0001493152-26-023103 | 10-Q | XBRL Viewer | Dragonfly Energy Holdings Corp

RELATED PARTY (Details Narrative) - USD ($)	Apr. 01, 2026	Mar. 15, 2026
Subsequent Event [Line Items]
Common stock exercise price		$ 2.99
Denis Phares [Member]
Subsequent Event [Line Items]
Number of stock options granted		38,269
Wade Seaburg [Member]
Subsequent Event [Line Items]
Number of stock options granted		36,607
Tyler Bourns [Member]
Subsequent Event [Line Items]
Number of stock options granted		20,303
Vickram Singh [Member]
Subsequent Event [Line Items]
Number of stock options granted		21,534
Director [Member] \| Restricted Stock Units (RSUs) [Member]
Subsequent Event [Line Items]
Number of RSUs granted		$ 13,364
Subsequent Event [Member] \| Denis Phares [Member]
Subsequent Event [Line Items]
Salaries	$ 498,000
Subsequent Event [Member] \| Wade Seaburg [Member]
Subsequent Event [Line Items]
Salaries	221,000
Subsequent Event [Member] \| Tyler Bourns [Member]
Subsequent Event [Line Items]
Salaries	264,000
Subsequent Event [Member] \| Vickram Singh [Member]
Subsequent Event [Line Items]
Salaries	$ 280,000

NATURE OF BUSINESS	3 Months Ended
Mar. 31, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS	Note 1 - NATURE OF BUSINESS Dragonfly Energy Holdings Corp. (the “Company”) sells lithium ion battery packs for use in a wide variety of applications. The Company sells to distributors under the Dragonfly Energy brand name, and sells direct to consumers under the trade name Battleborn Batteries. In addition, the Company develops technology for improved lithium ion battery manufacturing and assembly methods. On December 15, 2025, the Company’s Board of Directors approved a 1-for-10 reverse stock split of the Company’s common stock, par value $0.0001 per share and a corresponding proportional reduction in the number of common stock shares issued and outstanding. The reverse stock split was effected upon market open on December 18, 2025, and shares of Common Stock began trading on a split-adjusted basis as of market open on December 18, 2025. All shares of Common Stock, stock option awards and per share amounts contained in the Consolidated Financial Statements and Notes have been retroactively adjusted to reflect the 1-for-10 reverse stock split.

NATURE OF BUSINESS

3 Months Ended

Mar. 31, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF BUSINESS

Note 1 - NATURE OF BUSINESS

Dragonfly Energy Holdings Corp. (the “Company”) sells lithium ion battery packs for use in a wide variety of applications. The Company sells to distributors under the Dragonfly Energy brand name, and sells direct to consumers under the trade name Battleborn Batteries. In addition, the Company develops technology for improved lithium ion battery manufacturing and assembly methods.

On December 15, 2025, the Company’s Board of Directors approved a 1-for-10 reverse stock split of the Company’s common stock, par value $0.0001 per share and a corresponding proportional reduction in the number of common stock shares issued and outstanding. The reverse stock split was effected upon market open on December 18, 2025, and shares of Common Stock began trading on a split-adjusted basis as of market open on December 18, 2025.

All shares of Common Stock, stock option awards and per share amounts contained in the Consolidated Financial Statements and Notes have been retroactively adjusted to reflect the 1-for-10 reverse stock split.

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2026
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

SCHEDULE OF ROLL-FORWARD OF EQUITY WARRANTS (Details)	3 Months Ended
SCHEDULE OF ROLL-FORWARD OF EQUITY WARRANTS (Details)	Mar. 31, 2026 shares
Public Warrants [Member]
EquityWarrantsLineItems [Line Items]
Warrants Outstanding, January 1, 2026	104,695
Exercise of warrants
Warrants issued
Underwriters’ Warrants Outstanding, March 31, 2026	104,695
Underwriters Warrants [Member]
EquityWarrantsLineItems [Line Items]
Warrants Outstanding, January 1, 2026	6,336
Exercise of warrants
Warrants issued
Underwriters’ Warrants Outstanding, March 31, 2026	6,336
Pre Funded Underwriters Warrants [Member]
EquityWarrantsLineItems [Line Items]
Warrants Outstanding, January 1, 2026	500,000
Exercise of warrants
Warrants issued
Underwriters’ Warrants Outstanding, March 31, 2026	500,000

LONG TERM DEBT

3 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

LONG TERM DEBT

Note 6 - LONG TERM DEBT

Term Loan Agreement

As of March 31, 2026 and December 31, 2025, the Company had an outstanding term loan (the “Term Loan”) under a Term Loan, Guarantee and Security Agreement (the “Term Loan Agreement”), dated October 7, 2022, with EICF Agent LLC, as agent, and certain lenders. As amended, the Term Loan matures on October 7, 2027 and requires monthly installments based on 0.4167% of the principal amount of Term Loans outstanding beginning December 1, 2025. The obligations under the Term Loan Agreement are secured by a first priority lien on substantially all of the Company’s assets, including certain mortgaged properties.

Prior to any amendments, the Term Loan accrued interest based on the Company’s senior leverage ratio. From inception through September 30, 2024, interest accrued at a per annum rate equal to adjusted SOFR (subject to a floor of 1.0%) plus 7.0% payable in cash, plus an additional 4.5% to 6.5% payable in kind (“PIK”), depending on the Company’s senior leverage ratio. Effective April 1, 2024, interest payable to lenders subject to the regulations of the U.S. Small Business Administration (with $30,846 of principal outstanding as of that date) was limited to 14.0% per annum, excluding default interest permitted under applicable SBA regulations. From October 1, 2024 through March 31, 2025, interest on the non SBA regulated portion continued to accrue at adjusted SOFR plus 7.0% payable in cash, and 4.5% to 6.5% payable in kind. Beginning April 1, 2025, interest on all outstanding balances will be payable entirely in cash, at a rate equal to adjusted SOFR plus a margin ranging from 11.5% to 13.5%, depending on the Company’s senior leverage ratio. Effective October 20, 2025, the Term Loan was amended to adjust the fixed interest rate of the remaining outstanding principal amount under the Term Loan Agreement to a fixed interest rate of 12% per annum, payable monthly commencing December 31, 2025 that will mature in October 2027.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Note 6 - Long Term Debt (continued)

Term Loan Agreement (continued)

During the three months ended March 31, 2026 and 2025, the Company recognized interest expense of $576 and $3,579, respectively. Amortization of the debt issuance costs amounted to $921 and $1,095, respectively, for the same periods. As of March 31, 2026, the carrying value of the Term Loan was $10,325, consisting of $19,103 in principal net of $8,778 in unamortized debt discount. As of December 31, 2025, the carrying value of the Term Loan was $9,645, consisting of $19,344 in principal net of $9,699 in unamortized debt discount.

Subsequent to the original execution of the Term Loan Agreement, the Company entered into six amendments which modified terms of the facility, including, but not limited to, interest rate mechanics, the timing of principal payments, and certain financial and operational covenants. All six amendments were in effect as of March 31, 2026.

Financial Covenants

The Company is subject to two restrictive financial covenants, one which pertains to liquidity, requiring the Company to maintain cash and cash equivalents equal to or greater than $5,000 through December 31, 2026, and a maximum capital expenditure threshold of $5,000 per year. The financial covenants pertaining to maximum senior leverage ratio and fixed charge coverage ratio are both delayed until the quarter ending March 31, 2027.

At March 31, 2026, the future debt maturities are as follows:

SCHEDULE OF FUTURE DEBT MATURITIES

Fiscal Years Ending
December 31, 2026⁽¹⁾	$	704
December 31, 2027		18,399
Total debt		19,103
Less: Unamortized debt issuance costs		(8,778	)
Total carrying amount		10,325
Less: Current portion of debt		(466	)
Total long-term debt	$	9,859

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

- Definition

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

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+ Details

INVENTORY (Tables)

3 Months Ended

Mar. 31, 2026

Inventory Disclosure [Abstract]

SCHEDULE OF INVENTORY

Inventory consists of the following:

SCHEDULE OF INVENTORY

	March 31, 2026		December 31, 2025
Raw material	$	20,579	$	20,933
Finished goods		3,720		3,301
Total inventory	$	24,299	$	24,234

STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION

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

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (in years)		Aggregate intrinsic value
Balances, January 1, 2026		13,407		$	241.49	$	240.31		5.64	$	-
Options granted		116,713			2.99		2.99		9.95		-
Options forfeited		(1	)		314.59		311.00		-		-
Options expired		(35	)		263.51		259.80		-		-
Balances, March 31, 2026		130,084		$	27.50	$	27.38		9.44	$	-

At March 31, 2026
Vested and Exercisable		13,324		$	239.87				4.97	$	-
Vested and expected to vest		130,084		$	27.50				9.44	$	-

SCHEDULE OF WEIGHTED AVERAGE FAIR VALUE OF OPTIONS

	March 31, 2026
Weighted average fair value of options granted	$	1.40
Risk-free interest rate		3.92	%
Volatility		45.12	%
Expected life (years)		5.53
Dividend yield		0.00	%

SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY

The following table presents the restricted stock units activity for the three months ended March 31, 2026:

	Number of Shares			Weighted-Average Fair Market Value
Unvested shares, January 1, 2026		16,787		$	45.16
Granted		13,364			1.73
Exercised		(89	)		94.54
Forfeited		(539	)		35.06
Unvested shares, March 31, 2026		29,523		$	26.42

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

Mar. 31, 2026

Dec. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

December 31, 2026

^[1]

$ 24

Less imputed interest

Total financing lease liabilities

$ 51

$ 63

[1]	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET LOSS PER SHARE (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	1,014,956	5,658,169
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	855,349	5,225,616
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	29,523	32,359
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic		384,000
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares-basic	130,084	16,194

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

Mar. 31, 2026

Dec. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

December 31, 2026

^[1]

$ 3,221

3,746

3,860

3,614

3,446

12,600

30,487

Less imputed interest

8,085

Total operating lease liabilities

$ 22,402

$ 23,003

[1]	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Carrying Amount	$ 207	$ 713
Fair Value, Recurring [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Carrying Amount	207	713
Fair Value	207	713
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value	207	713
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value
Fair Value, Recurring [Member] \| Term Loan [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Carrying Amount	181	565
Fair Value	181	565
Fair Value, Recurring [Member] \| Term Loan [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value
Fair Value, Recurring [Member] \| Term Loan [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value	181	565
Fair Value, Recurring [Member] \| Term Loan [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value
Fair Value, Recurring [Member] \| June Public Offering [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Carrying Amount	26	148
Fair Value	26	148
Fair Value, Recurring [Member] \| June Public Offering [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value
Fair Value, Recurring [Member] \| June Public Offering [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value	26	148
Fair Value, Recurring [Member] \| June Public Offering [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Fair Value

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands			3 Months Ended		12 Months Ended
	Jan. 30, 2026 USD ($)	Jul. 29, 2024 USD ($)	Mar. 31, 2026 USD ($) Segment	Mar. 31, 2025 USD ($)	Dec. 31, 2025 USD ($)
Product Information [Line Items]
Cash and cash equivalents			$ 8,637		$ 18,270
Working capital			23,399
Net increase in cash					90,930
Number of shares issued, value				$ 63
Minimum cash requirement					5,000
Inventory reserves			560		300
Customer deposits			118		121
Contract liability recognized			121	306
Revenue			9,704	13,356
Warranty obilgation outstanding			861		$ 867
Warranty expense			$ 98	$ 123
Number of reportable segments \| Segment			2
Number of operating segments \| Segment			2
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer A [Member]
Product Information [Line Items]
Concentration risk, percentage			12.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer B [Member]
Product Information [Line Items]
Concentration risk, percentage			10.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer C [Member]
Product Information [Line Items]
Concentration risk, percentage			10.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Customer D [Member]
Product Information [Line Items]
Concentration risk, percentage					31.00%
Revenue from Contract with Customer Benchmark [Member] \| Customer Concentration Risk [Member] \| Customer D [Member]
Product Information [Line Items]
Concentration risk, percentage			14.00%	18.00%
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor A [Member]
Product Information [Line Items]
Concentration risk, percentage			43.00%		36.00%
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor B [Member]
Product Information [Line Items]
Concentration risk, percentage			10.00%		16.00%
Accounts Payable [Member] \| Supplier Concentration Risk [Member] \| Vendor C [Member]
Product Information [Line Items]
Concentration risk, percentage					12.00%
Total Purchases [Member] \| Supplier Concentration Risk [Member] \| Vendor A [Member]
Product Information [Line Items]
Concentration risk, percentage			13.00%	21.00%
Total Purchases [Member] \| Supplier Concentration Risk [Member] \| Vendor E [Member]
Product Information [Line Items]
Concentration risk, percentage			10.00%
Minimum [Member]
Product Information [Line Items]
Payment term for distributors and OEMs			30 days
Term of product warranty provided			5 years
Maximum [Member]
Product Information [Line Items]
Payment term for distributors and OEMs			90 days
Term of product warranty provided			10 years
Equity Distribution Agreement [Member]
Product Information [Line Items]
Number of shares issued, value	$ 50,000
License Agreement [Member]
Product Information [Line Items]
Licensing fee		$ 5,000
Estimated useful life		5 years
Revenue			$ 250
Deferred revenue			$ 3,333		$ 3,583

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2026

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These condensed consolidated financial statements should be read along with the Annual Report on Form 10-K filed with the SEC on March 30, 2026 of the Company for the annual period ended December 31, 2025. The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements as of and for the year then ended.

Principles of consolidation

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

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

During the three months ended March 31, 2026 and 2025, the Company incurred losses from operations and had negative cash flow from operations. As of March 31, 2026, the Company had $8,637 in cash and cash equivalents and a working capital of $23,399. The Company’s ability to achieve profitability and positive cash flow depends on its ability to increase revenue, contain its expenses and maintain compliance with the financial covenants in its outstanding indebtedness agreements.

In 2025, the Company completed several capital raising and debt restructuring transactions, resulting in aggregate net cash proceeds of approximately $90,930 and modifications to its term loan that extended the maturity to October 2027, deferred principal and interest payments, reduced outstanding principal (including partial cancellation and conversion of principal into preferred stock), and established minimum liquidity covenants. On January 30, 2026, the Company also entered into an at-the-market equity offering program under which it may, at its discretion and subject to market conditions, issue and sell up to $50 million of its common stock from time to time. Refer to Annual Report on Form 10-K for the period ended December 31, 2025 for additional information regarding these equity offerings and term loan amendments.

Management has evaluated the conditions and events described above in relation to the Company’s obligations coming due within one year after the date these condensed consolidated financial statements are issued. Based on this evaluation, the capital raise and debt restructuring activities completed in 2025 and early 2026, including access to the at-the-market equity offering program, and the Company’s ability to maintain covenant compliance with a monthly liquidity minimum of $5,000, management has concluded that although substantial doubt was initially raised, its plans have alleviated substantial doubt about the Company’s ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued.

Inventory

Inventories (Note 4), which consist of raw materials and finished goods, are stated at the lower of cost (first in, first out) or net realizable value, net of reserves for obsolete inventory. The Company continually analyzes its slow moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, the Company established reserves. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value. The Company had a reserve of $560 and $300 as of March 31, 2026 and December 31, 2025, respectively.

Use of Estimates

The preparation of financial statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company utilizes the use of estimates in its calculations for the reserve for obsolete or slow moving inventory, going concern, right of use asset, warrant liability, equity based compensation, income taxes, leases, right-of-use asset impairment, and license arrangement.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Revenue Recognition

Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

Revenue is recognized when control of the promised goods is transferred to the customer or reseller, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods and services. Revenue associated with products holding rights of return are recognized when the Company concludes there is not a risk of significant revenue reversal in the future periods for the expected consideration in the transaction. There are no material instances including discounts and refunds where variable consideration is constrained and not recorded at the initial time of sale. Generally, our revenue is recognized at a point in time for standard promised goods at the time of shipment when title and risk of loss pass to the customer.

The Company recognizes revenue from right-to-access license agreements upon the transfer of control to the customer. Upfront fees are deferred and recognized over the estimated period of benefit. Royalties are recognized as revenue when the customer’s underlying sales occur. The transaction price and timing of revenue recognition are adjusted as necessary to reflect changes in expectations.

The Company may receive payments at the onset of the contract before delivery of goods for customers in the retail channel. Payment terms for distributors and OEMs are typically due within 30-90 days after shipment. In such instances, the Company records a customer deposit liability. The Company recognizes these contract liabilities as sales after the revenue criteria are met. As of March 31, 2026 and December 31, 2025, the contract liability related to the Company’s customer deposits were approximately $118 and $121, respectively.

The Company recognized $121 of the contract liability as of December 31, 2025 during the three months ended March 31, 2026. During the three months ended March 31, 2025, the Company recognized $306 of the contract liability that was recorded as a January 1, 2025 beginning balance.

On July 29, 2024, Dragonfly Energy Corp. (“Legacy Dragonfly”), a wholly-owned subsidiary of the Company, and Battle Born Battery Products, LLC (“Battle Born LLC”), a wholly-owned subsidiary of Legacy Dragonfly, entered into a License Agreement (the “License Agreement”) with Stryten Energy LLC. The $5,000 initial licensing fee is being recognized as revenue on a straight-line basis over five years. The Company has recorded $250 in revenue related to the license agreement during the three months ended March 31, 2026. As of March 31, 2026 and December 31, 2025, the contract liability related to the Company’s deferred revenue was approximately $3,333 and $3,583, respectively.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Disaggregation of Revenue

The following table present our disaggregated revenues by distribution channel:

Sales	2026		2025
	For the Three Months Ended March 31,
Sales	2026		2025
Direct to customer		3,702		5,015
Original equipment manufacture		5,752		8,091
License fee revenue		250		250
Total	$	9,704	$	13,356

Product Warranty

The Company offers assurance type warranties from 5 to 10 years on its products. The Company estimates the costs associated with the warranty obligation using historical data of warranty claims and costs incurred to satisfy those claims. The Company estimates, based upon a review of historical warranty claim experience, the costs that may be incurred under its warranties and record a liability in the amount of such estimate at the time a product is sold. Factors that affect our warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of our recorded warranty liability and adjust the accrual as claims data and historical experience warrants. The Company has assessed the costs of fulfilling its existing assurance type warranties and has determined that the estimated outstanding warranty obligation at March 31, 2026 and December 31, 2025 to be $861 and $867, respectively. The Company incurred warranty expense of $98 and $123 for the three months ended March 31, 2026 and 2025, respectively.

The following table reflects the activity in the Company’s warranty obligation for the three months ended March 31, 2026:

SCHEDULE OF WARRANTY OBLIGATION

	March 31, 2026
Beginning warranty obligation		867
Provision of warranty expense		98
Settlement of warranty claims		(104	)
Ending warranty obligation	$	861

Concentrations

As of March 31, 2026, receivables from Customer A, Customer B, and Customer C comprised approximately 12%, 10%, and 10%, respectively, of accounts receivable. As of December 31, 2025, receivables from Customer D comprised approximately 31% of accounts receivable. There are no other significant accounts receivable concentration.

Sales from Customer D comprised approximately 14% of the Company’s total revenue for the three months ended March 31, 2026. Sales from Customer D comprised approximately 18% of the Company’s total revenue for the three months ended March 31, 2025.

As of March 31, 2026, payables to Vendor A and Vendor B comprised approximately 43% and 10%, respectively, of accounts payables. As of December 31, 2025, payables to Vendor A, Vendor C, and Vendor D comprised approximately 36%, 16%, and 12%, respectively, of accounts payables.

For the three months ended March 31, 2026, Vendor A and Vendor E accounted for approximately 13% and 10%, respectively, of the Company’s total purchases. For the three months ended March 31, 2025, Vendor A accounted for approximately 21% of the Company’s total purchases.

Stock-Based Compensation

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

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Stock-Based Compensation (continued)

Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, expected dividend yield, expected term, risk free rate of return, and the estimated fair value of the underlying common stock. Due to the lack of company specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The group of representative companies have characteristics similar to the Company, including stage of product development and focus on the lithium ion battery industry. The Company uses the simplified method, which is the average of the final vesting tranche date and the contractual term, to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company uses an assumed dividend yield of zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company accounts for forfeitures as they occur.

Income Taxes

On July 4, 2025, the One Big Beautiful Bill (the “OBBB”) Act was signed into law in the United States. The OBBB Act includes significant provisions, such as the permanent extension and modification of certain provisions of the U.S. Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions beginning in 2025 and others beginning at various dates through 2027. The Company does not expect the OBBB Act to materially impact the Company’s income tax position as of March 31, 2026.

Net Loss per Common Share

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

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

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

The following table sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share because their effect was anti-dilutive:

	2026		2025
	March 31,
	2026		2025
Warrants		855,349		5,225,616
Restricted stock units		29,523		32,359
Series A Preferred Stock		-		384,000
Options		130,084		16,194
Weighted average number of common shares-basic		1,014,956		5,658,169

Reclassifications

Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on previously reported net loss, total assets, total liabilities, stockholders’ equity, or the previously reported net decrease in cash and cash equivalents.

Segment Reporting

Operating segments are identified (Note 12) as components of the Company for which separate discrete financial information is available and that are regularly reviewed by the Company’s Chief Executive Officer, the chief operating decision maker, to make decisions about resource allocation and assess performance. The Company currently manages its business through two operating and reportable segments.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Recently issued accounting pronouncements:

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires a public entity to disclose additional information about specific expense categories in the notes to the financial statements on an annual and interim basis. It is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. In January 2025, the FASB issued ASU 2025-01 to clarify that all public entities, including non-calendar year-end entities, should adopt the disclosure requirements of ASU 2024-03. The Company is currently evaluating the impact.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient related to the estimation of expected credit losses for certain financial assets measured on an amortized cost basis, including current accounts receivable and current contract assets under FASB Accounting Standards Codification 606 - Revenues from Contracts with Customers. Under the practical expedient, a public entity may assume that current conditions as of the balance sheet date remain unchanged over the remaining life of the financial asset when developing reasonable and supportable forecasts used to estimate expected credit losses. This ASU is effective for the Company on January 1, 2026, with early adoption permitted. The adoption of this new standard did not have a material impact on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim disclosure requirements and the applicability of Topic 270. This ASU is effective for the Company on January 1, 2028, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

NATURE OF BUSINESS (Details Narrative) - $ / shares	Dec. 15, 2025	Mar. 31, 2026	Dec. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Stockholders equity reverse stock split	1-for-10 reverse stock split
Common stock par value	$ 0.0001	$ 0.0001	$ 0.0001

SCHEDULE OF LEASE COST (Details) - USD ($) $ in Thousands	3 Months Ended
SCHEDULE OF LEASE COST (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Mar. 31, 2025
Leases [Abstract]
Operating lease cost, Cost of goods sold	$ 452	$ 627
Operating lease cost, Research and development	43	40
Operating lease cost, General and administration	233	817
Operating lease cost, Selling and marketing	14	13
Total lease cost	$ 742	$ 1,497

LONG TERM DEBT (Details Narrative) - USD ($) $ in Thousands			3 Months Ended		6 Months Ended	9 Months Ended
LONG TERM DEBT (Details Narrative) - USD ($) $ in Thousands	Apr. 01, 2025	Oct. 07, 2022	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2025	Sep. 30, 2024	Dec. 31, 2026	Dec. 31, 2025	Oct. 20, 2025	Apr. 01, 2024
Debt Instrument [Line Items]
Principal amount outstanding										$ 30,846
Term loan interest rate										14.00%
Long term debt			$ 19,103
Unamortized debt discount			8,778
Cash and cash equivalent			8,637					$ 18,270
Forecast [Member]
Debt Instrument [Line Items]
Cash and cash equivalent							$ 5,000
Maximum capital expenditure							$ 5,000
Term Loan Agreement [Member]
Debt Instrument [Line Items]
Debt maturity date		Oct. 07, 2027
Debt monthly payment percentage		0.4167%
Term Loan Agreement [Member] \| Senior Notes [Member]
Debt Instrument [Line Items]
Principal amount outstanding			19,103					19,344
Interest expense			576	$ 3,579
Amortization of debt issuance costs			921	$ 1,095
Long term debt			10,325					9,645
Unamortized debt discount			$ 8,778					$ 9,699
Term Loan Agreement [Member] \| Senior Secured Term Loan Facility [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument [Line Items]
Variable rate, payable in cash					7.00%
Term Loan Agreement [Member] \| Senior Secured Term Loan Facility [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Variable rate, payable in cash	11.50%
Variable rate, payable in kind					4.50%
Term Loan Agreement [Member] \| Senior Secured Term Loan Facility [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Variable rate, payable in cash	13.50%
Variable rate, payable in kind					6.50%
Term Loan Agreement [Member] \| After April 1, 2023 Until October 1, 2024 [Member] \| Senior Secured Term Loan Facility [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument [Line Items]
Variable rate, payable in cash						7.00%
Term Loan Agreement [Member] \| After April 1, 2023 Until October 1, 2024 [Member] \| Senior Secured Term Loan Facility [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Variable rate, payable in kind						4.50%
Term Loan Agreement [Member] \| After April 1, 2023 Until October 1, 2024 [Member] \| Senior Secured Term Loan Facility [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Variable rate, payable in kind						6.50%
Term Loan Agreement [Member] \| Sixth Amendment [Member]
Debt Instrument [Line Items]
Term loan interest rate									12.00%

COMMON STOCK (Tables)

3 Months Ended

Mar. 31, 2026

Equity [Abstract]

SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE

For the three months ended March 31, 2026 and 2025, the Company had reserved shares of common stock for issuance as follows:

	March 31, 2026		March 31, 2025
Options issued and outstanding		130,084		16,194
Common stock outstanding		12,148,783		758,964
Warrants outstanding		855,349		5,225,616
Earnout shares		277,778		277,778
Series A Preferred Stock outstanding		-		384,000
Shares available for future issuance		1,504,929		122,725
Total		14,916,923		6,785,277

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2026

Fair Value Disclosures [Abstract]

SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES

The following table presents assets and liabilities that were measured at fair value in the Unaudited Condensed Consolidated Balance Sheets on a recurring basis as of March 31, 2026.

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of March 31, 2026
Liabilities
Warrant liability- Term Loan	$	181	$	181	$	-	$	181	$	-
Warrant liability- June Public Offering		26		26		-		26		-
Total liabilities	$	207	$	207	$	-	$	207	$	-

The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of December 31, 2025:

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of December 31, 2025
Liabilities
Warrant liability- Term Loan	$	565	$	565	$	-	$	565	$	-
Warrant liability- June Public Offering		148		148		-		148		-
Total liabilities	$	713	$	713	$	-	$	713	$	-

SCHEDULE OF BREAKOUT OF OPERATING LEASES (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]
Operating lease right-of-use assets	$ 14,951	$ 15,240
Short-term operating lease liabilities	2,447	2,533
Long-term operating lease liabilities	19,955	20,470
Total operating lease liabilities	$ 22,402	$ 23,003
Weighted average remaining lease term	7 years 8 months 8 days	7 years 10 months 17 days
Weighted average discount rate	8.00%	7.99%

SCHEDULE OF SIGNIFICANT INPUTS OF FAIR VALUE OF WARRANTS (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2026	Dec. 31, 2025
Penny Warrants [Member]
WarrantsLineItems [Line Items]
Common stock price	$ 1.74	$ 3.25
Exercise price	$ 0.01	$ 0.01
Dividend yield	0.00%	0.00%
Volatility	162.50%	530.80%
Risk free rate, minimum	4.00%	4.00%
Risk free rate, maximum	4.20%	4.20%
Fair value	$ 1.74	$ 3.25
Penny Warrants [Member] \| Minimum [Member]
WarrantsLineItems [Line Items]
Term	6 years 6 months 7 days	6 years 9 months 7 days
Penny Warrants [Member] \| Maximum [Member]
WarrantsLineItems [Line Items]
Term	8 years 10 months 28 days	9 years 1 month 28 days
Investor Warrants [Member]
WarrantsLineItems [Line Items]
Common stock price	$ 1.74	$ 3.25
Exercise price	$ 180	$ 180
Dividend yield	0.00%	0.00%
Term	2 years 2 months 23 days	2 years 5 months 23 days
Volatility	153.70%	571.40%
Fair value	$ 0.206	$ 3.25
Risk-free rate	3.70%	3.70%

REDEEMABLE PREFERRED STOCK

3 Months Ended

Mar. 31, 2026

Equity [Abstract]

REDEEMABLE PREFERRED STOCK

NOTE 9 - REDEEMABLE PREFERRED STOCK

Series B Convertible Preferred Stock

The Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) was issued in connection with the Sixth Amendment to the Term Loan entered into on October 20, 2025, pursuant to which $25.0 million of outstanding principal was exchanged for 25,000 shares of Series B Preferred Stock with an aggregate liquidation preference of $25.0 million. The Series B Preferred Stock is non-voting and carries a base liquidation preference of $1,000 per share, plus accrued and unpaid dividends, senior to the Company’s common stock in a liquidation. Dividends accrue at 10% per annum, with 80% payable in cash and 20% payable in kind and added to the liquidation preference; any unpaid cash dividends may also be paid in kind and added to the liquidation preference.

Each share of Series B Preferred Stock is convertible, at the holder’s option beginning six months after the original issuance date, into shares of the Company’s common stock at a fixed conversion price of $3.15 per share, subject to a minimum aggregate value of $500,000 per conversion (other than a final conversion) and customary beneficial ownership and exchange caps. The Series B Preferred Stock is redeemable at the Company’s option and under certain holder-option and other specified circumstances, generally at a price per share equal to the greater of (i) the liquidation preference (including accrued but unpaid dividends) and (ii) the value on an as-converted basis determined with reference to recent volume-weighted average trading prices of the Company’s common stock.

The Company evaluated the Series B Preferred Stock under ASC 480, Distinguishing Liabilities from Equity, and concluded it is not a liability because it is not mandatorily redeemable and does not otherwise meet the definition of a liability. The host contract was determined to be more akin to debt for purposes of ASC 815, Derivatives and Hedging; the conversion feature is not clearly and closely related to the host but qualifies for the equity classification scope exception because the conversion price is fixed and the instrument is indexed to the Company’s own stock. Because certain redemption rights are not solely within the Company’s control, the Series B Preferred Stock is presented as temporary equity and initially measured at fair value. The carrying amount is being accreted to the redemption value over the expected term, and dividends (cash and paid-in-kind) are recognized as preferred dividends.

For the three months ended March 31, 2026, the Company recognized accreted dividends of $468, related to the Series B Preferred Stock.

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands		3 Months Ended
	May 08, 2025	Mar. 31, 2026	Mar. 31, 2025
Loss Contingencies [Line Items]
Lease options to extend	the Company entered into a sixth lease amendment with its landlord to extend the lease term for an additional sixty-four (64) month period for the research and development lab and engineering office in Reno, Nevada
Lease expiration date	Nov. 30, 2030
LithiumHub Technologies LLC [Member]
Loss Contingencies [Line Items]
License amount payable			$ 2,500
License amount payable in 2025			562
License amount payable in 2026			1,938
Minimum [Member]
Loss Contingencies [Line Items]
Lease payments		$ 111	$ 309
Finance lease term		3 years
Maximum [Member]
Loss Contingencies [Line Items]
Finance lease term		5 years

SCHEDULE OF REPORTABLE SEGMENTS INFORMATION (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2026

Mar. 31, 2025

Segment Reporting [Line Items]

Net Sales

$ 9,704

$ 13,356

Reconciling items

Consolidated Net Sales

9,704

13,356

Direct material

6,046

7,548

Direct labor

827

805

Direct overhead and depreciation

1,121

1,075

Total Cost of Goods Sold

7,994

9,428

Gross profit

1,710

3,928

Research & development

980

1,000

Sales tax adjustment

Credit card & amazon transaction fees

114

Other general & administrative

4,400

6,241

Shipping

364

625

Sales and marketing stock compensation

Sales and marketing wages

493

508

Marketing spend

717

746

Rent

Unallocated sales and marketing stock compensation

243

292

Unallocated sales and marketing wages

Other sales & marketing

120

234

Total Operating Expenses

7,437

9,842

Loss from operations

(5,727)

(5,914)

Other income (expense)

Interest expense, net

(1,465)

(4,701)

Change in FMV of warrant liability

506

3,818

Total Other Income (Expense)

(898)

(883)

Net Loss Before Taxes

(6,625)

(6,797)

Income Tax Benefit

Net Income (Loss)

(6,625)

(6,797)

Reconciling items

Consolidated net loss

(6,625)

(6,797)

Direct To Consumers [Member]

Segment Reporting [Line Items]

Net Sales

3,702

5,015

Direct material

2,500

2,889

Direct labor

386

321

Direct overhead and depreciation

523

429

Total Cost of Goods Sold

3,409

3,639

Gross profit

293

1,376

Research & development

Sales tax adjustment

Credit card & amazon transaction fees

114

Other general & administrative

Shipping

228

338

Sales and marketing stock compensation

Sales and marketing wages

199

197

Marketing spend

648

675

Rent

Unallocated sales and marketing stock compensation

Unallocated sales and marketing wages

Other sales & marketing

Total Operating Expenses

1,173

1,350

Loss from operations

(880)

Other income (expense)

Interest expense, net

Change in FMV of warrant liability

Total Other Income (Expense)

Net Loss Before Taxes

(880)

Income Tax Benefit

Net Income (Loss)

(880)

Original Equipment Manufacturers [Member]

Segment Reporting [Line Items]

Net Sales

5,752

8,091

Direct material

3,546

4,659

Direct labor

441

484

Direct overhead and depreciation

598

646

Total Cost of Goods Sold

4,585

5,789

Gross profit

1,167

2,302

Research & development

Sales tax adjustment

Credit card & amazon transaction fees

Other general & administrative

Shipping

136

287

Sales and marketing stock compensation

Sales and marketing wages

294

311

Marketing spend

Rent

Unallocated sales and marketing stock compensation

Unallocated sales and marketing wages

Other sales & marketing

Total Operating Expenses

516

711

Loss from operations

651

1,591

Other income (expense)

Interest expense, net

Change in FMV of warrant liability

Total Other Income (Expense)

Net Loss Before Taxes

651

1,591

Income Tax Benefit

Net Income (Loss)

651

1,591

Other [Member]

Segment Reporting [Line Items]

Net Sales

250

^[1]

250

^[2]

Direct material

Direct labor

Direct overhead and depreciation

Total Cost of Goods Sold

Gross profit

250

Research & development

980

^[3]

1,000

^[4]

Sales tax adjustment

Credit card & amazon transaction fees

Other general & administrative

4,400

^[5]

6,241

^[6]

Shipping

Sales and marketing stock compensation

Sales and marketing wages

Marketing spend

Rent

Unallocated sales and marketing stock compensation

243

^[7]

292

^[8]

Unallocated sales and marketing wages

^[7]

^[8]

Other sales & marketing

120

^[7]

234

^[8]

Total Operating Expenses

5,748

7,781

Loss from operations

(5,498)

(7,531)

Other income (expense)

Interest expense, net

(1,465)

(4,701)

Change in FMV of warrant liability

506

3,818

Total Other Income (Expense)

(898)

^[9]

(883)

^[10]

Net Loss Before Taxes

(6,396)

(8,414)

Income Tax Benefit

Net Income (Loss)

$ (6,396)

$ (8,414)

[1]	Licensing Revenue which is not considered a segment as it is currently immaterial
[2]	Licensing Revenue which is not considered a segment as it is currently immaterial
[3]	Research and Development expenses including employee costs related to new products
[4]	Research and Development expenses including employee costs related to new products
[5]	Administrative and Engineering employee costs along with legal, insurance, professional fees related to administration and other general office expenses
[6]	Administrative and Engineering employee costs along with legal, insurance, professional fees related to administration and other general office expenses
[7]	General sales and marketing employee cost and other marketing expenses
[8]	General sales and marketing employee cost and other marketing expenses
[9]	Interest expense related to debt and change in fair market value of warrant liability
[10]	Interest expense related to debt and change in fair market value of warrant liability

SUMMARY OF RESERVED SHARES OF COMMON STOCK FOR ISSUANCE (Details) - shares	Mar. 31, 2026	Dec. 31, 2025	Mar. 31, 2025
Equity [Abstract]
Options issued and outstanding	130,084		16,194
Common stock outstanding	12,148,783	12,078,713	758,964
Warrants outstanding	855,349		5,225,616
Earnout shares	277,778		277,778
Series A Preferred Stock outstanding			384,000
Shares available for future issuance	1,504,929		122,725
Total	14,916,923		6,785,277

- Definition

Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S45
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480100/505-10-S45-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 210
-Name Accounting Standards Codification
-Section S45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477657/942-210-S45-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 210
-Name Accounting Standards Codification
-Section S50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478478/942-210-S50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(20))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478546/942-210-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.6-05(4))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479170/946-210-S99-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(4)(b))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-3

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-04(16)(a))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479170/946-210-S99-1

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(7))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-3

+ Details

SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY (Details) - Restricted Stock Units (RSUs) [Member]	3 Months Ended
	Mar. 31, 2026 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Shares, Unvested shares beginning balance \| shares	16,787
Weighted-Average Fair Market Value, Unvested shares beginning balance \| $ / shares	$ 45.16
Number of Shares, Unvested shares Granted \| shares	13,364
Weighted-Average Fair Market Value, Unvested shares Granted \| $ / shares	$ 1.73
Number of Shares, Exercised \| shares	(89)
Weighted-Average Fair Market Value, Exercised \| $ / shares	$ 94.54
Number of Shares, Forfeited \| shares	(539)
Weighted-Average Fair Market Value, Forfeited \| $ / shares	$ 35.06
Number of Shares, Unvested shares ending balance \| shares	29,523
Weighted-Average Fair Market Value, Unvested shares ending balance \| $ / shares	$ 26.42

WARRANTS (Details Narrative) - $ / shares		3 Months Ended		12 Months Ended
WARRANTS (Details Narrative) - $ / shares	Oct. 07, 2022	Mar. 31, 2026	Mar. 31, 2025	Dec. 31, 2025	Mar. 15, 2026	Feb. 26, 2025
Class of Warrant or Right [Line Items]
Share price					$ 2.99
Term Loan Warrants [Member]
Class of Warrant or Right [Line Items]
Warrants issued shares
Warrants outstanding		103,948		174,215
Warrants exercised		70,267
Warrant exercise purchase, description	the Company issued (i) the penny warrants to the Term Loan Lenders exercisable to purchase an aggregate of 28,812 shares of Common Stock (the “Original Penny Warrants”) and (ii) the $900.00 warrants to issue warrants to the Term Loan Lenders exercisable to purchase an aggregate of 17,778 shares of Common Stock at $900 per share (the “$10 Warrants” and, together with the Original Penny Warrants, the “Term Loan Warrants”).
Public Warrants [Member]
Class of Warrant or Right [Line Items]
Warrants issued shares		104,695		104,695
Warrants outstanding		104,695		104,695
Warrants exercised
Private Placement Warrants [Member]
Class of Warrant or Right [Line Items]
Warrants outstanding		16,682		16,682
Penny Warrants [Member]
Class of Warrant or Right [Line Items]
Warrants exercised		70,267
Warrants to purchase common stock	28,812
Penny Warrants [Member] \| Common Stock [Member]
Class of Warrant or Right [Line Items]
Shares issued upon exercise of warrants		69,985
$10 Warrants [Member]
Class of Warrant or Right [Line Items]
Warrants to purchase common stock	17,778
Warrants exercise price	$ 900.00
Share price	$ 900
February 2025 Penny Warrants [Member]
Class of Warrant or Right [Line Items]
Warrants to purchase common stock						33,000
Warrants exercise price						$ 0.01
Share price		$ 21.20
Warrants term						10 years

WARRANTS

3 Months Ended

Mar. 31, 2026

Warrants

WARRANTS

Note 8 - WARRANTS

Common Stock Warrants classified as Equity

Public Warrants

The Company’s Public Warrants are classified as equity and as of March 31, 2026 and December 31, 2025, there were 104,695 Public Warrants issued and outstanding.

During the three months ended March 31, 2026 and 2025, no public warrants were exercised.

The following table presents a roll-forward of the Company’s equity warrants from January 1, 2026 to March 31, 2026:

	Public Warrants		Underwriters’ Warrants		Pre-Funded Underwriters’ Warrants
Warrants Outstanding, January 1, 2026		104,695		6,336		500,000
Exercise of warrants		-		-		-
Warrants issued		-		-		-
Underwriters’ Warrants Outstanding, March 31, 2026		104,695		6,336		500,000

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Note 8 - Warrants (Continued)

Common Stock Warrants classified as Liability

Private Placement Warrants

There were 16,682 private warrants outstanding as of March 31, 2026 and December 31, 2025, respectively. The Company accounts for the Private Warrants issued in connection with the Initial Public Offering in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the private warrants do not meet the criteria for equity treatment thereunder, each private warrant must be recorded as a liability. This liability is subject to re-measurement at each balance sheet date.

With each such re-measurement, the warrant liabilities will be adjusted to its current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date.

The Private Placement Warrants are classified as Level 2 within the fair value hierarchy. Although these instruments are not actively traded, they are valued based on observable inputs, including the market price of the Company’s publicly traded warrants. The Company used a Black-Scholes model to estimate the fair value of the Private Placement Warrants, applying a discount to the value of the Public Warrants to account for the difference in remaining life. Because the valuation primarily relies on observable market data with limited adjustments, the Company determined that classification within Level 2 is appropriate.

Term Loan Warrants

In connection with the entry into the Term Loan Agreement on October 7, 2022, and as a required term and condition thereof, the Company issued (i) the penny warrants to the Term Loan Lenders exercisable to purchase an aggregate of 28,812 shares of Common Stock (the “Original Penny Warrants”) and (ii) the $900.00 warrants to issue warrants to the Term Loan Lenders exercisable to purchase an aggregate of 17,778 shares of Common Stock at $900 per share (the “$10 Warrants” and, together with the Original Penny Warrants, the “Term Loan Warrants”).

On February 26, 2025, the Company entered into the Fifth Amendment to the Term Loan with the Term Loan Lenders in connection with the February 2025 securities purchase agreement (see Note 8). The Fifth Amendment provided for a one-time issuance the February 2025 Penny Warrants to purchase up to 33,000 shares of the Company’s Common Stock, at an exercise price of $0.01 per share. The February 2025 Penny Warrants are immediately exercisable upon issuance and will expire ten years from the date of issuance.

During the three months ended March 31, 2026, Original Penny Warrant holders exercised 70,267 warrants on a cashless basis, with the Company agreeing to issue 69,985 shares of Common Stock in connection with such exercise.

The May 2024 Penny Warrants, the June 2024 Penny Warrants, the September 2024 Penny Warrants, the December 2024 Penny Warrants, and the February 2025 Penny Warrants were valued utilizing a Black-Scholes model to estimate fair value at the grant date, with the following assumptions:

SCHEDULE OF PENNY WARRANTS

	May 2024 penny warrants			June 2024 penny warrants			September 2024 penny warrants			December 2024 penny warrants			February 2025 penny warrants
Stock price	$	107.10		$	76.50		$	47.70		$	27.80		$	21.20
Strike price	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01
Term		10 years			10 years			10 years			10 years			10 years
Volatility		88	%		91	%		90	%		90	%		90	%
Risk-free rate		4.5	%		4.4	%		3.8	%		4.6	%		4.3	%

The Company concluded the Penny Warrants are not considered indexed to the Company’s Common Stock and to be accounted for as liabilities under ASC 815. As such, the estimated fair value is recognized as a liability each reporting period, with changes in the fair value recognized within income each period. There were no Term Loan Warrants outstanding prior to the merger.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Note 8 - Warrants (continued)

Common Stock Warrants classified as Liability (Continued)

Term Loan Warrants (continued)

The following table provides the significant inputs to the Black-Scholes method for the fair value of the Penny Warrants:

	As of March 31, 2026			As of December 31, 2025
Common stock price	$	1.74		$	3.25
Exercise price		0.01			0.01
Dividend yield		0	%		0	%
Term		6.52-8.91			6.77-9.16
Volatility		162.5	%		530.8	%
Risk-free rate		4.0% - 4.2	%		4.0% - 4.2	%
Fair value	$	1.74		$	3.25

The following table provides the significant inputs to the Black-Scholes method for the fair value of the Investor Warrants issued in the June 2023 Offering:

	As of March 31, 2026			As of December 31, 2025
Common stock price	$	1.74		$	3.25
Exercise price	$	180		$	180
Dividend yield		0	%		0	%
Term		2.23			2.48
Volatility		153.7	%		571.4	%
Risk-free rate		3.7	%		3.7	%
Fair value	$	0.206		$	3.25

The following table presents a roll-forward of the Company’s warrants from January 1, 2026 to March 31, 2026:

	Private Warrants		Term Loan Warrants			Investor Warrants
Warrants Outstanding, January 1, 2026		16,682		174,215			123,688
Exercise of warrants		-		(70,267	)		-
Warrants issued		-		-			-
Warrants Outstanding, March 31, 2026		16,682		103,948			123,688

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Cover - $ / shares	3 Months Ended
Cover - $ / shares	Mar. 31, 2026	May 12, 2026
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2026
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2026
Current Fiscal Year End Date	--12-31
Entity File Number	001-40730
Entity Registrant Name	DRAGONFLY ENERGY HOLDINGS CORP.
Entity Central Index Key	0001847986
Entity Tax Identification Number	85-1873463
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	12915 Old Virginia Road
Entity Address, City or Town	Reno
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89521
City Area Code	(775)
Local Phone Number	622-3448
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		12,815,340
Entity Listing, Par Value Per Share	$ 0.0001
Common Stock, par value $0.0001 per share [Member]
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	DFLI
Security Exchange Name	NASDAQ
Redeemable Warrants, exercisable for common stock [Member]
Title of 12(b) Security	Redeemable Warrants, exercisable for common stock
Trading Symbol	DFLIW
Security Exchange Name	NASDAQ

SCHEDULE OF PENNY WARRANTS (Details) - $ / shares	3 Months Ended
SCHEDULE OF PENNY WARRANTS (Details) - $ / shares	Mar. 31, 2026	Mar. 15, 2026
Class of Warrant or Right [Line Items]
Stock price		$ 2.99
May 2024 Penny Warrants [Member]
Class of Warrant or Right [Line Items]
Stock price	$ 107.10
Strike price	$ 0.01
Term	10 years
Volatility	88.00%
Risk-free rate	4.50%
June 2024 Penny Warrants [Member]
Class of Warrant or Right [Line Items]
Stock price	$ 76.50
Strike price	$ 0.01
Term	10 years
Volatility	91.00%
Risk-free rate	4.40%
September 2024 Penny Warrants [Member]
Class of Warrant or Right [Line Items]
Stock price	$ 47.70
Strike price	$ 0.01
Term	10 years
Volatility	90.00%
Risk-free rate	3.80%
December 2024 Penny Warrants [Member]
Class of Warrant or Right [Line Items]
Stock price	$ 27.80
Strike price	$ 0.01
Term	10 years
Volatility	90.00%
Risk-free rate	4.60%
February 2025 Penny Warrants [Member]
Class of Warrant or Right [Line Items]
Stock price	$ 21.20
Strike price	$ 0.01
Term	10 years
Volatility	90.00%
Risk-free rate	4.30%

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

Note 11 - STOCK-BASED COMPENSATION

On October 15, 2025 at the 2025 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company, the Company’s stockholders approved an amendment (the “Plan Amendment”) to the Company’s 2022 Equity Incentive Plan (the “2022 Plan”) increasing the number of shares available for issuance under the 2022 Plan by 900,000 shares. The Plan Amendment became effective following its approval by the Company’s stockholders.

The Company maintains the Dragonfly Energy Holdings Corp. Employee Stock Purchase Plan (the “ESPP”) which is designed to allow eligible employees and the eligible employees of the Company’s participating subsidiaries to purchase shares of the Company’s common stock, at semi-annual intervals, with their accumulated payroll deductions. A total of 27,382 shares of the Company’s common stock were initially available for issuance under the ESPP. The share limit will automatically increase on the first trading day in January of each year by an amount equal to lesser of (1) 1% of the total number of outstanding shares of the Company’s common stock on December 31 in the prior year, (2) 16,667 shares, or (3) such number as determined by the Company’s board of directors.

The Company maintains the Dragonfly Energy Corporation, Inc. Employee Stock Purchase Plan which permits eligible employees to purchase shares at not less than 85% of the market value of the Company’s common stock on the offering date or the purchase date of the applicable offering period, whichever is lower. The plan was adopted by the Company’s Board of Directors on May 13, 2022.

During the three months ended March 31, 2026 and 2025, the Company did not issue any shares of common stock under the ESPP.

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

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (in years)		Aggregate intrinsic value
Balances, January 1, 2026		13,407		$	241.49	$	240.31		5.64	$	-
Options granted		116,713			2.99		2.99		9.95		-
Options forfeited		(1	)		314.59		311.00		-		-
Options expired		(35	)		263.51		259.80		-		-
Balances, March 31, 2026		130,084		$	27.50	$	27.38		9.44	$	-

At March 31, 2026
Vested and Exercisable		13,324		$	239.87				4.97	$	-
Vested and expected to vest		130,084		$	27.50				9.44	$	-

During the three months ended March 31, 2026, the Company issued 116,713 stock options. During the three months ended March 31, 2025, the Company did not issue any stock options.

Share-based compensation expense for options and RSUs totaling $100 and $220 was recognized in the Company’s consolidated statements of operations for the three months ended March 31, 2026 and 2025, respectively.

Dragonfly Energy Holdings Corp.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Note 11 - Stock-Based Compensation (continued)

Of the $100 of share-based compensation incurred during the three months ended March 31, 2026, $3 is allocated to cost of goods sold, $4 to research and development, $20 to selling and marketing, and $73 to general and administrative expenses. Of the $220 of share-based compensation incurred during the three months ended March 31, 2025, $18 is allocated to cost of goods sold, $14 to research and development, $61 to selling and marketing, and $127 to general and administrative expenses.

The valuation methodology used to determine the fair value of the options issued during the year was the Black Scholes option pricing model. The Black Scholes model requires the use of a number of assumptions including volatility of the stock price, the fair value of the underlying stock, the average risk free interest rate, and the weighted average expected life of the options. The expected term was estimated using the simplified method due to lack of sufficient history of option exercises.

	March 31, 2026
Weighted average fair value of options granted	$	1.40
Risk-free interest rate		3.92	%
Volatility		45.12	%
Expected life (years)		5.53
Dividend yield		0.00	%

Restricted Stock Units

The following table presents the restricted stock units activity for the three months ended March 31, 2026:

	Number of Shares			Weighted-Average Fair Market Value
Unvested shares, January 1, 2026		16,787		$	45.16
Granted		13,364			1.73
Exercised		(89	)		94.54
Forfeited		(539	)		35.06
Unvested shares, March 31, 2026		29,523		$	26.42

As of March 31, 2026 and 2025 there were 1,504,929 and 122,725 shares, respectively, of unissued authorized and available for future awards under the 2022 Equity Incentive Plan and Employee Stock Purchase Plan.

SCHEDULE OF ROLL FORWARD OF LIABILITY CLASSIFIED WARRANTS (Details)	3 Months Ended
	Mar. 31, 2026 shares
Private Warrants [Member]
LiabilityWarrantsLineItems [Line Items]
Warrants Outstanding, January 1, 2026	16,682
Exercise of warrants
Warrants issued
Underwriters’ Warrants Outstanding, March 31, 2026	16,682
Term Loan Warrants [Member]
LiabilityWarrantsLineItems [Line Items]
Warrants Outstanding, January 1, 2026	174,215
Exercise of warrants	(70,267)
Warrants issued
Underwriters’ Warrants Outstanding, March 31, 2026	103,948
Investor Warrants [Member]
LiabilityWarrantsLineItems [Line Items]
Warrants Outstanding, January 1, 2026	123,688
Exercise of warrants
Warrants issued
Underwriters’ Warrants Outstanding, March 31, 2026	123,688

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2026

Accounting Policies [Abstract]

SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL

The following table present our disaggregated revenues by distribution channel:

Sales	2026		2025
	For the Three Months Ended March 31,
Sales	2026		2025
Direct to customer		3,702		5,015
Original equipment manufacture		5,752		8,091
License fee revenue		250		250
Total	$	9,704	$	13,356

SCHEDULE OF WARRANTY OBLIGATION

The following table reflects the activity in the Company’s warranty obligation for the three months ended March 31, 2026:

SCHEDULE OF WARRANTY OBLIGATION

	March 31, 2026
Beginning warranty obligation		867
Provision of warranty expense		98
Settlement of warranty claims		(104	)
Ending warranty obligation	$	861

SCHEDULE OF POTENTIAL SHARES OF COMMON STOCK EXCLUDED FROM DILUTED NET LOSS PER SHARE

The following table sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share because their effect was anti-dilutive:

	2026		2025
	March 31,
	2026		2025
Warrants		855,349		5,225,616
Restricted stock units		29,523		32,359
Series A Preferred Stock		-		384,000
Options		130,084		16,194
Weighted average number of common shares-basic		1,014,956		5,658,169

SCHEDULE OF BREAKOUT OF FINANCE LEASES (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]
Finance lease right-of-use assets	$ 76	$ 85
Short-term finance lease liabilities	28	35
Long-term finance lease liabilities	23	28
Total finance lease liabilities	$ 51	$ 63
Weighted average remaining lease term	2 years 1 month 6 days	2 years 1 month 24 days
Weighted average discount rate	5.20%	5.20%

SCHEDULE OF FUTURE DEBT MATURITIES (Details)
$ in Thousands

Mar. 31, 2026

USD ($)

Debt Disclosure [Abstract]

December 31, 2026

$ 704

^[1]

December 31, 2027

18,399

Total debt

19,103

Less: Unamortized debt issuance costs

(8,778)

Total carrying amount

10,325

Less: Current portion of debt

(466)

Total long-term debt

$ 9,859

[1]	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.9-06)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147478478/942-210-S50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147480738/235-10-S50-4

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/exampleRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1D

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-4

+ Details

REPORTABLE SEGMENTS

3 Months Ended

Mar. 31, 2026

Segment Reporting [Abstract]

REPORTABLE SEGMENTS

Note 12 - REPORTABLE SEGMENTS

The Company has two reportable segments: DTC and OEM. The DTC segment pertains to Battle Born, LLC branded batteries which are sold directly to consumers. The OEM segment pertains to Dragonfly branded batteries which are sold to original equipment manufacturers

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance for all of its reportable segments based on both segment gross and net profit or loss from operations.

For the DTC and OEM, the Chief Operating Decision Maker (“CODM”) uses both segment gross and net profit and loss from operations to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the annual budget and forecasting process.

Assets information for the reported segments is not disclosed as it is not used by the Chief Operating Decision Maker CODM in evaluating the performance of, or making decisions about, the reported segments.

The Company’s reportable segments are strategic business units that offer different branded products. They are managed separately because each segment requires different technology and marketing strategies.

The Company’s CODM is the Chief Executive Officer.

Dragonfly Energy Holdings Corp.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Note 12 - Reportable Segments (continued)

The following table presents the reportable segments information for the three months ended March 31, 2026:

	DTC			OEM		Other			Total

Net Sales	$	3,702		$	5,752	$	250(1)	⁽¹⁾	$	9,704

Reconciliation of Net Sales
Reconciling items										-
Consolidated Net Sales									$	9,704

Direct material		2,500			3,546		-			6,046
Direct labor		386			441		-			827
Direct overhead and depreciation		523			598		-			1,121

Total Cost of Goods Sold		3,409			4,585		-			7,994

Gross profit		293			1,167		250			1,710

Operating Expenses
Research & development		-			-		980(2)	⁽²⁾		980
Sales tax adjustment
Credit card & amazon transaction fees		82			-		-			82
Other general & administrative		-			-		4,400(3)	⁽³⁾		4,400
Shipping		228			136		-			364
Sales and marketing stock compensation		2			13		-			15
Sales and marketing wages		199			294		-			493
Marketing spend		648			69		-			717
Rent		14			4		-			18
Unallocated sales and marketing stock compensation		-			-		243(4)	⁽⁴⁾		243
Unallocated sales and marketing wages		-			-		5(4)	⁽⁴⁾		5
Other sales & marketing		-			-		120(4)	⁽⁴⁾		120

Total Operating Expenses		1,173			516		5,748			7,437

Loss from operations		(880	)		651		(5,498	)		(5,727	)

Other income (expense)		-			-		61			61
Interest expense, net		-			-		(1,465	)		(1,465	)
Change in FMV of warrant liability		-			-		506			506

Total Other Income (Expense)		-			-		(898(5)	)⁽⁵⁾		(898	)

Net Loss Before Taxes		(880	)		651		(6,396	)		(6,625	)

Income Tax Benefit		-			-		-			-

Net Income (Loss)	$	(880	)	$	651	$	(6,396	)	$	(6,625	)

Reconciliation of net loss
Reconciling items										-
Consolidated net loss									$	(6,625	)

(1)	Licensing Revenue which is not considered a segment as it is currently immaterial
(2)	Research and Development expenses including employee costs related to new products
(3)	Administrative and Engineering employee costs along with legal, insurance, professional fees related to administration and other general office expenses
(4)	General sales and marketing employee cost and other marketing expenses
(5)	Interest expense related to debt and change in fair market value of warrant liability

There were no significant customer revenues from the Company’s DTC segment for the three months ended March 31, 2026.

Revenues from one customer of the Company’s OEM segment represents approximately $1,369, or 14%, of the Company’s consolidated revenues for the three months ended March 31, 2026.

Dragonfly Energy Holdings Corp.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Note 12 - Reportable Segments (continued)

The following table presents the reportable segments information for the three months ended March 31, 2025:

	DTC		OEM		Other			Total

Net Sales	$	5,015	$	8,091	$	250(1)	⁽¹⁾	$	13,356

Reconciliation of Net Sales
Reconciling items									-
Consolidated Net Sales								$	13,356

Direct material		2,889		4,659		-			7,548
Direct labor		321		484		-			805
Direct overhead and depreciation		429		646		-			1,075

Total Cost of Goods Sold		3,639		5,789		-			9,428

Gross profit		1,376		2,302		250			3,928

Operating Expenses
Research & development		-		-		1,000(2)	⁽²⁾		1,000
Sales tax adjustment		2		-		-			2
Credit card & amazon transaction fees		114		-		-			114
Other general & administrative		-		-		6,241(3)	⁽³⁾		6,241
Shipping		338		287		-			625
Sales and marketing stock compensation		10		38		-			48
Sales and marketing wages		197		311		-			508
Marketing spend		675		71					746
Rent		14		4		-			18
Unallocated sales and marketing stock compensation		-		-		292(4)	⁽⁴⁾		292
Unallocated sales and marketing wages		-		-		14(4)	⁽⁴⁾		14
Other sales & marketing		-		-		234(4)	⁽⁴⁾		234

Total Operating Expenses		1,350		711		7,781			9,842

Loss from operations		26		1,591		(7,531	)		(5,914	)

Interest expense, net		-		-		(4,701	)		(4,701	)
Change in FMV of warrant liability		-		-		3,818			3,818

Total Other Income (Expense)		-		-		(883(5)	)⁽⁵⁾		(883	)

Net Loss Before Taxes		26		1,591		(8,414	)		(6,797	)

Income Tax Benefit		-		-		-			-

Net Income (Loss)	$	26	$	1,591	$	(8,414	)	$	(6,797	)

Reconciliation of net loss
Reconciling items									-
Consolidated net loss								$	(6,797	)

(1)	Licensing Revenue which is not considered a segment as it is currently immaterial
(2)	Research and Development expenses including employee costs related to new products
(3)	Administrative and Engineering employee costs along with legal, insurance, professional fees related to administration and other general office expenses
(4)	General sales and marketing employee cost and other marketing expenses
(5)	Interest expense related to debt and change in fair market value of warrant liability

There were no significant customer revenues from the Company’s DTC segment for the three months ended March 31, 2025.

Revenues from one customer of the Company’s OEM segment represents approximately $2,300, or 18%, of the Company’s consolidated revenues for the three months ended March 31, 2025.

- Definition

The entire disclosure for segment reporting.

+ References

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+ Details

REPORTABLE SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2026

Segment Reporting [Abstract]

SCHEDULE OF REPORTABLE SEGMENTS INFORMATION

The following table presents the reportable segments information for the three months ended March 31, 2026:

	DTC			OEM		Other			Total

Net Sales	$	3,702		$	5,752	$	250(1)	⁽¹⁾	$	9,704

Reconciliation of Net Sales
Reconciling items										-
Consolidated Net Sales									$	9,704

Direct material		2,500			3,546		-			6,046
Direct labor		386			441		-			827
Direct overhead and depreciation		523			598		-			1,121

Total Cost of Goods Sold		3,409			4,585		-			7,994

Gross profit		293			1,167		250			1,710

Operating Expenses
Research & development		-			-		980(2)	⁽²⁾		980
Sales tax adjustment
Credit card & amazon transaction fees		82			-		-			82
Other general & administrative		-			-		4,400(3)	⁽³⁾		4,400
Shipping		228			136		-			364
Sales and marketing stock compensation		2			13		-			15
Sales and marketing wages		199			294		-			493
Marketing spend		648			69		-			717
Rent		14			4		-			18
Unallocated sales and marketing stock compensation		-			-		243(4)	⁽⁴⁾		243
Unallocated sales and marketing wages		-			-		5(4)	⁽⁴⁾		5
Other sales & marketing		-			-		120(4)	⁽⁴⁾		120

Total Operating Expenses		1,173			516		5,748			7,437

Loss from operations		(880	)		651		(5,498	)		(5,727	)

Other income (expense)		-			-		61			61
Interest expense, net		-			-		(1,465	)		(1,465	)
Change in FMV of warrant liability		-			-		506			506

Total Other Income (Expense)		-			-		(898(5)	)⁽⁵⁾		(898	)

Net Loss Before Taxes		(880	)		651		(6,396	)		(6,625	)

Income Tax Benefit		-			-		-			-

Net Income (Loss)	$	(880	)	$	651	$	(6,396	)	$	(6,625	)

Reconciliation of net loss
Reconciling items										-
Consolidated net loss									$	(6,625	)

(1)	Licensing Revenue which is not considered a segment as it is currently immaterial
(2)	Research and Development expenses including employee costs related to new products
(3)	Administrative and Engineering employee costs along with legal, insurance, professional fees related to administration and other general office expenses
(4)	General sales and marketing employee cost and other marketing expenses
(5)	Interest expense related to debt and change in fair market value of warrant liability

The following table presents the reportable segments information for the three months ended March 31, 2025:

	DTC		OEM		Other			Total

Net Sales	$	5,015	$	8,091	$	250(1)	⁽¹⁾	$	13,356

Reconciliation of Net Sales
Reconciling items									-
Consolidated Net Sales								$	13,356

Direct material		2,889		4,659		-			7,548
Direct labor		321		484		-			805
Direct overhead and depreciation		429		646		-			1,075

Total Cost of Goods Sold		3,639		5,789		-			9,428

Gross profit		1,376		2,302		250			3,928

Operating Expenses
Research & development		-		-		1,000(2)	⁽²⁾		1,000
Sales tax adjustment		2		-		-			2
Credit card & amazon transaction fees		114		-		-			114
Other general & administrative		-		-		6,241(3)	⁽³⁾		6,241
Shipping		338		287		-			625
Sales and marketing stock compensation		10		38		-			48
Sales and marketing wages		197		311		-			508
Marketing spend		675		71					746
Rent		14		4		-			18
Unallocated sales and marketing stock compensation		-		-		292(4)	⁽⁴⁾		292
Unallocated sales and marketing wages		-		-		14(4)	⁽⁴⁾		14
Other sales & marketing		-		-		234(4)	⁽⁴⁾		234

Total Operating Expenses		1,350		711		7,781			9,842

Loss from operations		26		1,591		(7,531	)		(5,914	)

Interest expense, net		-		-		(4,701	)		(4,701	)
Change in FMV of warrant liability		-		-		3,818			3,818

Total Other Income (Expense)		-		-		(883(5)	)⁽⁵⁾		(883	)

Net Loss Before Taxes		26		1,591		(8,414	)		(6,797	)

Income Tax Benefit		-		-		-			-

Net Income (Loss)	$	26	$	1,591	$	(8,414	)	$	(6,797	)

Reconciliation of net loss
Reconciling items									-
Consolidated net loss								$	(6,797	)

(1)	Licensing Revenue which is not considered a segment as it is currently immaterial
(2)	Research and Development expenses including employee costs related to new products
(3)	Administrative and Engineering employee costs along with legal, insurance, professional fees related to administration and other general office expenses
(4)	General sales and marketing employee cost and other marketing expenses
(5)	Interest expense related to debt and change in fair market value of warrant liability

- Definition

Tabular disclosure of segment reporting. Includes, but is not limited to, reconciliation of reportable segment amount to corresponding consolidated total.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-31

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-34

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-30

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-26C

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-26B

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-26A

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 25
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-25

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-15

+ Details

INVENTORY

3 Months Ended

Mar. 31, 2026

Inventory Disclosure [Abstract]

INVENTORY

Note 4 - INVENTORY

Inventory consists of the following:

SCHEDULE OF INVENTORY

	March 31, 2026		December 31, 2025
Raw material	$	20,579	$	20,933
Finished goods		3,720		3,301
Total inventory	$	24,299	$	24,234

REDEEMABLE PREFERRED STOCK (Details Narrative) - Series B Preferred Stock [Member] $ / shares in Units, $ in Thousands		3 Months Ended
	Oct. 20, 2025 USD ($) $ / shares shares	Mar. 31, 2026 USD ($)
Class of Stock [Line Items]
Principal amount converted	$ 25,000
Preference stock, shares issued \| shares	25,000
Liquidation preference	$ 25,000
Liquidation preference per share \| $ / shares	$ 1,000
Dividends description	Dividends accrue at 10% per annum, with 80% payable in cash and 20% payable in kind and added to the liquidation preference; any unpaid cash dividends may also be paid in kind and added to the liquidation preference.
Conversion price	3.15
Conversion value	$ 500,000
Accreted dividends		$ 468

COMMON STOCK (Details Narrative) $ in Millions	Jan. 30, 2026 USD ($)
Equity [Abstract]
Aggregate offering price	$ 50

SCHEDULE OF OPTION ACTIVITY AND RELATED INFORMATION (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]
Number of Options, Balance at the beginning	13,407
Weighted- Average Exercise Price - Balances at the beginning	$ 241.49
Weighted- Average Grant Date Fair Value, Balances at the beginning	$ 240.31
Weighted- Average Remaining Contractual Life (in years)	9 years 5 months 8 days		5 years 7 months 20 days
Aggregate Intrinsic value Balances at the beginning
Number of Options granted	116,713	0
Weighted- Average Exercise Price Options granted	$ 2.99
Weighted- Average Grant Date Fair Value, Options granted	$ 2.99
Weighted- Average Remaining Contractual Life (in years), Granted	9 years 11 months 12 days
Aggregate Intrinsic value Options granted
Number of Options forfeited	(1)
Weighted- Average Exercise Price Options forfeited	$ 314.59
Weighted- Average Grant Date Fair Value, Options forfeited	$ 311.00
Aggregate Intrinsic value Options forfeited
Number of Options expired	(35)
Weighted- Average Exercise Price Options expired	$ 263.51
Weighted- Average Grant Date Fair Value, Options expired	$ 259.80
Aggregate Intrinsic value Options expired
Number of Options, Balance at the end	130,084		13,407
Weighted- Average Exercise Price Balances at the end	$ 27.50		$ 241.49
Weighted- Average Grant Date Fair Value, Balances at the end	$ 27.38		$ 240.31
Number of Options, Vested and Exercisable	13,324
Weighted- Average Exercise Price Vested and Exercisable	$ 239.87
Weighted- Average Remaining Contractual Life (in years), Vested and Exercisable	4 years 11 months 19 days
Aggregate Intrinsic value Vested and Exercisable
Number of Options, Vested and expected to vest	130,084
Weighted- Average Exercise Price Vested and expected to vest	$ 27.50
Weighted- Average Remaining Contractual Life (in years), Vested and expected to vest	9 years 5 months 8 days
Aggregate Intrinsic value Vested and expected to vest

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
Current Assets
Cash and cash equivalents	$ 8,637	$ 18,270
Accounts receivable, net of allowance for credit losses	2,979	4,215
Inventory	24,299	24,234
Prepaid expenses	1,115	1,088
Prepaid inventory	811	937
Prepaid income tax	359	353
Other current assets	1,758	1,083
Total Current Assets	39,958	50,180
Property and Equipment
Machinery and equipment	18,183	17,794
Office furniture and equipment	432	432
Leasehold improvements	7,634	7,563
Vehicle	33	33
Total	26,282	25,822
Less accumulated depreciation and amortization	(5,875)	(5,081)
Property and Equipment, Net	20,407	20,741
Operating lease right of use asset, net	14,951	15,240
Other assets	379	388
Total Assets	75,695	86,549
Current Liabilities
Accounts payable	9,139	10,322
Accrued payroll and other liabilities	2,518	4,053
Accrued tariffs	341	943
Customer deposits	118	121
Deferred revenue, current portion	1,000	1,000
Dividends Payable	502	317
Notes payable, current portion, net of debt issuance costs	466	433
Operating lease liability, current portion	2,447	2,533
Financing lease liability, current portion	28	35
Total Current Liabilities	16,559	19,757
Long-Term Liabilities
Deferred revenue, net of current portion	2,333	2,583
Warrant liabilities	207	713
Notes payable, non current portion, net of debt issuance costs	9,859	9,212
Operating lease liability, net of current portion	19,955	20,470
Financing lease liability, net of current portion	23	28
Total Long-Term Liabilities	32,377	33,006
Total Liabilities	48,936	52,763
Commitments and Contingencies (See Note 5)
Stockholders’ Equity
Preferred stock, 4,995,000 shares at $0.0001 par value, authorized, no shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively
Common stock, 400,000,000 shares at $0.0001 par value, authorized, 12,148,783 and 12,078,713 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	1	1
Additional paid in capital	162,627	163,622
Accumulated deficit	(158,718)	(152,093)
Total Stockholders’ Equity	3,910	11,530
Total Liabilities and Stockholders’ Equity	75,695	86,549
Redeemable Preferred Stock Series A [Member]
Redeemable Preferred Stock
Redeemable Preferred Stock
Redeemable Preferred Stock Series B [Member]
Redeemable Preferred Stock
Redeemable Preferred Stock	$ 22,849	$ 22,256

STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ in Thousands		3 Months Ended
	Oct. 15, 2025	Mar. 31, 2026	Mar. 31, 2025
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares available for issuance		14,916,923	6,785,277
Number stock options issued		116,713	0
Share-based compensation expense		$ 100	$ 220
Unissued authorized and available for future awards		1,504,929	122,725
Location, Statement of Income, Balance [Axis]: us-gaap:CostOfGoodsAndServicesSold
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation expense		$ 3	$ 18
Location, Statement of Income, Balance [Axis]: us-gaap:GeneralAndAdministrativeExpense
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation expense		73	127
Location, Statement of Income, Balance [Axis]: us-gaap:ResearchAndDevelopmentExpense
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation expense		4	14
Location, Statement of Income, Balance [Axis]: us-gaap:SellingAndMarketingExpense
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation expense		$ 20	$ 61
2022 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares available for issuance	900,000
Employee Stock Purchase Plan [Member] \| Common Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares available for issuance	27,382
Shares limit description	The share limit will automatically increase on the first trading day in January of each year by an amount equal to lesser of (1) 1% of the total number of outstanding shares of the Company’s common stock on December 31 in the prior year, (2) 16,667 shares, or (3) such number as determined by the Company’s board of directors
2022 Equity Incentive Plan and Employee Stock Purchase Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unissued authorized and available for future awards		1,504,929	122,725

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Income Statement [Abstract]
Net Sales	$ 9,704	$ 13,356
Cost of Goods Sold	7,994	9,428
Gross Profit	1,710	3,928
Operating Expenses
Research and development	980	1,000
General and administrative	4,482	6,357
Selling and marketing	1,975	2,485
Total Operating Expenses	7,437	9,842
Loss From Operations	(5,727)	(5,914)
Other (Expense) Income
Interest expense, net	(1,465)	(4,701)
Other income	61
Change in fair market value of warrant liability	506	3,818
Total Other Expense	(898)	(883)
Net Loss Before Taxes	(6,625)	(6,797)
Income Tax Expense (Benefit)
Net Loss	(6,625)	(6,797)
Less: Preferred Stock Dividends	(1,095)
Net Loss Attributable to Common Shareholders	$ (7,720)	$ (6,797)
Loss Per Share- Basic	$ (0.64)	$ (9.28)
Loss Per Share- Diluted	$ (0.64)	$ (9.28)
Weighted Average Number of Shares - Basic	12,083,461	732,762
Weighted Average Number of Shares - Diluted	12,083,461	732,762

RELATED PARTY

3 Months Ended

Mar. 31, 2026

RELATED PARTY

Note 7 - RELATED PARTY

On March 15, 2026, the Company’s executive leadership team agreed to reduce their salaries by approximately 20% for the remainder of fiscal 2026, effective April 1, 2026. The adjusted salaries are as follows: Dr. Phares - $498; Mr. Seaburg - $221; Mr. Bourns - $264; and Dr. Singh - $280.

In lieu of cash compensation, the executives were granted stock options under the Company’s 2022 Plan at an exercise price of $2.99 per share: Dr. Phares - 38,269 shares; Mr. Seaburg - 36,607 shares; Mr. Bourns - 20,303 shares; and Dr. Singh 21,534 shares. The options vest in three equal annual installments beginning April 1, 2026, subject to continued service and the terms of the Plan.

Additionally, each non-employee director agreed to a comparable 20% reduction in cash compensation for the remainder of fiscal 2026. In lieu thereof, the directors were granted and aggregated of 13,364 RSUs under the Plan, subject to the same vesting terms and continued Board service.

- Definition

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

+ References

+ Details

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2026

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 5 - COMMITMENTS AND CONTINGENCIES

Litigation

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, governmental actions, administrative actions, investigations or claims are pending against the Company or involve the Company that, in the opinion of the Company’s management, could reasonably be expected to have a material adverse effect on the Company’s business and financial condition.

Operating Leases

The Company has leases related to the main office, warehouse space, research and development lab, engineering office, and sales office, all located in Reno, Nevada. The leases require annual escalating monthly payments ranging from $111 to $309.

On May 8, 2025, the Company entered into a sixth lease amendment with its landlord to extend the lease term for an additional sixty-four (64) month period for the research and development lab and engineering office in Reno, Nevada. Under the terms of the amended lease, the base rent due shall be fully abated for the four (4) month period commencing on August 1, 2025, and ending on November 30, 2025. The lease is set to expire on November 30, 2030.

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

	March 31, 2026			December 31, 2025
Operating lease right-of-use assets	$	14,951		$	15,240
Short-term operating lease liabilities		2,447			2,533
Long-term operating lease liabilities		19,955			20,470
Total operating lease liabilities	$	22,402		$	23,003
Weighted average remaining lease term		7.69 years			7.88 years
Weighted average discount rate		8.00	%		7.99	%

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

At March 31, 2026, the future minimum lease payments under these operating leases are as follows:

Fiscal Years Ending
December 31, 2026⁽¹⁾	$	3,221
December 31, 2027		3,746
December 31, 2028		3,860
December 31, 2029		3,614
December 31, 2030		3,446
Thereafter		12,600
Total lease payments		30,487
Less imputed interest		8,085
Total operating lease liabilities	$	22,402

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

		For The Three Months Ended March 31,
Lease cost	Classification	2026		2025
Operating lease cost	Cost of goods sold	$	452	$	627
Operating lease cost	Research and development		43		40
Operating lease cost	General and administration		233		817
Operating lease cost	Selling and marketing		14		13
Total lease cost		$	742	$	1,497

All lease costs included in the schedule above are fixed.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

Note 5 - Commitments and Contingencies (continued)

Financing Leases

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

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

SCHEDULE OF BREAKOUT OF FINANCE LEASES

	March 31, 2026			December 31, 2025
Finance lease right-of-use assets	$	76		$	85
Short-term finance lease liabilities		28			35
Long-term finance lease liabilities		23			28
Total finance lease liabilities	$	51		$	63
Weighted average remaining lease term		2.10 years			2.15 years
Weighted average discount rate		5.2	%		5.2	%

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

At March 31, 2026, the future minimum lease payments under these financing leases are as follows:

Fiscal Years Ending
December 31, 2026⁽¹⁾	$	24
December 31, 2027		18
December 31, 2028		9
December 31, 2029		3
Total lease payments		54
Less imputed interest		3
Total financing lease liabilities	$	51

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

Other Contingencies

In March 2025, the Company agreed to pay LithiumHub a total of $2,500, of which approximately $562 is payable in 2025 and approximately $1,938 is payable in 2026, in exchange for a non-exclusive license in LithiumHub Technologies, LLC’s patent rights related to the Patents-in-Suit. In accordance with the Settlement Agreement, the Company and LithiumHub terminated the ongoing patent litigation between them. The Settlement Agreement includes no admission of infringement by the Company. On October 22, 2025, the Company paid the settlement amount in full.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2026

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

Principles of consolidation

Principles of consolidation

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Going Concern

Going Concern

Inventory

Inventory

Use of Estimates

Use of Estimates

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Revenue Recognition

Revenue Recognition

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Disaggregation of Revenue

Disaggregation of Revenue

The following table present our disaggregated revenues by distribution channel:

Sales	2026		2025
	For the Three Months Ended March 31,
Sales	2026		2025
Direct to customer		3,702		5,015
Original equipment manufacture		5,752		8,091
License fee revenue		250		250
Total	$	9,704	$	13,356

Product Warranty

Product Warranty

The following table reflects the activity in the Company’s warranty obligation for the three months ended March 31, 2026:

SCHEDULE OF WARRANTY OBLIGATION

	March 31, 2026
Beginning warranty obligation		867
Provision of warranty expense		98
Settlement of warranty claims		(104	)
Ending warranty obligation	$	861

Concentrations

Concentrations

Stock-Based Compensation

Stock-Based Compensation

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Stock-Based Compensation (continued)

Income Taxes

Income Taxes

Net Loss per Common Share

Net Loss per Common Share

The following table sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share because their effect was anti-dilutive:

	2026		2025
	March 31,
	2026		2025
Warrants		855,349		5,225,616
Restricted stock units		29,523		32,359
Series A Preferred Stock		-		384,000
Options		130,084		16,194
Weighted average number of common shares-basic		1,014,956		5,658,169

Reclassifications

Reclassifications

Segment Reporting

Segment Reporting

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 2 – Summary of Significant Accounting Policies (continued)

Recently issued accounting pronouncements:

Recently issued accounting pronouncements:

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
SUBSEQUENT EVENTS (Details Narrative) - USD ($)	May 15, 2026	Mar. 31, 2026
Penny Warrants [Member]
Subsequent Event [Line Items]
Warrants exercised		70,267
Penny Warrants [Member] \| Common Stock [Member]
Subsequent Event [Line Items]
Shares issued upon exercise of warrants		69,985
Subsequent Event [Member] \| Canaccord Genuity L L C [Member]
Subsequent Event [Line Items]
Shares sold	379,700
Net cash proceeds	$ 768
Subsequent Event [Member] \| Common Stock [Member]
Subsequent Event [Line Items]
Shares issued upon exercise of warrants	103,390
Subsequent Event [Member] \| Penny Warrants [Member]
Subsequent Event [Line Items]
Warrants exercised	103,948

SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Dec. 31, 2025
Inventory Disclosure [Abstract]
Raw material	$ 20,579	$ 20,933
Finished goods	3,720	3,301
Total inventory	$ 24,299	$ 24,234

SCHEDULE OF WARRANTY OBLIGATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Accounting Policies [Abstract]
Beginning warranty obligation	$ 867
Provision of warranty expense	98	$ 123
Settlement of warranty claims	(104)
Ending warranty obligation	$ 861

REPORTABLE SEGMENTS (Details Narrative)	3 Months Ended
REPORTABLE SEGMENTS (Details Narrative)	Mar. 31, 2026 USD ($) Segment	Mar. 31, 2025 USD ($)
Segment Reporting [Line Items]
Number of reportable segments \| Segment	2
Net Sales	$ 9,704,000	$ 13,356,000
Original Equipment Manufacturers Segment [Member]
Segment Reporting [Line Items]
Net Sales	$ 1,369	$ 2,300
Original Equipment Manufacturers Segment [Member] \| Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| One Customer [Member]
Segment Reporting [Line Items]
Percentage of revenues	14.00%	18.00%

- Definition

For an entity that discloses a concentration risk in relation to quantitative amount, which serves as the "benchmark" (or denominator) in the equation, this concept represents the concentration percentage derived from the division.

+ References + Details

- Definition

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

+ References

+ Details

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-34

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (ee)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-31

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-30

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-30

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-30

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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+ Details

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2026

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Note 3 - FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

●	Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
●	Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability, either directly or indirectly.
●	Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Note 3 - Fair Value Measurements (continued)

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following table presents assets and liabilities that were measured at fair value in the Unaudited Condensed Consolidated Balance Sheets on a recurring basis as of March 31, 2026.

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of March 31, 2026
Liabilities
Warrant liability- Term Loan	$	181	$	181	$	-	$	181	$	-
Warrant liability- June Public Offering		26		26		-		26		-
Total liabilities	$	207	$	207	$	-	$	207	$	-

The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheets on a recurring basis as of December 31, 2025:

	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
	As of December 31, 2025
Liabilities
Warrant liability- Term Loan	$	565	$	565	$	-	$	565	$	-
Warrant liability- June Public Offering		148		148		-		148		-
Total liabilities	$	713	$	713	$	-	$	713	$	-

The carrying amounts of accounts receivable and accounts payable are considered level 1 and approximate fair value as of March 31, 2026 and December 31, 2025 because of the relatively short maturity of these instruments.

The carrying value of the term loan as of March 31, 2026 and December 31, 2025 approximates fair value as the interest rate does not differ significantly from the current market rates available to the Company for similar debt and is considered Level 2.

There was no Level 3 activity for the three months ended March 31, 2026 and 2025.

DRAGONFLY ENERGY HOLDINGS CORP.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2026	Mar. 31, 2025
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (6,625)	$ (6,797)

- Definition

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

+ References

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+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Cash Flows From Operating Activities
Net Loss	$ (6,625)	$ (6,797)
Adjustments to Reconcile Net Loss to Net Cash
Stock based compensation	100	220
Amortization of debt discount	921	1,095
Change in fair market value of warrant liability	(506)	(3,818)
Non-cash interest expense (paid-in kind)		3,579
Provision for credit losses	6	103
Depreciation and amortization	794	859
Amortization of right of use of assets	289	658
Changes in Assets and Liabilities
Accounts receivable	1,230	(1,915)
Inventory	(65)	(12)
Prepaid expenses	(27)	(126)
Prepaid inventory	126	(669)
Prepaid income tax	(6)
Other current assets	(675)	54
Other assets	9
Accounts payable and accrued expenses	(2,899)	3,379
Operating lease liabilities	(601)	(706)
Accrued tariffs	(602)	30
Deferred revenue	(250)	(250)
Income tax payable		(4)
Customer deposits	(3)	(180)
Total Adjustments	(2,159)	2,297
Net Cash Used in Operating Activities	(8,784)	(4,500)
Cash Flows From Investing Activities
Purchase of property and equipment	(279)	(778)
Net Cash Used in Investing Activities	(279)	(778)
Cash Flows From Financing Activities
Proceeds from public offering (ATM), net		63
Repayment of note payable	(241)
Proceeds from preferred stock offering, net of fees		3,180
Principal payments on finance leases	(12)	(11)
Payment of dividends	(317)
Net Cash (Used in) Provided by Financing Activities	(570)	3,232
Net Decrease in Cash and cash equivalents	(9,633)	(2,046)
Beginning Cash and cash equivalents - beginning of period	18,270	4,849
Ending Cash and cash equivalents - end of period	8,637	2,803
Supplemental Disclosures of Cash Flow Information:
Cash paid for income taxes		2
Cash paid for interest	965	1
Supplemental Non-Cash Investing and Financing Activities
Purchases of property and equipment, not yet paid	360	929
Recognition of warrant liability - Investor Warrants		697
Conversion of preferred stock to common stock		273
Accrued dividends	502
Dividends paid in kind	125
Accretion of preferred stock discount	$ 468

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2026	Dec. 31, 2025
Preferred stock, shares authorized	4,995,000	4,995,000
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	400,000,000	400,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares issued	12,148,783	12,078,713
Common stock, shares outstanding	12,148,783	12,078,713
Series A Preferred Stock [Member]
Redeemable preferred stock, shares authorized	5,000	5,000
Redeemable preferred stock, par value	$ 0.0001	$ 0.0001
Redeemable preferred stock, shares issued	0	0
Redeemable preferred stock, shares outstanding	0	0
Series B Preferred Stock [Member]
Redeemable preferred stock, shares authorized	25,000	25,000
Redeemable preferred stock, par value	$ 0.0001	$ 0.0001
Redeemable preferred stock, shares issued	25,000	25,000
Redeemable preferred stock, shares outstanding	25,000	25,000

WARRANTS (Tables)

3 Months Ended

Mar. 31, 2026

Warrants

SCHEDULE OF ROLL-FORWARD OF EQUITY WARRANTS

The following table presents a roll-forward of the Company’s equity warrants from January 1, 2026 to March 31, 2026:

	Public Warrants		Underwriters’ Warrants		Pre-Funded Underwriters’ Warrants
Warrants Outstanding, January 1, 2026		104,695		6,336		500,000
Exercise of warrants		-		-		-
Warrants issued		-		-		-
Underwriters’ Warrants Outstanding, March 31, 2026		104,695		6,336		500,000

SCHEDULE OF PENNY WARRANTS

	May 2024 penny warrants			June 2024 penny warrants			September 2024 penny warrants			December 2024 penny warrants			February 2025 penny warrants
Stock price	$	107.10		$	76.50		$	47.70		$	27.80		$	21.20
Strike price	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01
Term		10 years			10 years			10 years			10 years			10 years
Volatility		88	%		91	%		90	%		90	%		90	%
Risk-free rate		4.5	%		4.4	%		3.8	%		4.6	%		4.3	%

SCHEDULE OF SIGNIFICANT INPUTS OF FAIR VALUE OF WARRANTS

The following table provides the significant inputs to the Black-Scholes method for the fair value of the Penny Warrants:

	As of March 31, 2026			As of December 31, 2025
Common stock price	$	1.74		$	3.25
Exercise price		0.01			0.01
Dividend yield		0	%		0	%
Term		6.52-8.91			6.77-9.16
Volatility		162.5	%		530.8	%
Risk-free rate		4.0% - 4.2	%		4.0% - 4.2	%
Fair value	$	1.74		$	3.25

The following table provides the significant inputs to the Black-Scholes method for the fair value of the Investor Warrants issued in the June 2023 Offering:

	As of March 31, 2026			As of December 31, 2025
Common stock price	$	1.74		$	3.25
Exercise price	$	180		$	180
Dividend yield		0	%		0	%
Term		2.23			2.48
Volatility		153.7	%		571.4	%
Risk-free rate		3.7	%		3.7	%
Fair value	$	0.206		$	3.25

SCHEDULE OF ROLL FORWARD OF LIABILITY CLASSIFIED WARRANTS

The following table presents a roll-forward of the Company’s warrants from January 1, 2026 to March 31, 2026:

	Private Warrants		Term Loan Warrants			Investor Warrants
Warrants Outstanding, January 1, 2026		16,682		174,215			123,688
Exercise of warrants		-		(70,267	)		-
Warrants issued		-		-			-
Warrants Outstanding, March 31, 2026		16,682		103,948			123,688

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2026

Commitments and Contingencies Disclosure [Abstract]

SCHEDULE OF BREAKOUT OF OPERATING LEASES

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

	March 31, 2026			December 31, 2025
Operating lease right-of-use assets	$	14,951		$	15,240
Short-term operating lease liabilities		2,447			2,533
Long-term operating lease liabilities		19,955			20,470
Total operating lease liabilities	$	22,402		$	23,003
Weighted average remaining lease term		7.69 years			7.88 years
Weighted average discount rate		8.00	%		7.99	%

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES

At March 31, 2026, the future minimum lease payments under these operating leases are as follows:

Fiscal Years Ending
December 31, 2026⁽¹⁾	$	3,221
December 31, 2027		3,746
December 31, 2028		3,860
December 31, 2029		3,614
December 31, 2030		3,446
Thereafter		12,600
Total lease payments		30,487
Less imputed interest		8,085
Total operating lease liabilities	$	22,402

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

SCHEDULE OF LEASE COST

		For The Three Months Ended March 31,
Lease cost	Classification	2026		2025
Operating lease cost	Cost of goods sold	$	452	$	627
Operating lease cost	Research and development		43		40
Operating lease cost	General and administration		233		817
Operating lease cost	Selling and marketing		14		13
Total lease cost		$	742	$	1,497

SCHEDULE OF BREAKOUT OF FINANCE LEASES

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

SCHEDULE OF BREAKOUT OF FINANCE LEASES

	March 31, 2026			December 31, 2025
Finance lease right-of-use assets	$	76		$	85
Short-term finance lease liabilities		28			35
Long-term finance lease liabilities		23			28
Total finance lease liabilities	$	51		$	63
Weighted average remaining lease term		2.10 years			2.15 years
Weighted average discount rate		5.2	%		5.2	%

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER FINANCE LEASES

At March 31, 2026, the future minimum lease payments under these financing leases are as follows:

Fiscal Years Ending
December 31, 2026⁽¹⁾	$	24
December 31, 2027		18
December 31, 2028		9
December 31, 2029		3
Total lease payments		54
Less imputed interest		3
Total financing lease liabilities	$	51

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

COMMON STOCK

3 Months Ended

Mar. 31, 2026

Equity [Abstract]

COMMON STOCK

Note 10 - COMMON STOCK

Common stockholders are entitled to dividends if and when declared by the Board of Directors subject to the rights of the preferred stockholders. No dividends on common stock had been declared by the Company.

On January 30, 2026, the Company entered into an Equity Distribution Agreement with Canaccord Genuity LLC, as lead agent and representative of the other sales agents, establishing an at-the-market offering program under which the Company may, from time to time and at its discretion, offer and sell up to $50 million of its common stock. The Company is not obligated to sell any shares under the program and retains sole discretion over the timing, amount, pricing, and other terms of any sales effected through the lead agent. The program is intended to provide the Company with a flexible source of capital to support its liquidity needs and is subject to customary closing conditions, a 3% sales commission and reimbursement of specified expenses payable to the agents, and customary indemnification and contribution provisions. As of March 31, 2026, the Company did not sell any stock under the agreement.

For the three months ended March 31, 2026 and 2025, the Company had reserved shares of common stock for issuance as follows:

	March 31, 2026		March 31, 2025
Options issued and outstanding		130,084		16,194
Common stock outstanding		12,148,783		758,964
Warrants outstanding		855,349		5,225,616
Earnout shares		277,778		277,778
Series A Preferred Stock outstanding		-		384,000
Shares available for future issuance		1,504,929		122,725
Total		14,916,923		6,785,277

Dragonfly Energy Holdings Corp.

Notes to UNAUDITED CONDENSED Consolidated Financial Statements

(in thousands, except share and per share data)

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

LONG TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

SCHEDULE OF FUTURE DEBT MATURITIES

At March 31, 2026, the future debt maturities are as follows:

SCHEDULE OF FUTURE DEBT MATURITIES

Fiscal Years Ending
December 31, 2026⁽¹⁾	$	704
December 31, 2027		18,399
Total debt		19,103
Less: Unamortized debt issuance costs		(8,778	)
Total carrying amount		10,325
Less: Current portion of debt		(466	)
Total long-term debt	$	9,859

⁽¹⁾	Represents scheduled payments for the remaining nine-month period ending December 31, 2026.

Condensed Consolidated Statements of Shareholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Preferred Stock [Member] Series A Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2024			$ 72,750	$ (82,154)	$ (9,404)
Balance, shares at Dec. 31, 2024		723,265
Net loss				(6,797)	(6,797)
Shares issued for vested restricted stock units
Shares issued for vested restricted stock units, shares		2,195
Stock compensation expense			220		220
Common stock issued in public offering (ATM), net of costs			63		63
Common stock issued in public offering (ATM), net of costs, shares		2,316
Redeemable preferred stock issued, net	$ 3,180
Redeemable preferred stock issued, net, shares	350
Conversion of preferred stock to common stock	$ (273)		273		273
Conversion of preferred stock to common stock, shares	(30)	31,189
Balance at Mar. 31, 2025	$ 2,907		73,306	(88,951)	(15,645)
Balance, shares at Mar. 31, 2025	320	758,965
Balance at Dec. 31, 2025		$ 1	163,622	(152,093)	11,530
Balance, shares at Dec. 31, 2025		12,078,713
Net loss				(6,625)	(6,625)
Cashless exercise of liability classified warrants
Cashless exercise of liability classified warrants, shares		69,985
Shares issued for vested restricted stock units
Shares issued for vested restricted stock units, shares		85
Dividends Preferred Series B - Paid-in-kind			(125)		(125)
Dividends Preferred Series B			(502)		(502)
Accretion of discount on Series B Preferred			(468)		(468)
Stock compensation expense			100		100
Balance at Mar. 31, 2026		$ 1	$ 162,627	$ (158,718)	$ 3,910
Balance, shares at Mar. 31, 2026		12,148,783

SCHEDULE OF DISAGGREGATED REVENUES BY DISTRIBUTION CHANNEL (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Disaggregation of Revenue [Line Items]
Total	$ 9,704	$ 13,356
Sales Channel, Directly to Consumer [Member]
Disaggregation of Revenue [Line Items]
Total	3,702	5,015
Original Equipment Manufacture [Member]
Disaggregation of Revenue [Line Items]
Total	5,752	8,091
License Fee Revenue [Member]
Disaggregation of Revenue [Line Items]
Total	$ 250	$ 250

- Definition

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

+ References

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SCHEDULE OF WEIGHTED AVERAGE FAIR VALUE OF OPTIONS (Details)	3 Months Ended
	Mar. 31, 2026 $ / shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Weighted average fair value of options granted	$ 2.99
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Weighted average fair value of options granted	$ 1.40
Risk-free interest rate	3.92%
Volatility	45.12%
Expected life (years)	5 years 6 months 10 days
Dividend yield	0.00%

- Definition

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

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+ Details

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2026

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Note 13 - SUBSEQUENT EVENTS

Subsequent to March 31, 2026, the remaining outstanding penny warrants of 103,948 warrants were exercised in full on a cashless basis, resulting in the issuance of 103,390 shares of common stock.

Subsequent to March 31, 2026, the Company issued and sold approximately 379,700 shares of common stock under the Equity Distribution Agreement with Canaccord Genuity LLC, resulting in additional net cash proceeds of approximately $768.