | | | | | | (1,024,673) | | |
Total Stockholders’ Equity (Deficit)
|
| | | | 167,484 | | | | | | (1,024,356) | | |
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit)
|
| | | $ | 129,380,541 | | | | | $ | 129,523,613 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Operating costs
|
| | | $ | 208,206 | | | | | $ | — | | |
Franchise tax expense
|
| | | | 50,656 | | | | | | — | | |
Loss from operations
|
| | | | (258,862) | | | | | $ | — | | |
Net gain on investments held in Trust Account
|
| | | | 16,066 | | | | | | — | | |
Change in fair value of warrant liabilities
|
| | | | 1,434,636 | | | | | | — | | |
Net income
|
| | | $ | 1,191,840 | | | | | $ | — | | |
Basic weighted average shares outstanding
|
| | | | 15,812,500 | | | | | | 2,750,000 | | |
Basic net income per common share
|
| | | $ | 0.08 | | | | | $ | 0.00 | | |
Diluted weighted average shares outstanding
|
| | | | 15,812,500 | | | | | | 2,750,000 | | |
Diluted net income per common share
|
| | | $ | 0.08 | | | | | $ | 0.00 | | |
| | |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Retained
Earnings (Accumulated Deficit) |
| |
Total
Stockholder’s Equity (Deficit) |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance at December 31, 2021
|
| | | | 3,162,500 | | | | | $ | 317 | | | | | $ | — | | | | | $ | (1,024,673) | | | | | $ | (1,024,356) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,191,840 | | | | | | 1,191,840 | | |
Balance at March 31, 2022 (unaudited)
|
| | | | 3,162,500 | | | | | $ | 317 | | | | | $ | — | | | | | $ | 167,167 | | | | | $ | 167,484 | | |
| | |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Equity (Deficit) |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance at December 31, 2020
|
| | | | 3,162,500 | | | | | $ | 317 | | | | | $ | 24,683 | | | | | $ | (1,000) | | | | | $ | 24,000 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balance at March 31, 2021 (unaudited)
|
| | | $ | 3,162,500 | | | | | $ | 317 | | | | | $ | 24,683 | | | | | $ | (1,000) | | | | | $ | 24,000 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net income
|
| | | $ | 1,191,840 | | | | | $ | — | | |
Adjustments to reconcile net income to net cash used in operations: | | | | | | | | | | | | | |
Net gain on investments held in Trust Account
|
| | | | (16,066) | | | | | | — | | |
Change in fair value of warrant liability
|
| | | | (1,434,636) | | | | | | — | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | | 25,489 | | | | | | | | |
Accrued expenses
|
| | | | 89,835 | | | | | | — | | |
Prepaid expenses
|
| | | | 6,508 | | | | | | — | | |
Deferred offering costs
|
| | | | — | | | | | | (77,118) | | |
Franchise tax payable
|
| | | | (15,600) | | | | | | — | | |
Net cash used in operating activities
|
| | | | (152,630) | | | | | | (77,118) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Proceeds from promissory note
|
| | | | — | | | | | | 125,000 | | |
Net cash provided by financing activities
|
| | | $ | — | | | | | $ | 125,000 | | |
Net Change in Cash
|
| | | | (152,630) | | | | | | 47,882 | | |
Cash – Beginning of Period
|
| | | | 799,808 | | | | | | 25,000 | | |
Cash – End of Period
|
| | | $ | 647,178 | | | | | $ | 72,882 | | |
|
Gross proceeds
|
| | | $ | 126,500,000 | | |
| Less: | | | | | | | |
|
Proceeds allocated to Public Warrants
|
| | | | (15,180,000) | | |
|
Issuance costs allocated to common stock
|
| | | | (933,989) | | |
| Plus: | | | | | | | |
|
Accretion of carrying value to redemption value
|
| | | | 18,011,489 | | |
|
Common stock subject to possible redemption
|
| | | $ | 128,397,500 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Basic and diluted net income per share: | | | | | | | | | | | | | |
Numerator:
|
| | | | | | | | | | | | |
Net income
|
| | | $ | 1,191,840 | | | | | $ | — | | |
Denominator:
|
| | | | | | | | | | | | |
Basic weighted average shares outstanding
|
| | | | 15,812,500 | | | | | | 2,750,000 | | |
Basic net income per common share
|
| | | $ | 0.08 | | | | | $ | 0.00 | | |
Diluted weighted average shares outstanding
|
| | | | 15,812,500 | | | | | | 2,750,000 | | |
Diluted net income per common share
|
| | | $ | 0.08 | | | | | $ | 0.00 | | |
Description
|
| |
Amount at
Fair Value |
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||
March 31, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | |
Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Investments held in Trust Account:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Money Market investments
|
| | | $ | 128,437,281 | | | | | $ | 128,437,281 | | | | | $ | — | | | | | $ | — | | |
Liabilities
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liabilities – Private Warrants
|
| | | $ | 601,622 | | | | | $ | — | | | | | $ | — | | | | | $ | 601,622 | | |
Description
|
| |
Amount at
Fair Value |
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | |
Assets
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Investments held in Trust Account:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Money Market investments
|
| | | $ | 128,421,215 | | | | | $ | 128,421,215 | | | | | $ | — | | | | | $ | — | | |
Liabilities
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liability – Private warrants
|
| | | $ | 2,036,258 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,036,258 | | |
| | |
As of
December 31, 2021 |
| |
As of
March 31, 2022 |
| ||||||
Common stock price
|
| | | $ | 9.97 | | | | | $ | 10.07 | | |
Exercise price
|
| | | $ | 11.50 | | | | | $ | 11.50 | | |
Dividend yield
|
| | | | —% | | | | | | —% | | |
Term to Business Combination (years)
|
| | | | 4.61 | | | | | | 4.36 | | |
Volatility
|
| | | | 9.1% | | | | | | 2.9% | | |
Risk-free rate
|
| | | | 1.20% | | | | | | 2.43% | | |
Fair value
|
| | | $ | 0.44 | | | | | $ | 0.13 | | |
|
Fair value as of June 23, 2020 (inception)
|
| | | | — | | |
|
Initial measurement
|
| | | | 5,553,429 | | |
|
Change in valuation inputs or other assumptions
|
| | | | (3,517,171) | | |
|
Fair value at December 31, 2021
|
| | | $ | 2,036,258 | | |
|
Change in valuation inputs or other assumptions
|
| | | | 1,434,636 | | |
|
Fair value at March 31, 2022
|
| | | $ | 601,622 | | |
| | |
2021
|
| |
2020
|
| ||||||
Current Assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 25,586 | | | | | $ | 6,206 | | |
Restricted cash
|
| | | | 3,044 | | | | | | — | | |
Accounts receivable, net of allowance for doubtful accounts
|
| | | | 783 | | | | | | 1,840 | | |
Inventory
|
| | | | 27,127 | | | | | | 5,948 | | |
Prepaid expenses
|
| | | | 293 | | | | | | 351 | | |
Prepaid inventory
|
| | | | 7,461 | | | | | | 1,108 | | |
Other current assets
|
| | | | 1,787 | | | | | | 324 | | |
Total Current Assets
|
| | | | 66,081 | | | | | | 15,777 | | |
Property and Equipment | | | | | | | | | | | | | |
Machinery and equipment
|
| | | | 3,615 | | | | | | 1,535 | | |
Office furniture and equipment
|
| | | | 201 | | | | | | 157 | | |
Leasehold improvements
|
| | | | 1,307 | | | | | | 635 | | |
Vehicle
|
| | | | 195 | | | | | | 33 | | |
| | | | | 5,318 | | | | | | 2,360 | | |
Less accumulated depreciation and amortization
|
| | | | (857) | | | | | | (323) | | |
Property and Equipment, Net
|
| | | | 4,461 | | | | | | 2,037 | | |
Operating lease right of use asset
|
| | | | 5,709 | | | | | | 993 | | |
Total Assets
|
| | | $ | 76,251 | | | | | $ | 18,807 | | |
Current Liabilities | | | | ||||||||||
Accounts payable
|
| | | | 11,360 | | | | | | 3,091 | | |
Accrued payroll and other liabilities
|
| | | | 2,608 | | | | | | 767 | | |
Customer deposits
|
| | | | 434 | | | | | | 1,779 | | |
Uncertain tax position liability
|
| | | | — | | | | | | 19 | | |
Income tax payable
|
| | | | 631 | | | | | | 1,282 | | |
Notes payable, current portion
|
| | | | 1,875 | | | | | | — | | |
Operating lease liability, current portion
|
| | | | 1,082 | | | | | | 225 | | |
Total Current Liabilities
|
| | | | 17,990 | | | | | | 7,163 | | |
Long-Term Liabilities | | | | | | | | | | | | | |
Notes payable-noncurrent, net of debt issuance costs
|
| | | | 37,053 | | | | | | — | | |
Deferred tax liabilities
|
| | | | 453 | | | | | | 331 | | |
Operating lease liability, net of current portion
|
| | | | 4,694 | | | | | | 758 | | |
Total Long-Term Liabilities
|
| | | | 42,200 | | | | | | 1,089 | | |
Total Liabilities
|
| | | | 60,190 | | | | | | 8,252 | | |
Commitments and Contingencies (See Note 2) | | | | | | | | | | | | | |
Redeemable Preferred Stock | | | | | | | | | | | | | |
Preferred stock, 10,000,000 shares at $0.0002 par value, authorized, 10,000,000 shares issued and outstanding
|
| | | | 2,000 | | | | | | 2,000 | | |
Equity | | | | | | | | | | | | | |
Common stock, 40,000,000 shares at $0.0002 par value, authorized, 20,875,475
shares issued and outstanding as of December 31, 2021, 20,040,470 shares issued and outstanding as of December 31, 2020 |
| | | | 4 | | | | | | 4 | | |
Additional paid in capital
|
| | | | 1,619 | | | | | | 451 | | |
Retained earnings
|
| | | | 12,438 | | | | | | 8,100 | | |
Total Equity
|
| | | | 14,061 | | | | | | 8,555 | | |
Total Liabilities, Redeemable Preferred Stock and Shareholders’ Equity
|
| | | $ | 76,251 | | | | | $ | 18,807 | | |
| | |
2021
|
| |
2020
|
| ||||||
Net Sales
|
| | | $ | 78,000 | | | | | $ | 47,187 | | |
Cost of Goods Sold
|
| | | | 48,375 | | | | | | 26,580 | | |
Gross Profit
|
| | | | 29,625 | | | | | | 20,607 | | |
Operating Expenses | | | | | | | | | | | | | |
Research and development
|
| | | | 2,689 | | | | | | 1,239 | | |
General and administrative
|
| | | | 10,621 | | | | | | 4,662 | | |
Selling and marketing
|
| | | | 9,848 | | | | | | 5,960 | | |
Total Operating Expenses
|
| | | | 23,158 | | | | | | 11,861 | | |
Income From Operations
|
| | | | 6,467 | | | | | | 8,746 | | |
Other Income (Expense) | | | | | | | | | | | | | |
Other Income
|
| | | | 1 | | | | | | 15 | | |
Interest Income (expense)
|
| | | | (519) | | | | | | 3 | | |
Total Other Income (Expense)
|
| | | | (518) | | | | | | 18 | | |
Income Before Taxes
|
| | | | 5,949 | | | | | | 8,764 | | |
Income Tax Expense
|
| | | | 1,611 | | | | | | 1,886 | | |
Net Income
|
| | | $ | 4,338 | | | | | $ | 6,878 | | |
Earnings Per Share – Basic
|
| | | $ | 0.15 | | | | | $ | 0.23 | | |
Earnings Per Share – Diluted
|
| | | $ | 0.13 | | | | | $ | 0.21 | | |
Weighted Average Number of Shares – Basic
|
| | | | 20,101,129 | | | | | | 20,040,470 | | |
Weighted Average Number of Shares – Diluted
|
| | | | 21,931,108 | | | | | | 21,388,785 | | |
| | |
Redeemable Preferred Stock
|
| | |
Common Stock
|
| | | | | | | | | | | | | | | | | | | ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| | |
Shares
|
| |
Amount
|
| |
Additional
Paid-In Capital |
| |
Retained
Earnings |
| |
Total
|
| |||||||||||||||||||||
Balance – December 31, 2019
|
| | | | 10,000,000 | | | | | $ | 2,000 | | | | | | | 20,000,000 | | | | | $ | 4 | | | | | $ | 88 | | | | | $ | 1,222 | | | | | $ | 1,314 | | |
Net income
|
| | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,878 | | | | | | 6,878 | | |
Stock compensation expense
|
| | | | — | | | | | | — | | | | | | | 8,200 | | | | | | — | | | | | | 351 | | | | | | — | | | | | | 351 | | |
Exercise of stock options
|
| | | | — | | | | | | — | | | | | | | 32,270 | | | | | | — | | | | | | 12 | | | | | | — | | | | | | 12 | | |
Balance – December 31, 2020
|
| | | | 10,000,000 | | | | | $ | 2,000 | | | | | | | 20,040,470 | | | | | | 4 | | | | | | 451 | | | | | | 8,100 | | | | | | 8,555 | | |
Net income
|
| | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,338 | | | | | | 4,338 | | |
Stock compensation expense
|
| | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 734 | | | | | | — | | | | | | 734 | | |
Exercise of stock options
|
| | | | — | | | | | | — | | | | | | | 835,005 | | | | | | — | | | | | | 434 | | | | | | — | | | | | | 434 | | |
Balance – December 31, 2021
|
| | | | 10,000,000 | | | | | $ | 2,000 | | | | | | | 20,875,475 | | | | | $ | 4 | | | | | $ | 1,619 | | | | | $ | 12,438 | | | | | $ | 14,061 | | |
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from Operating Activities | | | | | | | | | | | | | |
Net Income
|
| | | $ | 4,338 | | | | | $ | 6,878 | | |
Adjustments to Reconcile Net Income to Net Cash | | | | | | | | | | | | | |
(Used in) Provided by Operating Activities
|
| | | | | | | | | | | | |
Stock based compensation
|
| | | | 734 | | | | | | 351 | | |
Amortization of debt discount
|
| | | | 206 | | | | | | — | | |
Deferred tax liability
|
| | | | 122 | | | | | | 210 | | |
Depreciation and amortization
|
| | | | 617 | | | | | | 198 | | |
Provision for doubtful accounts
|
| | | | 50 | | | | | | — | | |
Loss on disposal of property and equipment
|
| | | | 124 | | | | | | — | | |
Changes in Assets and Liabilities | | | | | | | | | | | | | |
Accounts receivable
|
| | | | 1,007 | | | | | | (1,640) | | |
Inventories
|
| | | | (21,179) | | | | | | (3,406) | | |
Prepaid expenses
|
| | | | 58 | | | | | | (309) | | |
Prepaid inventory
|
| | | | (6,353) | | | | | | (630) | | |
Other current assets
|
| | | | (1,214) | | | | | | (253) | | |
Other assets
|
| | | | 1,029 | | | | | | 144 | | |
Income taxes payable
|
| | | | (651) | | | | | | 1,279 | | |
Accounts payable and other liabilities
|
| | | | 8,903 | | | | | | 2,159 | | |
Uncertain tax position liability
|
| | | | (19) | | | | | | 19 | | |
Customer deposits
|
| | | | (1,345) | | | | | | 1,640 | | |
Total Adjustments
|
| | | | (19,764) | | | | | | (997) | | |
Net Cash (Used in) Provided by Operating Activities
|
| | | | (13,573) | | | | | | 6,640 | | |
Cash Flows From Investing Activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (2,970) | | | | | | (1,410) | | |
Proceeds from disposal of property and equipment
|
| | | | 61 | | | | | | — | | |
Net Cash Used in Investing Activities
|
| | | | (2,909) | | | | | | (1,410) | | |
Cash Flows From Financing Activities | | | | | | | | | | | | | |
Proceeds from note payable
|
| | | | 45,000 | | | | | | — | | |
Payments of debt issuance costs
|
| | | | (6,278) | | | | | | — | | |
Proceeds from exercise of options
|
| | | | 184 | | | | | | 12 | | |
Proceeds from revolving note agreement
|
| | | | 5,000 | | | | | | — | | |
Repayments of revolving note agreement
|
| | | | (5,000) | | | | | | — | | |
Net Cash Provided by Financing Activities
|
| | | | 38,906 | | | | | | 12 | | |
Net Increase in Cash and Restricted Cash
|
| | | | 22,424 | | | | | | 5,242 | | |
Beginning cash and restricted cash
|
| | | | 6,206 | | | | | | 964 | | |
Ending cash and restricted cash
|
| | | $ | 28,630 | | | | | $ | 6,206 | | |
Supplemental Disclosures of Cash Flow Information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | 2,390 | | | | | $ | 292 | | |
Cash paid for interest
|
| | | $ | 313 | | | | | $ | — | | |
Supplemental Non-Cash Items | | | | | | | | | | | | | |
Receivable of options exercised
|
| | | $ | 250 | | | | | $ | — | | |
Purchases of property and equipment, not yet paid
|
| | | $ | 255 | | | | | $ | — | | |
Recognition of right of use asset obtained in exchange for operating lease liability
|
| | | $ | 5,745 | | | | | $ | 661 | | |
| Office furniture and equipment | | | 3 to 7 years | |
| Machinery and equipment | | |
3 to 7 years Leasehold improvements
Remaining Term of Lease |
|
Sales
|
| |
2021
|
| |
2020
|
| ||||||
Retail
|
| | | $ | 59,042 | | | | | $ | 33,314 | | |
Distributor
|
| | | | 10,733 | | | | | | 10,381 | | |
Original equipment manufacture
|
| | | | 8,225 | | | | | | 3,492 | | |
Total
|
| | | $ | 78,000 | | | | | $ | 47,187 | | |
| | |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Basic Earnings per common share | | | | ||||||||||
Net Income
|
| | | $ | 4,338 | | | | | $ | 6,878 | | |
Income available for distribution
|
| | | | 4,338 | | | | | | 6,878 | | |
Income allocated to participating securities, Net
|
| | | | (1,405) | | | | | | (2,290) | | |
Income available to common shareholders
|
| | | $ | 2,933 | | | | | $ | 4,588 | | |
| | |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Basic earnings per common share: | | | | ||||||||||
Net Income available to common shareholders
|
| | | $ | 2,933 | | | | | $ | 4,588 | | |
Weighted average number of common shares-basic
|
| | | | 20,101,129 | | | | | | 20,040,470 | | |
Earnings per share, basic
|
| | | $ | 0.15 | | | | | $ | 0.23 | | |
Diluted earnings per common share: | | | | | | | | | | | | | |
Net Income available to common shareholders
|
| | | $ | 2,933 | | | | | $ | 4,588 | | |
Weighted average number of common shares-basic
|
| | | | 20,101,129 | | | | | | 20,040,470 | | |
Dilutive effect related to stock options
|
| | | | 1,829,979 | | | | | | 1,348,315 | | |
Weighted average diluted shares outstanding
|
| | | | 21,931,108 | | | | | | 21,388,785 | | |
Earnings per share, diluted
|
| | | $ | 0.13 | | | | | $ | 0.21 | | |
| | |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Raw material
|
| | | $ | 22,885 | | | | | $ | 4,419 | | |
Work in process
|
| | | | — | | | | | | 172 | | |
Finished goods
|
| | | | 4,242 | | | | | | 1,357 | | |
Total inventory
|
| | | $ | 27,127 | | | | | $ | 5,948 | | |
| | |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Operating lease right-of-use assets
|
| | | $ | 5,709 | | | | | $ | 993 | | |
Short-term operating lease liabilities
|
| | | | 1,082 | | | | | | 225 | | |
Long-term operating lease liabilities
|
| | | | 4,694 | | | | | | 758 | | |
Total operating lease liabilities
|
| | | $ | 5,776 | | | | | $ | 983 | | |
Weighted average remaining lease term
|
| | 4.6 years | | | 3.9 years | | ||||||
Weighted average discount rate
|
| | | | 5.2% | | | | | | 6.0% | | |
|
2022
|
| | | $ | 1,357 | | |
|
2023
|
| | | | 1,399 | | |
|
2024
|
| | | | 1,435 | | |
|
2025
|
| | | | 1,440 | | |
|
2026
|
| | | | 893 | | |
|
Total lease payments
|
| | | | 6,524 | | |
|
Less imputed interest
|
| | | | 748 | | |
|
Total operating lease liabilities
|
| | | | 5,776 | | |
Lease cost
|
| |
Classification
|
| |
December 31,
2021 |
| |
December 31,
2020 |
| ||||||
Operating lease cost
|
| | Cost of goods sold | | | | $ | 633 | | | | | $ | 179 | | |
Operating lease cost
|
| |
Research and development
|
| | | | 103 | | | | | | — | | |
Operating lease cost
|
| |
General and administration
|
| | | | 42 | | | | | | 144 | | |
Operating lease cost
|
| | Selling and marketing | | | | | 42 | | | | | | — | | |
Total lease cost
|
| | | | | | $ | 820 | | | | | $ | 323 | | |
|
Payment Reserve Fund
|
| | | $ | 3,044 | | |
|
Capitalized Interest Fund
|
| | | | 144 | | |
|
Total
|
| | | $ | 3,188 | | |
|
2022
|
| | | $ | 1,875 | | |
|
2023
|
| | | | 22,500 | | |
|
2024
|
| | | | 20,625 | | |
|
Total
|
| | | | 45,000 | | |
|
Less: Unamortized debt issuance costs
|
| | | | (6,072) | | |
|
Total debt
|
| | | | 38,928 | | |
|
Less: current portion of debt
|
| | | | (1,875) | | |
|
Total long-term debt
|
| | | $ | 37,053 | | |
| | |
2021
|
| |
2020
|
| ||||||
Current
|
| | | $ | 1,489 | | | | | $ | 1,676 | | |
Deferred
|
| | | | 122 | | | | | | 210 | | |
Total tax expense
|
| | | $ | 1,611 | | | | | $ | 1,886 | | |
| | |
2021
|
| |
2020
|
| ||||||
Leases
|
| | | $ | 14 | | | | | $ | (15) | | |
Stock based compensation
|
| | | | 35 | | | | | | 19 | | |
Allowance for bad debt
|
| | | | 59 | | | | | | — | | |
Fixed assets and intangibles
|
| | | | (606) | | | | | | (345) | | |
Inventory (Sec. 263A)
|
| | | | 45 | | | | | | 10 | | |
Net deferred tax liability
|
| | | $ | (453) | | | | | $ | (331) | | |
| | |
Tax
|
| |
Percentage
|
| ||||||
Federal income tax provision at statutory rates
|
| | | $ | 1,249 | | | | | | 21.00% | | |
Permanent differences (other than tax)
|
| | | | 188 | | | | | | 3.16% | | |
State taxes, net
|
| | | | 128 | | | | | | 2.15% | | |
Deferred true-up
|
| | | | 56 | | | | | | 0.94% | | |
Research and development credits
|
| | | | — | | | | | | —% | | |
Uncertain tax positions
|
| | | | (19) | | | | | | (0.32)% | | |
Other
|
| | | | 9 | | | | | | 0.15% | | |
Total
|
| | | $ | 1,611 | | | | | | | | |
Effective tax rate
|
| | | | | | | | | | 27.08% | | |
| | |
Tax
|
| |
Percentage
|
| ||||||
Federal income tax provision at statutory rates
|
| | | $ | 1,840 | | | | | | 21.00% | | |
Permanent differences (other than tax)
|
| | | | 87 | | | | | | 0.99% | | |
State taxes, net
|
| | | | 9 | | | | | | 0.10% | | |
Deferred true-up
|
| | | | (2) | | | | | | (0.02)% | | |
Research and development credits
|
| | | | (75) | | | | | | (0.86)% | | |
Uncertain tax positions
|
| | | | 19 | | | | | | 0.22% | | |
Other
|
| | | | 8 | | | | | | 0.11% | | |
Total
|
| | | $ | 1,886 | | | | | | | | |
Effective tax rate
|
| | | | | | | | | | 21.52% | | |
| | |
Number of
Options |
| |
Weighted-
Average Exercise Price |
| |
Weighted-
Average Grant Date Fair Value |
| |
Weighted
Average Remaining Contractual Life (in years) |
| |
Aggregate
intrinsic value |
| |||||||||||||||
Balances, January 1, 2020
|
| | | | 2,157,950 | | | | | $ | 0.39 | | | | | | 0.39 | | | | | | 8.54 | | | | | | 650,965 | | |
Options granted
|
| | | | 620,950 | | | | | | 0.69 | | | | | | 1.92 | | | | | | | | | | | | — | | |
Options forfeited
|
| | | | (183,550) | | | | | | 0.52 | | | | | | 0.93 | | | | | | | | | | | | — | | |
Options exercised
|
| | | | (32,270) | | | | | | 0.46 | | | | | | 0.64 | | | | | | | | | | | | — | | |
Balances, December 31, 2020
|
| | | | 2,563,080 | | | | | $ | 0.45 | | | | | | 0.72 | | | | | | 7.92 | | | | | | 650,965 | | |
Options granted
|
| | | | 1,750,551 | | | | | | 3.41 | | | | | | 2.03 | | | | | | | | | | | | 3,550,651 | | |
Options forfeited
|
| | | | (356,228) | | | | | | 1.44 | | | | | | 1.82 | | | | | | | | | | | | — | | |
Options exercised
|
| | | | (835,005) | | | | | | 0.51 | | | | | | 0.53 | | | | | | | | | | | | 441,835 | | |
Balances, December 31, 2021
|
| | | | 3,122,398 | | | | | $ | 1.98 | | | | | | 1.38 | | | | | | 8.52 | | | | | | 6,549,591 | | |
At December 31, 2021 | | | | | | | |||||||||||||||||||||||||
Vested and Exercisable
|
| | | | 550,601 | | | | | $ | 0.88 | | | | | | | | | | | | 7.42 | | | | | | 1,761,634 | | |
Vested and expected to vest
|
| | | | 3,122,398 | | | | | $ | 1.98 | | | | | | | | | | | | 7.92 | | | | | | 6,549,591 | | |
| | |
2021
|
| |
2020
|
| ||||||
Weighted average fair value of options granted
|
| | | $ | 1.73 – 2.18 | | | | | $ | 1.30 – 2.39 | | |
Risk-free interest rate
|
| | | | 1.08% | | | | | | 0.46% | | |
Volatility
|
| | | | 52.6% | | | | | | 52.5% | | |
Expected life (years)
|
| | | | 6.02 | | | | | | 5.95 | | |
Dividend yield
|
| | | | 0.00% | | | | | | 0.00% | | |
| | |
2021
|
| |
2020
|
| ||||||
Convertible preferred stock outstanding
|
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Options issued and outstanding
|
| | | | 3,122,398 | | | | | | 2,563,080 | | |
Common stock outstanding
|
| | | | 20,875,475 | | | | | | 20,040,470 | | |
Shares available for future issuance
|
| | | | 10,327 | | | | | | 404,650 | | |
Total
|
| | | | 34,008,200 | | | | | | 33,008,200 | | |
| | |
March 31,
2022 |
| |
December 31,
2021 |
| ||||||
Current Assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 10,063 | | | | | $ | 25,586 | | |
Restricted cash
|
| | | | 3,044 | | | | | | 3,044 | | |
Accounts receivable, net of allowance for doubtful accounts
|
| | | | 2,000 | | | | | | 783 | | |
Inventory
|
| | | | 33,073 | | | | | | 27,127 | | |
Prepaid expenses
|
| | | | 795 | | | | | | 293 | | |
Prepaid inventory
|
| | | | 5,036 | | | | | | 7,461 | | |
Other current assets
|
| | | | 2,427 | | | | | | 1,787 | | |
Total Current Assets
|
| | | | 56,438 | | | | | | 66,081 | | |
Property and Equipment | | | | | | | | | | | | | |
Machinery and equipment
|
| | | | 7,879 | | | | | | 3,615 | | |
Office furniture and equipment
|
| | | | 207 | | | | | | 201 | | |
Leasehold improvements
|
| | | | 1,361 | | | | | | 1,307 | | |
Vehicles
|
| | | | 234 | | | | | | 195 | | |
| | | | | 9,681 | | | | | | 5,318 | | |
Less accumulated depreciation and amortization
|
| | | | (950) | | | | | | (857) | | |
Property and Equipment, Net
|
| | | | 8,731 | | | | | | 4,461 | | |
Deferred tax asset
|
| | | | 76 | | | | | | — | | |
Operating lease right of use asset
|
| | | | 5,435 | | | | | | 5,709 | | |
Total Assets
|
| | | $ | 70,680 | | | | | $ | 76,251 | | |
Current Liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | | 7,240 | | | | | | 11,360 | | |
Accrued payroll and other liabilities
|
| | | | 2,873 | | | | | | 2,608 | | |
Customer deposits
|
| | | | 727 | | | | | | 434 | | |
Income tax payable
|
| | | | 620 | | | | | | 631 | | |
Notes payable, current portion
|
| | | | 5,173 | | | | | | 1,875 | | |
Operating lease liability, current portion
|
| | | | 1,106 | | | | | | 1,082 | | |
Total Current Liabilities
|
| | | | 17,739 | | | | | | 17,990 | | |
Long-Term Liabilities | | | | | | | | | | | | | |
Notes payable-noncurrent, net of debt issuance costs
|
| | | | 34,368 | | | | | | 37,053 | | |
Deferred tax liabilities
|
| | | | — | | | | | | 453 | | |
Operating lease liability, net of current portion
|
| | | | 4,409 | | | | | | 4,694 | | |
Total Long-Term Liabilities
|
| | | | 38,777 | | | | | | 42,200 | | |
Total Liabilities
|
| | | | 56,516 | | | | | | 60,190 | | |
Commitments and Contingencies (See Note 2) | | | | | | | | | | | | | |
Redeemable Preferred Stock | | | | | | | | | | | | | |
Preferred stock, 10,000,000 shares at $0.0002 par value, authorized,
10,000,000 shares issued and outstanding |
| | | | 2,000 | | | | | | 2,000 | | |
Equity | | | | | | | | | | | | | |
Common stock, 40,000,000 shares at $0.0002 par value, authorized,
20,960,387 shares issued and outstanding as of March 31, 2022, 20,875,475 shares issued and outstanding as of December 31, 2021 |
| | | | 4 | | | | | | 4 | | |
Additional paid in capital
|
| | | | 2,020 | | | | | | 1,619 | | |
Retained earnings
|
| | | | 10,140 | | | | | | 12,438 | | |
Total Equity
|
| | | | 12,164 | | | | | | 14,061 | | |
Total Liabilities, Redeemable Preferred Stock and Shareholders’ Equity
|
| | | $ | 70,680 | | | | | $ | 76,251 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Net Sales
|
| | | $ | 18,303 | | | | | $ | 15,646 | | |
Cost of Goods Sold
|
| | | | 12,808 | | | | | | 9,805 | | |
Gross Profit
|
| | | | 5,495 | | | | | | 5,841 | | |
Operating Expenses | | | | | | | | | | | | | |
Research and development
|
| | | | 339 | | | | | | 519 | | |
General and administrative
|
| | | | 3,626 | | | | | | 2,096 | | |
Selling and marketing
|
| | | | 3,092 | | | | | | 1,884 | | |
Total Operating Expenses
|
| | | | 7,057 | | | | | | 4,499 | | |
(Loss) Income From Operations
|
| | | | (1,562) | | | | | | 1,342 | | |
Other (Expense) Income | | | | | | | | | | | | | |
Interest (expense) Income
|
| | | | (1,263) | | | | | | — | | |
Total Other (Expense) Income
|
| | | | (1,263) | | | | | | — | | |
(Loss) Income Before Taxes
|
| | | | (2,825) | | | | | | 1,342 | | |
(Benefit) Provision for Income Taxes
|
| | | | (527) | | | | | | 276 | | |
Net (Loss) Income
|
| | | $ | (2,298) | | | | | $ | 1,066 | | |
(Loss) Earnings Per Share-Basic
|
| | | $ | (0.11) | | | | | $ | 0.04 | | |
(Loss) Earnings Per Share-Diluted
|
| | | $ | (0.11) | | | | | $ | 0.03 | | |
Weighted Average Number of Shares-Basic
|
| | | | 20,914,344 | | | | | | 20,042,760 | | |
Weighted Average Number of Shares-Diluted
|
| | | | 20,914,344 | | | | | | 21,562,287 | | |
| | |
Redeemable
Preferred Stock |
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Retained
Earnings (Deficit) |
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balance – January 1, 2021
|
| | | | 10,000,000 | | | | | $ | 2,000 | | | | | | | 20,040,470 | | | | | $ | 4 | | | | | $ | 451 | | | | | $ | 8,100 | | | | | $ | 8,555 | | |
Net income
|
| | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,066 | | | | | | 1,066 | | |
Stock compensation expense
|
| | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 95 | | | | | | — | | | | | | 95 | | |
Exercise of stock options
|
| | | | — | | | | | | — | | | | | | | 11,885 | | | | | | — | | | | | | 10 | | | | | | — | | | | | | 10 | | |
Balance – March 31, 2021
|
| | | | 10,000,000 | | | | | | 2,000 | | | | | | | 20,052,355 | | | | | | 4 | | | | | | 556 | | | | | | 9,166 | | | | | | 9,726 | | |
Balance – January 1, 2022
|
| | | | 10,000,000 | | | | | | 2,000 | | | | | | | 20,875,475 | | | | | | 4 | | | | | | 1,619 | | | | | | 12,438 | | | | | | 14,061 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,298) | | | | | | (2,298) | | |
Stock compensation expense
|
| | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 288 | | | | | | — | | | | | | 288 | | |
Exercise of stock options
|
| | | | — | | | | | | — | | | | | | | 84,912 | | | | | | — | | | | | | 113 | | | | | | — | | | | | | 113 | | |
Balance – March 31, 2022
|
| | | | 10,000,000 | | | | | $ | 2,000 | | | | | | | 20,960,387 | | | | | $ | 4 | | | | | $ | 2,020 | | | | | $ | 10,140 | | | | | $ | 12,164 | | |
| | |
For the Three Months Ended
March 31, |
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Cash flows from Operating Activities | | | | | | | | | | | | | |
Net (Loss) Income
|
| | | $ | (2,298) | | | | | $ | 1,066 | | |
Adjustments to Reconcile Net (Loss) Income to Net Cash | | | | | | | | | | | | | |
(Used in) Provided by Operating Activities
|
| | | | | | | | | | | | |
Stock based compensation
|
| | | | 288 | | | | | | 95 | | |
Amortization of debt discount
|
| | | | 613 | | | | | | — | | |
Deferred tax liability
|
| | | | (527) | | | | | | (11) | | |
Depreciation and amortization
|
| | | | 192 | | | | | | 103 | | |
Loss (gain) on disposal of property and equipment
|
| | | | 62 | | | | | | — | | |
Changes in Assets and Liabilities | | | | | | | | | | | | | |
Accounts receivable
|
| | | | (1,217) | | | | | | (139) | | |
Inventories
|
| | | | (5,946) | | | | | | (1,868) | | |
Prepaid expenses
|
| | | | (502) | | | | | | (96) | | |
Prepaid inventory
|
| | | | 2,425 | | | | | | (1,036) | | |
Other current assets
|
| | | | (637) | | | | | | 177 | | |
Other assets
|
| | | | 274 | | | | | | — | | |
Income taxes payable
|
| | | | (11) | | | | | | 306 | | |
Accounts payable and accrued expenses
|
| | | | (4,119) | | | | | | 921 | | |
Uncertain tax position liability
|
| | | | — | | | | | | (19) | | |
Customer deposits
|
| | | | 293 | | | | | | 2,246 | | |
Total Adjustments
|
| | | | (8,812) | | | | | | 679 | | |
Net Cash (Used in) Provided by Operating Activities
|
| | | | (11,110) | | | | | | 1,745 | | |
Cash Flows From Investing Activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (4,524) | | | | | | (1,318) | | |
Net Cash Used in Investing Activities
|
| | | | (4,524) | | | | | | (1,318) | | |
Cash Flows From Financing Activities | | | | | | | | | | | | | |
Proceeds from exercise of options
|
| | | | 111 | | | | | | 10 | | |
Net Cash Provided by Financing Activities
|
| | | | 111 | | | | | | 10 | | |
Net (Decrease) Increase in Cash and Restricted Cash
|
| | | | (15,523) | | | | | | 437 | | |
Beginning cash and restricted cash
|
| | | | 28,630 | | | | | | 6,206 | | |
Ending cash and restricted cash
|
| | | $ | 13,107 | | | | | $ | 6,643 | | |
Supplemental Disclosures of Cash Flow Information: | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 658 | | | | | $ | — | | |
Supplemental Non-Cash Items
|
| | | | | | | | | | | | |
Receivable of options exercised
|
| | | $ | 2 | | | | | $ | — | | |
Recognition of right of use asset obtained in exchange for operating lease liability
|
| | | $ | — | | | | | $ | 3,120 | | |
Unaudited Condensed SCF
|
| |
For the three months
ended March 31, 2022 As Originally Reported |
| |
Correction of
Immaterial Error |
| |
For the three months
ended March 31, 2022 As Revised |
| |||||||||
Total Adjustments (Operating Activity)
|
| | | | (8,343) | | | | | | (469) | | | | | | (8,812) | | |
Net Cash (Used In) Provided by Operating Activities
|
| | | | (10,172) | | | | | | (938) | | | | | | (11,110) | | |
Net Cash Provided By Financing Activities
|
| | | | (111) | | | | | | 222 | | | | | | 111 | | |
Unaudited Condensed Statement of Operations
|
| |
For the three months
ended March 31, 2021 As Originally Reported |
| |
Correction of
Immaterial Error |
| |
For the three months
ended March 31, 2021 As Revised |
| |||||||||
(Loss) Earnings Per Share – Basic
|
| | | | 0.03 | | | | | | 0.01 | | | | | | 0.04 | | |
| Office furniture and equipment | | |
3 to 7 years
|
|
| Vehicles | | |
5 years
|
|
| Machinery and equipment | | |
3 to 7 years
|
|
| Leasehold improvements | | |
Remaining Term of Lease
|
|
Sales
|
| |
2022
|
| |
2021
|
| ||||||
Retail
|
| | | $ | 13,035 | | | | | $ | 13,023 | | |
Distributor
|
| | | | 2,087 | | | | | | 1,594 | | |
Original equipment manufacture
|
| | | | 3,181 | | | | | | 1,029 | | |
Total
|
| | | | 18,303 | | | | | | 15,646 | | |
| | |
March 31,
2022 |
| |
March 31,
2021 |
| ||||||
Basic (Loss) Earnings per common share: | | | | | | | | | | | | | |
Net (Loss) Income
|
| | | $ | (2,298) | | | | | $ | 1,066 | | |
(Loss) Income available for distribution
|
| | | | (2,298) | | | | | | 1,066 | | |
Income allocated to participating securities
|
| | | | — | | | | | | (355) | | |
Net (Loss) Income available to common shareholders
|
| | | $ | (2,298) | | | | | $ | 711 | | |
Basic (loss) earnings per common share: | | | | | | | | | | | | | |
Net (Loss) Income available to common shareholders
|
| | | $ | (2,298) | | | | | $ | 711 | | |
Weighted average number of common shares-basic
|
| | | | 20,914,344 | | | | | | 20,042,760 | | |
(Loss) Earnings per share, basic
|
| | | $ | (0.11) | | | | | $ | 0.04 | | |
Diluted (loss) earnings per common share: | | | | | | | | | | | | | |
Net (Loss) Income available to common shareholders
|
| | | $ | (2,298) | | | | | $ | 711 | | |
Weighted average number of common shares-basic
|
| | | | 20,914,344 | | | | | | 20,042,760 | | |
Dilutive effect related to stock options
|
| | | | — | | | | | | 1,519,527 | | |
Weighted average diluted shares outstanding
|
| | | | 20,914,344 | | | | | | 21,562,287 | | |
(Loss) Earnings per share, diluted
|
| | | $ | (0.11) | | | | | $ | 0.03 | | |
| | |
March 31,
2022 |
| |
March 31,
2021 |
| ||||||
Options
|
| | | | 2,480,688 | | | | | | — | | |
Weighted average number of common shares-basic
|
| | | | 2,480,688 | | | | | | — | | |
| | |
March 31,
2022 |
| |
December 31,
2021 |
| ||||||
Raw material
|
| | | $ | 25,683 | | | | | $ | 22,885 | | |
Work in process
|
| | | | — | | | | | | — | | |
Finished goods
|
| | | | 7,390 | | | | | | 4,242 | | |
Total inventory
|
| | | $ | 33,073 | | | | | $ | 27,127 | | |
| | |
March 31,
2022 |
| |
December 31,
2021 |
| ||||||
Operating lease right-of-use assets
|
| | | $ | 5,435 | | | | | $ | 5,709 | | |
Short-term operating lease liabilities
|
| | | | 1,106 | | | | | | 1,082 | | |
Long-term operating lease liabilities
|
| | | | 4,409 | | | | | | 4,694 | | |
Total operating lease liabilities
|
| | | $ | 5,515 | | | | | $ | 5,776 | | |
Weighted average remaining lease term
|
| |
4.3 years
|
| |
4.6 years
|
| ||||||
Weighted average discount rate
|
| | | | 5.2% | | | | | | 5.2% | | |
|
2022
|
| | | $ | 1,022 | | |
|
2023
|
| | | | 1,399 | | |
|
2024
|
| | | | 1,435 | | |
|
2025
|
| | | | 1,440 | | |
|
2026
|
| | | | 893 | | |
|
Total lease payments
|
| | | | 6,189 | | |
|
Less imputed interest
|
| | | | 674 | | |
|
Total operating lease liabilities
|
| | | | 5,515 | | |
|
Payment Reserve Fund
|
| | | $ | 3,044 | | |
|
Capitalized Interest Fund
|
| | | | 144 | | |
|
Total
|
| | | $ | 3,188 | | |
|
2022
|
| | | $ | 1,875 | | |
|
2023
|
| | | | 22,500 | | |
|
2024
|
| | | | 20,625 | | |
|
Total
|
| | | | 45,000 | | |
|
Less: Unamortized debt issuance costs, noncurrent
|
| | | | (5,459) | | |
|
Total debt
|
| | | | 39,541 | | |
|
Less: current portion of debt, net of debt discount
|
| | | | (5,173) | | |
|
Total long-term debt
|
| | | $ | 34,368 | | |
| | |
For the Three Months Ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Convertible preferred stock outstanding
|
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Options issued and outstanding
|
| | | | 3,071,677 | | | | | | 2,480,688 | | |
Common stock outstanding
|
| | | | 20,960,387 | | | | | | 20,052,355 | | |
Shares available for future issuance
|
| | | | 1,020,127 | | | | | | 475,157 | | |
Total
|
| | | | 35,052,191 | | | | | | 33,008,200 | | |
| | |
Number of
Options |
| |
Weighted-Average
Exercise Price |
| |
Weighted-Average
Grant Date Fair Value |
| |
Weighted-Average
Remaining Contractual Life (in years) |
| |
Aggregate
intrinsic value |
| |||||||||||||||
Balances, January 1, 2021
|
| | | | 2,563,080 | | | | | $ | 0.45 | | | | | $ | 0.72 | | | | | | 7.92 | | | | | $ | 650,965 | | |
Options granted
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Options forfeited
|
| | | | (70,507) | | | | | | 0.66 | | | | | | 2.07 | | | | | | | | | | | | — | | |
Options exercised
|
| | | | (11,885) | | | | | | 0.61 | | | | | | 1.63 | | | | | | | | | | | | — | | |
Balances, March 31, 2021
|
| | | | 2,480,688 | | | | | $ | 0.44 | | | | | $ | 0.68 | | | | | | 7.61 | | | | | $ | 7,660,272 | | |
Balances, January 1, 2022
|
| | | | 3,122,398 | | | | | $ | 1.98 | | | | | $ | 1.38 | | | | | | 8.52 | | | | | $ | 6,549,591 | | |
Options granted
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Options forfeited
|
| | | | (9,800) | | | | | | 1.44 | | | | | | 2.17 | | | | | | | | | | | | — | | |
Options exercised
|
| | | | (40,921) | | | | | | 0.49 | | | | | | 0.83 | | | | | | | | | | | | — | | |
Balances, March 31, 2022
|
| | | | 3,071,677 | | | | | $ | 2.00 | | | | | $ | 1.39 | | | | | | 8.29 | | | | | $ | 6,376,630 | | |
At March 31, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Vested and Exercisable
|
| | | | 671,257 | | | | | $ | 0.89 | | | | | | | | | | | | 7.74 | | | | | $ | 2,141,609 | | |
Vested and expected to vest
|
| | | | 3,071,677 | | | | | $ | 2.00 | | | | | | | | | | | | 8.29 | | | | | $ | 6,376,630 | | |
| | |
Page
|
| | |||||
ARTICLE I
|
| | ||||||||
CERTAIN DEFINITIONS
|
| | ||||||||
| | | | A-2 | | | | |||
| | | | A-15 | | | | |||
| | | | A-17 | | | | |||
ARTICLE II
|
| | | | ||||||
THE MERGER; CLOSING
|
| | ||||||||
| | | | A-17 | | | | |||
| | | | A-17 | | | | |||
| | | | A-17 | | | | |||
| | | | A-18 | | | | |||
| | | | A-18 | | | | |||
| | | | A-19 | | | | |||
| | | | A-19 | | | | |||
ARTICLE III
|
| | ||||||||
EFFECTS OF THE MERGER ON THE COMPANY CAPITAL STOCK AND
EQUITY AWARDS |
| | ||||||||
| | | | A-19 | | | | |||
| | | | A-20 | | | | |||
| | | | A-20 | | | | |||
| | | | A-21 | | | | |||
| | | | A-23 | | | | |||
| | | | A-23 | | | | |||
ARTICLE IV
|
| | ||||||||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
| | ||||||||
| | | | A-24 | | | | |||
| | | | A-24 | | | | |||
| | | | A-24 | | | | |||
| | | | A-25 | | | | |||
| | | | A-25 | | | | |||
| | | | A-25 | | | | |||
| | | | A-26 | | | | |||
| | | | A-26 | | | | |||
| | | | A-27 | | | | |||
| | | | A-27 | | | | |||
| | | | A-27 | | | | |||
| | | | A-27 | | | |
| | |
Page
|
| |||
| | | | A-29 | | | |
| | | | A-31 | | | |
| | | | A-32 | | | |
| | | | A-34 | | | |
| | | | A-34 | | | |
| | | | A-34 | | | |
| | | | A-34 | | | |
| | | | A-34 | | | |
| | | | A-35 | | | |
| | | | A-36 | | | |
| | | | A-37 | | | |
| | | | A-38 | | | |
| | | | A-38 | | | |
| | | | A-38 | | | |
| | | | A-38 | | | |
| | | | A-39 | | | |
| | | | A-39 | | | |
| | | | A-39 | | | |
| | | | A-40 | | | |
| | | | A-40 | | | |
ARTICLE V
|
| ||||||
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB
|
| ||||||
| | | | A-40 | | | |
| | | | A-41 | | | |
| | | | A-41 | | | |
| | | | A-42 | | | |
| | | | A-42 | | | |
| | | | A-42 | | | |
| | | | A-43 | | | |
| | | | A-43 | | | |
| | | | A-44 | | | |
| | | | A-44 | | | |
| | | | A-44 | | | |
| | | | A-44 | | | |
| | | | A-45 | | | |
| | | | A-45 | | | |
| | | | A-45 | | | |
| | | | A-45 | | | |
| | | | A-47 | | | |
| | | | A-47 | | | |
| | | | A-48 | | |
| | |
Page
|
| |||
| | | | A-48 | | | |
| | | | A-48 | | | |
ARTICLE VI
|
| ||||||
COVENANTS OF THE COMPANY
|
| ||||||
| | | | A-49 | | | |
| | | | A-51 | | | |
| | | | A-52 | | | |
| | | | A-52 | | | |
| | | | A-53 | | | |
| | | | A-53 | | | |
ARTICLE VII
|
| ||||||
COVENANTS OF ACQUIROR
|
| ||||||
| | | | A-53 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-56 | | | |
| | | | A-57 | | | |
| | | | A-58 | | | |
| | | | A-58 | | | |
| | | | A-58 | | | |
| | | | A-58 | | | |
| | | | A-58 | | | |
| | | | A-58 | | | |
ARTICLE VIII
|
| ||||||
JOINT COVENANTS
|
| ||||||
| | | | A-59 | | | |
| | | | A-60 | | | |
| | | | A-63 | | | |
| | | | A-63 | | | |
| | | | A-64 | | | |
| | | | A-65 | | | |
ARTICLE IX
|
| ||||||
CONDITIONS TO OBLIGATIONS
|
| ||||||
| | | | A-65 | | | |
| | | | A-65 | | |
| | |
Page
|
| |||
| | | | A-66 | | | |
ARTICLE X
|
| ||||||
TERMINATION/EFFECTIVENESS
|
| ||||||
| | | | A-66 | | | |
| | | | A-67 | | | |
ARTICLE XI
|
| ||||||
MISCELLANEOUS
|
| ||||||
| | | | A-67 | | | |
| | | | A-68 | | | |
| | | | A-68 | | | |
| | | | A-69 | | | |
| | | | A-69 | | | |
| | | | A-69 | | | |
| | | | A-69 | | | |
| | | | A-69 | | | |
| | | | A-69 | | | |
| | | | A-70 | | | |
| | | | A-70 | | | |
| | | | A-70 | | | |
| | | | A-70 | | | |
| | | | A-70 | | | |
| | | | A-71 | | | |
| | | | A-71 | | | |
| | | | A-71 | | | |
| | | | A-71 | | | |
Exhibits | | | |||||
Exhibit A
Form of Amended and Restated Certificate of Incorporation of Acquiror
|
| | | | | | |
Exhibit B
Form of Amended and Restated Bylaws of Acquiror
|
| | | | | | |
Exhibit C
Form of Registration Rights Agreement
|
| | | | | | |
Exhibit D
Form of Equity Incentive Plan
|
| | | | | | |
Exhibit E
Forms of Incentive Option Award Agreement, Nonqualified Option
Award Agreement, and Restricted Stock Unit Agreement
|
| | | | | | |
Exhibit F
Form of Employee Stock Purchase Plan
|
| | | | | | |
Annexes | | | | | | | |
|
| | | | | | |
Scenario
|
| |
Minimum Cash
Balance After Fees(1) |
| |
Cash Transaction
Bonus |
| |
Acquiror Warrant
Proceed Bonus |
|
Scenario A | | | Less than $20,000,000 | | | No bonus to be paid. | | | Messrs. Phares and Nichols shall each receive 5% of proceeds as a result of exercise of Acquiror Warrants (for an aggregate of 10% of proceeds). | |
Scenario B | | | Between $20,000,000 and $50,000,000 | | | Messrs. Phares and Nichols shall each receive a cash transaction bonus of $2,000,000 (for an aggregate of $4,000,000). | | | Messrs. Phares and Nichols shall each receive 2.5% of proceeds as a result of exercise of Acquiror Warrants (for an aggregate of 5% of proceeds). | |
Scenario C | | | Greater than $50,000,000 | | | Messrs. Phares and Nichols shall each receive a cash transaction bonus of $2,000,000 (for an aggregate of $4,000,000); provided, that every dollar above $50,000,000 of Minimum Cash Balance After Fees shall be split equally between Messrs. Phares and Nichols up to a cash transaction bonus of $4,000,000 to each (for an aggregate of $8,000,000 in the event that Minimum Cash Balance After Fees is greater than or equal to $54,000,000). | | | To the extent that Minimum Cash Balance After Fees is less than $54,000,000, upon the exercise of Acquiror Warrants, each of Messrs. Phares and Nichols shall receive a percentage of the proceeds from the sale of Acquiror Warrants such that the sum of the Acquiror Warrant Proceed Bonus and the cash transaction bonus received by each of Messrs. Phares and Nichols is equal to $4,000,000 (for an aggregate of $8,000,000). | |
By: |
|
| | | | | |
Page
|
| |||
ARTICLE I OFFICES | | | | | C-1 | | | |||
| | | | C-1 | | | ||||
| | | | C-1 | | | ||||
| | | | C-1 | | | ||||
ARTICLE II STOCKHOLDERS’ MEETINGS | | | | | C-1 | | | |||
| | | | C-1 | | | ||||
| | | | C-1 | | | ||||
| | | | C-1 | | | ||||
| | | | C-1 | | | ||||
| | | | C-1 | | | ||||
| | | | C-2 | | | ||||
| | | | C-2 | | | ||||
| | | | C-2 | | | ||||
| | | | C-3 | | | ||||
| | | | C-3 | | | ||||
| | | | C-3 | | | ||||
| | | | C-3 | | | ||||
| | | | C-4 | | | ||||
| | | | C-4 | | | ||||
ARTICLE III DIRECTORS | | | | | C-8 | | | |||
| | | | C-8 | | | ||||
| | | | C-8 | | | ||||
| | | | C-8 | | | ||||
| | | | C-8 | | | ||||
| | | | C-8 | | | ||||
| | | | C-8 | | | ||||
| | | | C-8 | | | ||||
| | | | C-8 | | | ||||
| | | | C-9 | | | ||||
| | | | C-9 | | | ||||
| | | | C-9 | | | ||||
| | | | C-9 | | | ||||
| | | | C-9 | | | ||||
| | | | C-10 | | | ||||
ARTICLE IV OFFICERS | | | | | C-10 | | | |||
| | | | C-10 | | | ||||
| | | | C-10 | | | ||||
| | | | C-10 | | | ||||
| | | | C-10 | | | ||||
| | | | C-10 | | | ||||
| | | | C-10 | | |
| | | | | |
Page
|
| |||
ARTICLE V STOCK | | | | | C-10 | | | |||
| | | | C-10 | | | ||||
| | | | C-11 | | | ||||
| | | | C-11 | | | ||||
| | | | C-11 | | | ||||
ARTICLE VI NOTICES | | | | | C-11 | | | |||
| | | | C-11 | | | ||||
| | | | C-12 | | | ||||
ARTICLE VII INDEMNIFICATION AND ADVANCEMENT OF EXPENSES | | | | | C-12 | | | |||
| | | | C-12 | | | ||||
| | | | C-12 | | | ||||
| | | | C-12 | | | ||||
| | | | C-13 | | | ||||
| | | | C-13 | | | ||||
| | | | C-13 | | | ||||
| | | | C-13 | | | ||||
ARTICLE VIII GENERAL PROVISIONS | | | | | C-13 | | | |||
| | | | C-13 | | | ||||
| | | | C-13 | | | ||||
| | | | C-13 | | | ||||
| | | | C-13 | | | ||||
| | | | C-13 | | | ||||
| | | | C-14 | | | ||||
| | | | C-14 | | | ||||
| | | | C-14 | | | ||||
| | | | C-14 | | | ||||
ARTICLE IX LOCK-UP | | | | | C-14 | | | |||
ARTICLE X AMENDMENTS | | | | | C-15 | | | |||
| | | | C-15 | | |
By: |
|
Stockholder Name
|
| |
Initial Shares
|
| |
Initial Warrants
|
| |
PIPE Shares
|
| |||||||||
Jonathan Biele
|
| | | | 22,000 | | | | | | — | | | | | | — | | |
Perry Boyle
|
| | | | 22,000 | | | | | | — | | | | | | — | | |
Roderick Hardamon
|
| | | | 22,000 | | | | | | — | | | | | | — | | |
Jory Des Jardins
|
| | | | 22,000 | | | | | | — | | | | | | — | | |
Hitesh Thakrar
|
| | | | 22,000 | | | | | | — | | | | | | — | | |
Todd Thomson
|
| | | | 22,000 | | | | | | — | | | | | | — | | |
Chardan NexTech Investments 2 LLC
|
| | | | 3,030,500 | | | | | | — | | | | | | [500,000] | | |
Chardan NexTech 2 Warrant Holdings LLC
|
| | | | — | | | | | | 4,627,858 | | | | | | — | | |
Total:
|
| | | | 3,162,500 | | | | | | 4,627,858 | | | |
Stockholder Name
|
| |
Merger Shares
|
| |
Earnout Shares (%)
|
| ||||||
Denis Phares
|
| | | | [•] | | | | | | [•]% | | |
Phares 2021 GRAT dated July 9, 2021
|
| | | | | | | | | | | | |
Sean Nichols
|
| | | | | | | | | | | | |
Nichols Living Trust 2015
|
| | | | | | | | | | | | |
Nichols GRAT I dated June 14, 2021
|
| | | | | | | | | | | | |
John Marchetti
|
| | | | | | | | | | | | |
Nicole Harvey
|
| | | | | | | | | | | | |
Dynavolt Technology (HK) Ltd
|
| | | | | | | | | | | | |
| | | | By: | | |
|
| |||
| | | | | | | Name: | | | ||
| | | | | | | Title: | | | ||
| | | | Address for Notices: | | ||||||
| | | |
|
| ||||||
| | | |
|
| ||||||
| | | | Name in which shares are to be registered: | | ||||||
| | | |
|
|
Commitment Party
|
| |
Commitment Percentage
|
| |||
EICF Agent LLC
|
| | | | 40% | | |
Chardan Commitment Party
|
| | | | 60% | | |
|
By:
Name:
Title: |
| | ||
|
CHARDAN NEXTECH ACQUISITION 2 CORP.
|
| | ||
|
By:
Name:
Title: |
| | | |
Provision
|
| |
Description
|
|
SPAC:
|
| | Chardan NexTech Acquisition 2 Corp. | |
Investor:
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A newly formed entity by Chardan Capital Markets LLC (“Chardan”) or an existing affiliate of Chardan (the “Investor”).
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Issuer:
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Entity that will be the post-business combination public company (the “Issuer”).
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Facility:
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A three-year standing equity facility (the “Facility”) to enable the Issuer to raise a total of up to $150MM (the “Aggregate Commitment Amount”) from time to time as it elects, subject to the terms of the Facility, by putting shares (the “Facility Shares”) of its common stock (the “Common Stock”) to the Investor at then-current pricing, as specified further below.
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Purchase Price of Facility Shares:
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VWAP on the Purchase Date (each as defined below), less three and one-half percent (3.5%).
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“VWAP” means the volume-weighted average price of the shares of Common Stock on the applicable trading day(s), adjusted to exclude block trades and trades that individually exceed 20,000 shares.
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Put Right:
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Subject to the terms of the Definitive Documentation, the Issuer has the right, from time to time at its discretion, to require (a “Put”) the Investor to purchase shares of Common Stock up to the Aggregate Commitment Amount. The Issuer will initiate a Put by delivering, during the morning prior to market open on any trading days it chooses (each, a “Purchase Date”), notice to the Investor specifying the number of Facility Shares (the “Target Number”) to be purchased by the Investor on that trading day. The Investor must purchase the Target Number of Facility Shares on the Purchase Date; provided that the Investor will not be obligated to (but may, at its option, choose to) purchase Facility Shares to the extent such purchase: (a) would exceed 20% of the number of shares of the Common Stock that would count towards VWAP on that date, (b) would cause the aggregate purchase price for that trading day’s Put to exceed $3MM or (c) would cause the Investor, together with its affiliates, to exceed 9.9% beneficial ownership, as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder; provided, further, that in such case the number of Facility Shares so required to be purchased will be cut back so as to avoid triggering any of the events in (a), (b) or (c). Promptly following the close of trading on the Purchase Date, Investor will deliver to Issuer a notice (the “Confirmation”) confirming the total number of Facility Shares purchased on that date and their aggregate purchase price.
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Any unsold portion of the Facility will remain outstanding so that further Puts may be initiated by the Issuer.
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Provision
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Description
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For the avoidance of doubt, the Investor shall not be required to purchase any Facility Shares except to the extent that they are eligible to be resold pursuant to a Registration Statement (as defined below) that is at such time effective and available and FINRA, as applicable, has provided its no-objection letter, and subject to the other conditions specified in the Definitive Documentation.
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Term of Facility:
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The Facility shall remain outstanding until three years following the later of (i) the business combination closing (the “Closing”) and (ii) the effective date of the Registration Statement, unless terminated earlier upon reasonable prior notice by the Issuer or as otherwise set forth in the Definitive Documentation (which shall only include customary termination provisions).
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In the event the merger agreement relating to the business combination (the “Merger Agreement”) is terminated without the Closing having occurred, the Definitive Documentation (if executed earlier) shall automatically terminate.
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Definitive Documentation:
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The purchase agreement and registration rights agreement (collectively, the “Definitive Documentation”) will include customary conditions, representations and warranties, registration rights (as described herein) and other covenants and indemnities. The Definitive Documentation will also contain customary termination rights and suspension events with respect to the Investor’s purchase obligation.
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Commitment Fee:
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On the earlier of (a) the thirtieth (30th) trading day following the Closing and (b) the effective date of the Registration Statement, the Issuer shall issue to the Investor a number of shares of Common Stock (the “Commitment Shares”) equal to the quotient obtained by dividing $1MM by the VWAP of the Issuer’s shares of common stock for the immediately prior five (5) trading days. The Commitment Shares will be registered for resale on the Registration Statement, but will be subject, if required by the FINRA rules, to a lock-up period of six (6) months.
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Registration of Shares:
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The Definitive Documentation shall provide that, within thirty (30) calendar days following the Closing, the Issuer shall file with the SEC, and use commercially reasonable efforts to have declared effective as promptly as practicable thereafter, a resale registration statement registering the resale by the Investor (a “Registration Statement”) of the Commitment Shares and the Facility Shares; provided that the total number of shares registered in connection with the Facility will not exceed 19.99% of the total number of shares of Common Stock outstanding as of the execution of the Definitive Documentation.
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Commencement of the Facility and effectiveness of the Registration Statement are subject to receipt of a no-objection letter from FINRA. The Issuer shall be required to keep the Registration Statement effective for at least one year following the full term of the Facility.
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Provision
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Description
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The Definitive Documentation shall provide for the Issuer to include the requisite disclosure in the Registration Statement and provide customary deliverables to the Investor for an underwritten offering of securities, including due diligence, legal opinions and comfort letters and related plan of distribution disclosure.
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Settlement:
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The transfer agent and the Issuer will deliver the total number of Facility Shares specified in the Confirmation on a T+1 basis; the Definitive Documentation will specify remedies, including customary penalties, for lack of settlement by T+2.
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Conditions Precedent to Purchases of Facility Shares:
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Conditions precedent include, among other things, completion of customary due diligence for facilities of this type, preparation and execution of Definitive Documentation reasonably acceptable to both parties and Dragonfly Energy Corp. (the “Target”), filing and maintaining effectiveness of the Registration Statement, and no-objection clearance from FINRA (which the Investor will promptly obtain).
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No Specified Transactions:
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The Definitive Documentation will include the provision contained in paragraph 2 of the letter agreement, dated May 15, 2022, by and among the SPAC, the Target and the Investor, which provision shall be stated to apply from and after the date of the Definitive Documentation until the three-year anniversary of the Definitive Documentation.
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Exhibit
Number |
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Description
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2.1†* | | | | |
2.1(a)* | | | | |
3.1* | | | | |
3.2* | | | | |
3.3* | | | Form of Third Amended and Restated Certificate of Incorporation (to be effective upon consummation of the Merger) (included as Annex B to the proxy statement/prospectus). | |
3.4* | | | |
Exhibit
Number |
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Description
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4.1* | | | | |
4.2* | | | | |
4.3* | | | | |
4.4* | | | | |
4.5* | | | | |
4.6** | | | Specimen $10 Warrant Certificate of Dragonfly Energy Corp. | |
4.7** | | | Specimen Penny Warrant Certificate of Dragonfly Energy Corp. | |
4.8* | | | | |
4.9* | | | | |
5.1* | | | | |
8.1 | | | | |
10.1* | | | | |
10.2* | | | | |
10.3* | | | | |
10.4* | | | | |
10.5* | | | | |
10.6†* | | | |
Exhibit
Number |
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Description
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10.7* | | | | |
10.8* | | | | |
10.9††* | | | | |
10.10††* | | | | |
10.11* | | | | |
10.12* | | | | |
10.13* | | | | |
21.1* | | | | |
23.1 | | | | |
23.2 | | | | |
23.3* | | | | |
23.4* | | | | |
23.5* | | | | |
24.1* | | | | |
99.1* | | | | |
99.2* | | | | |
99.3* | | | | |
99.4* | | | | |
99.5* | | | | |
99.6 | | | | |
107* | | | |
NAME
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POSITION
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DATE
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*
Kerry Propper
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Chairman and Director
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August 11, 2022
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/s/ Jonas Grossman
Jonas Grossman
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Chief Executive Officer, President, Secretary, Treasurer and Director
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August 11, 2022
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/s/ Alex Weil
Alex Weil
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Chief Financial Officer and Director
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August 11, 2022
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*
Jonathan Biele
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Director
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August 11, 2022
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*
Perry Boyle
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Director
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August 11, 2022
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*
Roderick Hardamon
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Director
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August 11, 2022
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*
Jory Des Jardins
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Director
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August 11, 2022
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*
Hitesh Thakrar
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Director
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August 11, 2022
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*
Todd Thomson
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Director
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August 11, 2022
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/s/ Jonas Grossman
Jonas Grossman
Attorney-in-fact |
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Exhibit 8.1
O’Melveny & Myers LLP 2765 Sand Hill Road | T: +1 650 473 2600 F: +1 650 473 2601 omm.com |
August 11, 2022
Dragonfly Energy Corp.
1190 Trademark Drive #108
Reno, Nevada 89521
Ladies and Gentlemen:
We have acted as counsel to Dragonfly Energy Corp., a Nevada Corporation (the “Dragonfly”), in connection with the preparation and filing with the Securities and Exchange Commission (the “Commission”) of the Registration Statement on Form S-4 of Chardan NexTech Acquisition 2 Corp., a Delaware corporation (“Chardan”), initially filed with the Commission under the Securities Act of 1933, as amended (the “Securities Act”), on June 17, 2022 (as amended through the date hereof, the “Registration Statement”), relating to the Agreement and Plan of Merger, dated May 15, 2022 (the “Business Combination Agreement”), by and among Chardan, Bronco Merger Sub, Inc., a Nevada corporation (“Merger Sub”, together with Chardan, the “Chardan Parties”), and Dragonfly. Any capitalized terms used but not defined herein unless otherwise stated have the meaning given to such terms in the Business Combination Agreement.
In providing our opinion, we have examined and with your consent are relying upon (i) the Business Combination Agreement, (ii) the Registration Statement, and (iii) such other documents as we have deemed necessary or appropriate for purposes of this opinion. In addition, we have assumed with your consent that (i) the transactions will be consummated in accordance with the provisions of the Business Combination Agreement and as described in the Registration Statement (and no transaction or condition described therein will be waived by any party), (ii) the statements concerning the transactions and the parties thereto set forth in the Business Combination Agreement and in the Registration Statement are true, complete and correct and will remain true, complete and correct at all times up to and including the Effective Time, (iii) the statements and representations made by the Chardan Parties and Dragonfly in their respective officer’s certificates dated as of the date hereof and delivered to us for purposes of this opinion (the “Officer’s Certificates”) are true, complete and correct and will remain true, complete and correct at all times up to and including the Effective Time, (iv) any such statement or representation set forth in the Business Combination Agreement, the Registration Statement or the Officer’s Certificates that is qualified by belief, knowledge, intention, materiality or any comparable or similar qualification, is and will be true, complete and correct as if made without such qualification, (v) the parties to the Business Combination Agreement and their respective subsidiaries will treat the transactions for U.S. federal and applicable state and local income tax purposes in a manner consistent with our opinion, (vi) such parties have complied and will continue to comply with the obligations, covenants and agreements contained in the Business Combination Agreement, and (vii) there will be no change in applicable U.S. federal income tax law from the date hereof through the Effective Time. If any of the above described assumptions is untrue for any reason or if the transactions are consummated in a manner that is different from the manner described in the Business Combination Agreement, the Registration Statement, or the Officer’s Certificates, this opinion may be adversely affected. We have not undertaken any independent investigation of any factual matter set forth in any of the foregoing.
Austin • Century City • Dallas • Houston • Los Angeles • Newport Beach • New York • San Francisco • Silicon Valley • Washington, DC
Beijing • Brussels • Hong Kong • London • Seoul • Shanghai • Singapore • Tokyo
Based upon and subject to the foregoing, and our consideration of such other matters of fact and law as we have considered necessary or appropriate, we hereby confirm that, subject to the assumptions, exceptions, limitations and qualifications set forth herein and in the Registration Statement under the caption “U.S. Federal Income Tax Considerations — Tax Consequences of the Merger to U.S. Holders of Dragonfly Common Stock,” it is our opinion that, for U.S. federal income tax purposes, the Merger should qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
We express no opinion on any issue relating to the tax consequences of the transactions contemplated by the Business Combination Agreement or the Registration Statement other than the opinion set forth above. Our opinion set forth above is based on the Code, Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service and judicial precedents, all as of the date hereof. The foregoing authorities may be repealed, revoked or modified, and any such change may have retroactive effect. Any change in applicable laws or facts and circumstances surrounding the Merger, or any inaccuracy in the statements, facts, assumptions and representations on which we have relied may affect the validity of the opinion set forth herein. We assume no responsibility to inform Dragonfly of any such change or inaccuracy that may occur or come to our attention. In addition, our opinion is being delivered prior to the consummation of the Merger and therefore is prospective and dependent on future events.
This opinion is furnished to you solely in connection with the Registration Statement and this opinion is not to be relied upon for any other purpose without our prior written consent. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement, and to the references therein to us. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ O’Melveny & Myers LLP
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Dragonfly Energy Corp.
Reno, Nevada
We hereby consent to the use in the Proxy Statement/Prospectus constituting a part of this Registration Statement of our report dated April 20, 2022, relating to the financial statements of Dragonfly Energy Corp., which is contained in that Proxy Statement/Prospectus.
We also consent to the reference to us under the caption “Experts” in the Proxy Statement/Prospectus.
/s/ BDO USA, LLP
Spokane, Washington
August 11, 2022
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on Form S-4, of our report dated March 28, 2022, relating to the financial statements of Chardan NexTech Acquisition 2 Corp. which is contained in that Registration Statement. We also consent to the reference to us under the caption “Experts” in the Prospectus.
/s/ WithumSmith+Brown, PC
New York, New York
August 11, 2022
Exhibit 99.6
Consent to be Named as a Director Nominee
In connection with the filing by Chardan NexTech Acquisition 2 Corp. of the Registration Statement on Form S-4 (the “Registration Statement”) with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of Chardan NexTech Acquisition 2 Corp., which will be renamed Dragonfly Energy Holdings Corp., in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
Date: August 11, 2022 | By: | /s/ Jonathan Bellows |
Name: | Jonathan Bellows |