Dragonfly Energy Holdings Corp · NASDAQ:DFLI
Dragonfly Energy — Chardan NexTech Acquisition 2 — SPAC Merger (July 2022)
48 slides from Dragonfly Energy's SPAC merger presentation, Jul 13, 2022
Slide 1: Creating a New Standard For Energy Storage
CONFIDENTIAL | 1 Creating a New Standard For Energy Storage
Slide 2: Legal Disclaimer
Legal Disclaimer This investor presentation (this “Presentation”) has been prepared for use by Dragonfly Energy Corp. (“Dragonfly” or the “Company”) and Chardan NexTech Acquisition 2 Corp. (“CNTQ”) in connection with their proposed business combination. This Presentation is for information purposes
Slide 3: Legal Disclaimer (Cont'd)
Disclaimer (2/6) Legal Disclaimer (Cont’d) You should not construe the contents of this Presentation as legal, regulatory, tax, accounting or investment advice or a recommendation. We recommend that you seek independent third party legal, regulatory, accounting and tax advice regarding the contents
Slide 4: Forward-Looking Statements
Forward - Looking Statements This Presentation contains certain “forward - looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exch
Slide 5: Use of Projections
Use of Projections This Presentation may contain financial forecasts of Dragonfly. Neither Dragonfly’s independent auditors, nor the independent registered public accounting firm of CNTQ, audited, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their
Slide 6: Trademarks
Trademarks Dragonfly and CNTQ own or have rights to various trademarks, service marks and trade names that they use in connection with the operation of their respective businesses. This Presentation may also contain trademarks, service marks, trade names and copyrights of other companies, which are
Slide 7: Participants in the Solicitation
Participants in the Solicitation The Company, CNTQ and certain of their respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be participants in the solicitation of proxies from CNTQ’s shareholders in connection with the proposed Tr
Slide 8: Chardan NexTech 2 Team
Jonas Grossman CEO and Director Ventoux CCM Acquisition Corp Alex Weil CFO and Director Ventoux CCM Acquisition Corp Kerry Propper Executive Chairman Jon Biele CONFIDENTIAL | 8 Perry Boyle Roderick Hardamon Jory Des Jardins Hitesh Thakrar Todd Thomson Results Driven Board Chardan NexTech Acquisition
Slide 9: Chardan NexTech 2 Overview
▪ Chardan NexTech Acquisition 2 Corp. (NASDAQ: CNTQ) is a $127 million SPAC focused on merging with a disruptive technology company ▪ Executives are comprised of founding partners and executives of Chardan ▪ ~80 years of combined expertise, including public offering and transaction experience ▪ Boar
Slide 10: Summary Transaction Terms
CONFIDENTIAL | 10 Summary Transaction Terms ( 1 0 ) Notes: (1) Dragonfly shareholders will receive 39.05MM shares at close as a result of unvested stock options not yet issued and vested options calculated on a net share basis. (2) Existing Dragonfly shareholders at time of transaction close are ent
Slide 11: Investment Thesis
CONFIDENTIAL | 11 Investment Thesis Strategic I n v e s tm e n t Large A d d r e s s a b l e Market Pr of i ta b l e Growth A tt r a c t i v e Valuation Solid State Upside Strong L e a de r s h i p Integrated lithium - ion technology company delivering environmentally impactful solutions for energy
Slide 12: Our Team
Dr. Denis Phares Co - Founder and CEO Sean Nichols Co - Founder and COO John Marchetti CFO Nicole Harvey General Counsel Wade Seaburg Director – Outside Sales and Business Development Our Team CONFIDENTIAL | 12 Dr. Vick Singh Senior R&D Scientist Ryan Hopkins Director – Production and Automation
Slide 13: Revolutionizing smart energy storage to enable a clean, renewable future
Revolutionizing smart energy storage to enable a clean, renewable future CONFIDENTIAL | 13 CONFIDENTIAL | 13
Slide 14: Dragonfly's Industry Leading Business
CONFIDENTIAL | 14 Source: Dragonfly Energy. (1) As of Q1 2022. Profitability defined as positive Adjusted EBITDA. DTC denotes Direct to Consumer. (2) (3) (4 ) (5) OEM denotes Original Equipment Manufacturer. Based on Company’s estimated manufacturing capacity after planned expansion. ▪ Incorporated
Slide 15: The Battle Born Advantage
CONFIDENTIAL | 15 x Environmentally safe x Efficient and reliable x Innovative technology x Unmatched brand recognition x Exceptional customer experience x Designed and assembled in the U.S. Dragonfly is a full system integrator offering batteries, cables, and accessories Source: Dragonfly Energy. O
Slide 16: Deepening Relationship with THOR Industries
CONFIDENTIAL | 16 Deepening Relationship with THOR Industries CONFIDENTIAL | 16 Source: Dragonfly Energy, Public Company Filings, Company Websites, FactSet. (1) As of 07/08/2022. (2) TTM as of 04/30/2022. (3) As of 07/31/2021. (4) In which the Company participates in North America. (5) U.S. and Cana
Slide 17: Positioned to Sit at the Nexus of Energy Technology
CONFIDENTIAL | 17 Source: Dragonfly Energy. Dragonfly is Positioned to Sit at the Nexus of Energy Technology Conventional Li - ion Battery Manu f act u r ers Technology - Focused Energy Storage Vertically Integrated Energy Solid State Li - ion Cells
Slide 18: Rapidly Entering into New Addressable Markets
CONFIDENTIAL | 18 Source: Management Estimates, Frost & Sullivan, NMMA, RVIA, Grandview Research, Statista, Research Nester, Associated Press, Generac, CTIA, International Construction, U.S. Energy Information Administration, U.S. Census Bureau. (1) Annual, cumulative addressable markets by 2025E. R
Slide 19: Displacing Lead Acid Today, Replacing Coal Tomorrow
CONFIDENTIAL | 19 TO D AY TOM O R R OW Leader in non - toxic lithium - ion batteries Proprietary non - flammable, non - toxic solid state cells Technology Industry leading batteries and accessories Vertically integrated energy storage system integrator Products DTC + OEMs DTC + OEMs + Fleets + Utili
Slide 20: Company Overview
CONFIDENTIAL | 20 Company Overview
Slide 21: Lead-Acid: A Toxic Problem
CONFIDENTIAL | 21 85% Of the total global consumption of lead is for the production of lead - acid batteries (1) 900K Annual deaths attributed to lead exposure globally (1) 33% Of children suffer from lead poisoning worldwide (2) $1 Trillion Estimated annual cost of lost productivity due to lead exp
Slide 22: Battle Born Lithium-Ion vs. Lead-Acid Battery
CONFIDENTIAL | 22 Dragonfly’s cutting - edge technology is enabling the widespread conversion to green, renewable energy Battle Born Lithium - Ion vs. Lead - Acid Battery Battery Lifecycle Costs Environmentally Safe and Non - Toxic >10x Longer Life 2x – 3x More Power 1/5th the Weight 5x Faster Charg
Slide 23: Proprietary Capabilities vs. Li-Ion Competitors
CONFIDENTIAL | 23 Low draw technology keeps battery within optimal internal conditions x Optimal Performance in Winter x Verified Outperformance vs. AGM x Sel f - Regula t i n g x Minimal Energy Drain x No External Energy Required Internally Heated Battery Ensures battery longevity through regulatin
Slide 24: State-Of-The-Art Manufacturing Process
Label and Package Glue, Seal, and Cure Battery Packs Individual Cell Cycling and Sorting Assembly of the Battery Module Battery Module Cycling and Sorting Automated Process Integrate Battery Ma na g e m e nt System Battery Pack Assembly and Testing In Process of Being Automated State - Of - The - Ar
Slide 25: Proven Go-To-Market Strategy
CONFIDENTIAL | 25 Dragonfly has created a continuous validation loop that begins with educating the consumer and leads to collaboration with the manufacturer Educating the Consumer ▪ Partnered with social media influencers and professional anglers to promote brand through real - world applications ▪
Slide 26: Customer demand and brand recognition driving OEM adoption
CONFIDENTIAL | 26 Customer demand and brand recognition from aftermarket sales driving significant adoption from OEMs DTC vs. OEM Sales as a Percentage of Revenue 20 2 1 20 2 3E Adoption from OEMs D TC O E Ms Representative Customers OEM DTC (1) Growing Base of Satisfied Customers “… [Dragonfly] cam
Slide 27: Ideal LFP and NMC Markets
CONFIDENTIAL | 27 Source: Dragonfly Energy. Displacing: Lead acid batteries (all types) Competing Clean Technologies: None Key Characteristics: Long life, affordable price, safe, stable Key Considerations: Ideal for powering / charging devices and appliances and low speed vehicles Displacing: Gasoli
Slide 28: Solid State Development
CONFIDENTIAL | 28 Solid State Development
Slide 29: Solid State: Why Does it Matter?
Dragonfly’s envisioned smart storage solution will allow for a more stable power grid and encourage the widespread incorporation of renewable energy sources CONFIDENTIAL | 29 For the Environment ▪ Drives Shift from Fossil Fuels: Low levelized cost (1) competes with burning coal and natural gas ▪ Saf
Slide 30: Accelerating the Future with Solid State Development
2012 – 2019 2020 2021 2022 – 2024 Develop Dry Spraying Technique Develop Electrodes and Electrolytes Cycle Against Lithium Metal Cycle Against Graphite Assemble Layered Pouch Optimize Chemistry Construct Pilot Production Line Extend Longevity Testing Integrate into Battery Packs Scale to Mass Produc
Slide 31: Innovative Technology
Dragonfly’s solid state technology is purpose - designed for cost - effective, highly scalable manufacturing Technological Innovations Manufacturing Innovations x Proprietary Encapsulation Process x Proprietary Spray Powder Application x Non - Flammable and Non - Toxic x Homogenized Interfaces x Low
Slide 32: Validated Results from Proprietary Process
CONFIDENTIAL | 32 Spray Dryer for Feedstock Encapsulation Powder Coating for Cell Assembly Non - Flammable, Non - Toxic Proven Process for Food and Pharma Proven Process for Automotive Painting Exceptional Layer Interfacing ▪ Dragonfly’s proprietary encapsulation and dry spraying processes result in
Slide 33: Financial Highlights
CONFIDENTIAL | 33 Financial Highlights
Slide 34: Financial Projections
Financial Projections Included in this presentation are the Company’s estimates for the fiscal years 2022 and 2023 (the “Financial Projections”), based on information known as of the date of this presentation. These projections were prepared by the Company’s management as part of its long - range pl
Slide 35: Financial Projections (Cont'd)
Financial Projections (Cont’d) • Cell supply: Dragonfly has opted to purchase its lithium - ion battery cells from two carefully selected cell manufacturers in China. Doing so, to date, has enabled Dragonfly to manage inventory and lead - times in anticipation of future needs and offset potential ce
Slide 36: Existing Business Driving Future Success
CONFIDENTIAL | 36 High OEM Revenue Visibility 100% of OEM revenue expected to be generated through 2023 based on existing relationships Existing Business Driving Future Success Source: Dragonfly Energy. Note: Totals may not sum due to rounding. (1) Includes DTC battery sales, accessories, and adjust
Slide 37: Track Record of Profitable Growth
CONFIDENTIAL | 37 $1 $2 $9 $9 $ 12 $ 4 1 2 0% (5%) (4%) 11% 2% 2% 16 % 2020 Materials Growth 2021 Automation P l a t fo r m 2023E Costs Investments Efficiency S c a l a b il i t y Track Record of Profitable Growth Source: Dragonfly Energy. Note: Totals may not sum due to rounding. (1) Non - GAAP met
Slide 38: Financial Summary
CONFIDENTIAL | 38 Financial Summary Source: Dragonfly Energy. Note: Totals may not sum due to rounding. (1) Includes DTC battery sales, accessories, and adjustments. (2) Non - GAAP metric. Adj. EBITDA reconciles to Operating Income (the nearest GAAP financial measure) and adds back stock - based com
Slide 39: Valuation Benchmarking: EV / 2023E Revenue
CONFIDENTIAL | 39 3.1x 3.1x Attractive entry point based on 2023E Revenue with potential substantial upside from solid state technology EV / 2023E Revenue Valuation Benchmarking Solid State Tech - Focused Energy Storage Li - ion Battery M a n u f a c t u r e r s Vertically Integrated Energy 2.5x Med
Slide 40: Valuation Benchmarking: EV / 2023E EBITDA
CONFIDENTIAL | 40 12.2x 8 3. 5 x 1 9 . 9 x 21. 6 x Attractive entry point based on 2023E EBITDA with potential substantial upside from solid state technology EV / 2023E EBITDA Valuation Benchmarking (Cont’d) Solid State Tech - Focused Energy Storage Li - ion Battery M a n u f a c t u r e r s Vertica
Slide 41: Valuation Benchmarking: Growth Adjusted Multiples
41. 2 x 6 1 . 7 x 1.6x 0. 4 x 7 . 9 x 4 . 8 x Median Multiples Solid State Tech - Focused Energy Storage Li - ion Battery M a n u f a c t u r e r s Vertically Integrated Energy Growth Adjusted EV / 2023E Revenue (1) Growth Adjusted EV / 2023E EBITDA (1) 48.0x Median 3.8x Median Source: FactSet; Publ
Slide 42: Operational Benchmarking
16% 3% 1 5 % 1 5 % 4 0 % 1 6 % 2 2 % 2 8 % 8 1 % 4 3 % 4 6 % Operational Benchmarking Solid State Tech - Focused Energy Storage Li - ion Battery M a n u f a c t u r e r s Vertically Integrated Energy R e v e n u e CAGR (2021 – 2023E) Median 2023E Gross Margin Median 2023E EBITDA Margin Median 46% Me
Slide 43: Risk Factors
The risks presented below are certain of the general risks related to the business of the Company and the business combination, and such list is not exhaustive. You should carefully consider these risks and uncertainties, and should carry out your own diligence and consult with your own financial, t
Slide 44: Risks Related to Solid State Technology Development
Risks Related to Dragonfly’s Solid State Technology Development • We face significant engineering challenges in our attempts to develop and manufacture solid state battery cells and these efforts may be delayed or fail which could negatively impact our business. • We expect to make significant inves
Slide 45: Risks Related to Financial Position and Capital Requirements
Risks Related to Dragonfly’s Financial Position and Capital Requirements • Our business is capital intensive, and we may not be able to raise additional capital on attractive terms, if at all. Any further indebtedness we incur, including pursuant to the commitment letter with Energy Impact Credit Fu
Slide 46: Risks Related to the Business Combination (Cont'd)
Risks Related to Ownership of CNTQ Securities and the Business Combination (Cont’d) • Our Sponsor, directors or officers or their affiliates may elect to purchase shares from public stockholders, which could reduce the number of shares that may be redeemed in connection with the Business Combination
Slide 47: Risks Related to Ownership of New Dragonfly's Common Stock
Risks Related to Ownership of New Dragonfly’s Common Stock • If securities or industry analysts do not publish research or reports about New Dragonfly, or publish negative reports, New Dragonfly’s stock price and trading volume could decline. • If the Business Combination’s benefits do not meet the
Slide 48: Revolutionizing smart energy storage to enable a clean, renewable future
CONFIDENTIAL | 48 Revolutionizing smart energy storage to enable a clean, renewable future
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