Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth in
the “Introductory Note” above is incorporated by reference into this Item 2.01.
As previously reported by
the Company on a Current Report on Form 8-K filed with the SEC, on October 6, 2022, at the Special Meeting, Chardan’s
stockholders approved the Business Combination Agreement, the Transactions and the other related proposals presented in the Proxy Statement/Prospectus.
On October 7, 2022, the parties to the Business Combination Agreement consummated the Transactions.
In connection with the Business
Combination, holders of an aggregate of 2,071,910 public shares of Common Stock properly exercised their right to have such shares redeemed
for a full pro rata portion of the trust account holding the proceeds from Chardan’s initial public offering, which was approximately
$10.24 per share, or approximately $21,216,358 in the aggregate, calculated as of two (2) business days prior to the Closing. The
remaining amount in the trust account of approximately $10,978,873 was used to fund expenses incurred by Legacy Dragonfly and Chardan
in connection with the Business Combination and will be used for general corporate purposes of the Company following the Business Combination.
As a result of the Business
Combination, each share of Legacy Dragonfly Common Stock outstanding immediately prior to the effective time of the Business Combination
was converted into the right to receive approximately 1.18209 shares of Common Stock. Immediately following consummation of the Transactions,
including the redemption of public shares as described above, there were 44,848,686 shares of Common Stock issued and outstanding. Common
Stock is expected to commence trading on the Nasdaq Global Market under the symbol “DFLI” and the warrants are expected to
commence trading on the Nasdaq Capital Market under the symbol “DFLIW” on October 10, 2022, subject to ongoing review
of the Company’s satisfaction of all listing criteria following the Business Combination.
FORM 10 INFORMATION
Item 2.01(f) of Form 8-K
states that if the registrant was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), as the Company was immediately before the Business Combination, then
the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities
on Form 10 with the SEC. Accordingly, the Company is providing below the information that would be included in a Form 10 if
it were to file a Form 10 with the SEC. Please note that the information provided below relates to the combined company after the
consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.
Cautionary Note Regarding Forward-Looking Statements
Certain statements
contained in this Report may constitute “forward-looking statements” within the meaning of the “safe harbor”
provisions of the United States Private Securities Litigation Reform Act of 1995. In addition, any statements that refer to
projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are
forward-looking statements. Forward-looking statements may be identified by the use of words such as “estimate,”
“plan,” “project,” “forecast,” “intend,” “will,” “expect,”
“anticipate,” “believe,” “seek,” “target,” “designed to” or other
similar expressions that predict or indicate future events or trends or that are not statements of historical matters. The Company
cautions readers of this Report that these forward-looking statements are subject to risks and uncertainties, most of which are
difficult to predict and many of which are beyond the Company’s control, that could cause the actual results to differ
materially from the expected results. These forward-looking statements include, but are not limited to, statements regarding
estimates and forecasts of financial and performance metrics, projections of market opportunity and market share, potential benefits
and the commercial attractiveness to its customers of the Company’s products and services, the potential success of the
Company’s marketing and expansion strategies, the potential for the Company to achieve design awards, and the potential
benefits of the Business Combination (including with respect to shareholder value). These statements are based on various
assumptions, whether or not identified in this Report, and on the current expectations of the Company’s management and are not
predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended
to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact
or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. These
forward-looking statements are subject to a number of risks and uncertainties, including:
| · | the ability to maintain the listing of Common Stock on the Nasdaq; |
| · | the inability to recognize the anticipated benefits our Business Combination may be affected by, among
other things, the ability of the Company to grow and manage growth profitably, maintain relationships with customers, compete within its
industry and retain its key employees; |
|
· |
changes in financial estimates and recommendations by securities analysts concerning the Company or the market in general; |
| · | the Company’s ability to successfully increase market penetration into its target markets; |
| · | the addressable markets that the Company intends to target do not grow as expected; |
| · | the loss of any members of the Company’s senior management team or other key personnel; |
| · | the loss of any relationships with key suppliers including suppliers in China; |
| · | the loss of any relationships with key customers; |
| · | the inability to protect the Company’s patents and other intellectual property; |
| · | the failure to successfully optimize solid state cells or to produce commercially viable solid state cells
in a timely manner or at all, or to scale to mass production; |
| · | changes in applicable laws or regulations; |
| · | the possibility that the Company may be adversely affected by other economic, business and/or competitive
factors (including an economic slowdown or inflationary pressures); |
| · | the impact of the novel coronavirus disease pandemic, including any mutations or variants thereof, and
its effect on business and financial conditions; |
|
· |
the
inability to timely and successfully access the equity line (ChEF) in desired amounts and prices; |
| · | the potential for events or circumstances that result in the Company’s failure to timely achieve
the anticipated benefits of the Company’s customer arrangements with THOR and its affiliate brands (including Keystone); |
| · | the Company’s ability to raise additional capital to fund its operations; |
| · | the Company’s ability to generate revenue from future product sales or its ability to achieve and
maintain profitability; |
| · | the accuracy of the Company’s projections and estimates regarding its expenses, capital requirements,
cash utilization, and need for additional financing; |
| · | the potential scope and value of the Company’s intellectual property and proprietary rights; |
| · | developments relating to the Company’s competitors and its industry; |
| · | the Company’s ability to engage target customers and successfully convert these customers into meaningful
orders in the future; |
| · | the Company’s reliance on two suppliers for its LFP cells and a single supplier for the manufacture
of its battery management system; |
| · | the Company’s likely dependence on a single manufacturing facility; |
| · | the Company’s increasing reliance on software and hardware that is highly complex and technical;
and |
| · | other risks and uncertainties described in the Proxy Statement/Prospectus in the section entitled “Risk
Factors” beginning on page 52 thereof and incorporated herein by reference. |
If any of these risks
materialize or any of the Company’s assumptions prove incorrect, actual results could differ materially from the results
implied by these forward-looking statements. There may be additional risks that the Company is not presently aware of or that the
Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events
and views as of the date of this Report. The Company anticipates that subsequent events and developments will cause the
Company’s assessments to change. However, while the Company may elect to update these forward-looking statements at some point
in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied
upon as representing the Company’s assessments as of any date subsequent to the date of this Report. Accordingly, undue
reliance should not be placed upon the forward-looking statements. Actual results, performance or achievements may, and are likely
to, differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which
those forward-looking statements were based. There can be no assurance that the data contained herein is reflective of future
performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future
performance as projected financial information and other information are based on estimates and assumptions that are inherently
subject to various significant risks, uncertainties and other factors, many of which are beyond the Company’s control.
Business
The business of Chardan and
Legacy Dragonfly before the Merger and the business of the Company following the Merger are described in the Proxy Statement/Prospectus
in the sections entitled “Other Information Related to Chardan” beginning on page 171 thereof and “Information
About Dragonfly” beginning on page 189 thereof and are incorporated herein by reference.
Risk Factors
The risks associated with
the Company’s business are described in the Proxy Statement/Prospectus in the section entitled “Risk Factors”
beginning on page 52 thereof and are incorporated herein by reference. A summary of the risks associated with the Company’s
business are also described on pages 41-43 of the Proxy Statement/Prospectus under the heading “Risk Factors”
and are incorporated herein by reference.
Financial Information
The financial information
of Chardan is described in the Proxy Statement/Prospectus in the sections entitled “Summary Historical Financial Information
of Chardan” and “Chardan’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”
beginning on pages 46 and 183 thereof, respectively, and are incorporated herein by reference.
The financial information
of Legacy Dragonfly is described in the Proxy Statement/Prospectus in the sections entitled “Summary Historical Financial Information
of Dragonfly” and “Dragonfly’s Management’s Discussion and Analysis of Financial Condition and Results
of Operations” beginning on pages 44 and 237 thereof, respectively, and are incorporated herein by reference.
Reference is made to the disclosure
set forth in Item 9.01 of this Report relating to financial information of Chardan and Legacy Dragonfly, which is incorporated herein
by reference.
Properties
The facilities of the Company
are described in the Proxy Statement/Prospectus in the section entitled “Information About Dragonfly—Headquarters, Manufacturing
and Production” beginning on page 202 thereof and is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth
information known to the Company regarding the beneficial ownership of Common Stock immediately following consummation of the Transactions
by:
|
● |
each person who is known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock; |
|
● |
each of the Company’s named executive officers and directors; and |
|
● |
all of the Company’s executive officers and directors as a group. |
Beneficial ownership is determined
according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it
possesses sole or shared voting or investment power over that security, which includes the power to dispose of or to direct the disposition
of the security or has the right to acquire such powers within 60 days. In computing the number of shares of Common Stock beneficially
owned by a person or entity and the percentage ownership, the Company deemed outstanding shares of Common Stock subject to options and
warrants held by that person or entity that are currently exercisable or exercisable within 60 days of the Closing Date. The Company did
not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person or entity.
Unless otherwise noted, the
address of each beneficial owner is c/o Dragonfly Energy Holdings Corp., 1190 Trademark Dr. #108, Reno, Nevada 89521.
The beneficial ownership of
Common Stock is based on 44,848,686 shares of Common Stock issued and outstanding immediately following consummation of the Transactions,
including the redemption of public shares of Common Stock as described above.
Beneficial Ownership Table
Name and Address of Beneficial Owners | |
Number of Shares of Common Stock Beneficially Owned | | |
% | |
5% Holders: | |
| | | |
| | |
Dynavolt Technology (HK) Ltd. | |
| 11,820,900 | | |
| 26.4 | % |
Chardan NexTech Investments 2 LLC(1) | |
| 3,662,500 | | |
| 8.2 | % |
Jonas Grossman(1)(2)(3) | |
| 3,662,500 | | |
| 8.2 | % |
Chardan NexTech 2 Warrant Holdings LLC(4) | |
| 4,627,858 | | |
| — | |
David Gong | |
| 2,364,180 | | |
| 5.3 | % |
| |
| | | |
| | |
Executive Officers and Directors: | |
| | | |
| | |
Dr. Denis Phares(5)(6) | |
| 15,899,110 | | |
| 35.5 | % |
Sean Nichols(5)(7) | |
| 3,558,683 | | |
| 7.9 | % |
Nicole Harvey | |
| 11,821 | | |
| * | |
John Marchetti | |
| — | | |
| — | |
Luisa Ingargiola | |
| — | | |
| — | |
Brian Nelson | |
| — | | |
| — | |
Perry Boyle | |
| 22,000 | | |
| * | |
Jonathan Bellows | |
| — | | |
| — | |
Rick Parod | |
| — | | |
| — | |
Karina Edmonds | |
| — | | |
| — | |
* Less than one percent.
(1) |
Includes 485,000 shares purchased by Chardan Capital Markets LLC in the open market in satisfaction of its purchase commitment under the Subscription Agreement. Jonas Grossman is the managing member of Chardan Capital Markets LLC. As such, Mr. Grossman may be deemed to have beneficial ownership of Common Stock held directly by Chardan Capital Markets LLC. Mr. Grossman disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Certain other employees of Chardan or its affiliates, including each of its executive officers, have direct or indirect membership interests in Chardan Capital Markets LLC, and thus have pecuniary interests in certain of the reported shares. |
(2) | Includes the 3,030,500 shares held by the Sponsor, which may be deemed to be beneficially owned by Jonas
Grossman as the managing member of the Sponsor. |
(3) | Excludes 4,627,858 Chardan private warrants, which Warrant Holdings has agreed not to exercise to the
extent an affiliate of Warrant Holdings is deemed to beneficially own, or it will cause such affiliate to be deemed, to beneficially own,
more than 7.5% of Common Stock. |
(4) | Includes 4,627,858 Chardan private warrants, which the Warrant Holdings has agreed not to exercise to
the extent an affiliate of Warrant Holdings is deemed to beneficially own, or it will cause such affiliate to be deemed, to beneficially
own, more than 7.5% of Common Stock. |
(5) | Excludes 40,000,000 Earnout Shares
of Common Stock as the earnout contingencies have not yet been met. |
(6) | Includes 1,217,906 shares held
on behalf of the Phares 2021 GRAT dated July 9, 2021, of which Dr. Phares is trustee. |
(7) | Includes 54,393 shares held on behalf of the Nichols GRAT I dated June 14, 2021, and 3,383,142 held
on behalf of the Nichols Living Trust 2015, each of which Mr. Nichols is trustee. |
Directors and Executive Officers
Directors
In connection with the Closing,
Kerry Propper, Jonas Grossman, Alex Weil, Jonathan Biele, Roderick Hardamon, Jory Des Jardins, Hitesh Thakrar and Todd Thomson resigned
as directors of Chardan, the size of the board of directors of Chardan (the “Chardan Board”) was decreased from eight
to seven, Dr. Denis Phares, Luisa Ingargiola, Brian Nelson, Jonathan Bellows, Rick Parod and Karina Edmonds were appointed to the
board of directors of the Company (the “Board”), and Perry Boyle continued as a director, in each case, as described
in the Proxy Statement/Prospectus in the section entitled “Management of New Dragonfly After the Business Combination,”
which is incorporated herein by reference.
On October 7, 2022, Rick
Parod and Karina Edmonds were designated to serve as Class A Directors of the Board, with their terms expiring at the first annual
meeting of the stockholders following the Closing. Brian Nelson and Jonathan Bellows were designated to serve as Class B Directors
of the Board, with their terms expiring at the second annual meeting of the stockholders following the Closing. Dr. Denis Phares,
Luisa Ingargiola and Perry Boyle were designated to serve as Class C Directors of the Board with their terms expiring at the third
annual meeting of the stockholders following the Closing. Biographical information for these individuals is set forth in the Proxy Statement/Prospectus
in the section titled “Management of New Dragonfly After the Business Combination” beginning on page 209, which
is incorporated herein by reference. Dr. Denis Phares was appointed to serve as the Chairman of the Board.
Independence of Directors
The Nasdaq listing standards
require that a majority of the Board be independent. An “independent director” is defined generally as a person other than
an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the Board,
would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. The Board
has determined that Luisa Ingargiola, Brian Nelson, Perry Boyle, Jonathan Bellows, Rick Parod and Karina Edmonds are “independent
directors” as defined in the Nasdaq listing standards and applicable SEC rules. The Company’s independent directors will have
regularly scheduled meetings at which only independent directors are present.
The Board created the position
of Lead Independent Director and appointed Luisa Ingargiola to serve in that role. As Lead Independent Director, Ms. Ingargiola will
have the authority and responsibilities described in our Corporate Governance Guidelines and will generally help coordinate the efforts
of our non-employee directors.
Director Compensation
The executive compensation
of the Company’s directors is described in the Proxy Statement/Prospectus in the section entitled “Executive and Director
Compensation of Dragonfly Energy Corp.” beginning on page 216 thereof and is incorporated herein by reference.
Committees of the Board of Directors
The standing committees of
the Board consist of an audit committee (the “Audit Committee”), a compensation committee (the “Compensation
Committee”) and a nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”).
Each of the committees reports to the Board.
The Board appointed Luisa
Ingargiola, Rick Parod and Perry Boyle to serve on the Audit Committee, with Luisa Ingargiola as chair. The Board appointed Luisa Ingargiola,
Brian Nelson and Rick Parod to serve on the Compensation Committee, with Brian Nelson as chair. The Board appointed Brian Nelson, Jonathan
Bellows and Karina Edmonds to serve on the Nominating and Corporate Governance Committee, with Karina Edmonds as chair. Biographical information
for Luisa Ingargiola, Brian Nelson, Perry Boyle, Jonathan Bellows, Rick Parod and Karina Edmonds is set forth in the Proxy Statement/Prospectus
in the section titled “Management of New Dragonfly After the Business Combination” beginning on page 209, which
is incorporated herein by reference.
Executive Officers
Effective immediately prior
to the Closing, Jonas Grossman resigned as President and Chief Executive Officer and Alex Weil resigned as Chief Financial Officer. The
Board appointed Dr. Denis Phares to serve as President and Chief Executive Officer, John Marchetti to serve as Chief Financial Officer,
Sean Nichols to serve as Chief Operating Officer and Nicole Harvey to serve as General Counsel, Compliance Officer and Corporate Secretary.
Biographical information for Dr. Denis Phares, John Marchetti, Sean Nichols and Nicole Harvey is set forth in the Proxy Statement/Prospectus
in the section titled “Management of New Dragonfly After the Business Combination” beginning on page 209, which
is incorporated herein by reference.
Executive Compensation
Executive Compensation
The executive compensation
of the Company’s named executive officers is described in the Proxy Statement/Prospectus in the section entitled “Executive
and Director Compensation of Dragonfly Energy Corp.” beginning on page 216 thereof and is incorporated herein by reference.
Compensation Committee Interlocks and Insider Participation
None of our executive officers
serves as a member of the Board or Compensation Committee (or other committee performing equivalent functions) of any entity that has
one or more executive officers serving on the Board or Compensation Committee.
Certain Relationships and Related Transactions
Certain Relationships and Related Person Transactions
Certain relationships and
related person transactions are described in the Proxy Statement/Prospectus in the section entitled “Certain Relationships and
Related Person Transactions” beginning on page 271 thereof, respectively, and is incorporated herein by reference.
Risk Oversight
Our risk management oversight
is described in the Proxy Statement/Prospectus in the section entitled “Management of New Dragonfly After the Business Combination—Role
of the New Dragonfly Board in Risk Oversight/Risk Committee” beginning on page 211 thereof and that information is incorporated
herein by reference.
Legal Proceedings
Reference is made to the disclosure
regarding legal proceedings in the section of the Proxy Statement/Prospectus entitled “Information About Dragonfly—Legal
Proceedings” on page 206, which is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s
Common Equity and Related Stockholder Matters
Price Range of Securities and Dividends
The market price of and dividends
on Chardan’s common equity, warrants and units and related stockholder matters is described in the Proxy Statement/Prospectus in
the section entitled “Price Range of Securities and Dividends” beginning on page 267 thereof and that information
is incorporated herein by reference.
Prior to the Closing, Chardan’s
publicly traded units, common stock and public warrants were listed on the Nasdaq under the symbols “CNTQU,” “CNTQ”
and “CNTQW,” respectively. Upon the Closing, Common Stock and warrants are expected to be listed on the Nasdaq under the symbols
“DFLI” and “DFLIW,” respectively. Publicly traded units automatically separated into their component securities
upon the Closing, and as a result, no longer trade as a separate security and were delisted from the Nasdaq.
The Company has not paid any
cash dividends on shares of Common Stock to date. The payment of cash dividends in the future will be dependent upon the Company’s
revenue and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the
discretion of the Board.
Holders of Record
As of the Closing and following
the completion of the Transactions, including the redemption of public shares as described above, the Company had 44,848,686 shares of
Common Stock outstanding held of record by 8 holders, and no shares of preferred stock outstanding. Such amounts do not include DTC
participants or beneficial owners holding shares through nominee names.
Securities Authorized for Issuance Under Equity Compensation Plans
Reference is made to the disclosure
described in the Proxy Statement/Prospectus in the sections entitled “Proposal No. 4 – The Incentive Plan Proposal”
and “Proposal No. 5 – The ESPP Proposal” beginning on pages 153 and 159, respectively, thereof, which
are incorporated herein by reference.
At the Special Meeting, Chardan
stockholders approved the Dragonfly Energy Holdings Corp. 2022 Incentive Plan (the “2022 Plan”), which is intended
to replace the Dragonfly Energy, Inc. 2019 Stock Incentive Plan and the Dragonfly Energy, Inc. 2021 Stock Incentive Plan (collectively,
the “Prior Plans”), and the Employee Stock Purchase Plan (the “ESPP”) and the material terms thereunder,
including the authorization of the initial share reserve thereunder. In accordance with the terms of the 2022 Plan and the ESPP, 2,785,950
shares and 2,464,400 shares, respectively, were initially reserved for issuance thereunder. Each of the 2022 Plan and the ESPP will terminate
ten years from their respective initial effective dates.
Description of Registrant’s Securities to be Registered
The Company’s securities
are described in the Proxy Statement/Prospectus in the section entitled “Description of Securities” beginning on page 261
thereof and that information is incorporated herein by reference. As described below, the Company’s Amended and Restated Certificate
of Incorporation (the “A&R Charter”) was approved by Chardan’s stockholders at the Special Meeting and became
effective on October 7, 2022 in connection with the consummation of the Transactions.
Indemnification of Directors and Officers
The indemnification of our
directors and officers is described in the Proxy Statement/Prospectus in the section entitled “Management of New Dragonfly After
the Business Combination–Limitation on Liability and Indemnification of Directors and Officers” beginning on page 214
thereof and that information is incorporated herein by reference. The disclosure set forth in Item 1.01 of this Report is incorporated
herein by reference.
Changes in Accountants on Accounting and Financial Disclosure
The disclosure set forth in Item 4.01 of this Report
is incorporated herein by reference.
Financial Statements and Supplementary Data
The information set forth
in Item 9.01 of this Report is incorporated herein by reference.