Dragonfly Energy announced that it has closed a comprehensive restructuring of its senior secured term loan, a move that reduces the company’s debt burden and extends the maturity of the remaining obligation to October 2027. The transaction, completed in Reno, Nevada, was executed on November 5, 2025 and includes a $45 million prepayment of principal funded by a recent public offering, a $25 million conversion of principal into newly issued preferred stock convertible at $3.15 per share, and a $5 million forgiveness of debt. The remaining $19 million of the loan will carry a fixed 12 % annual interest rate, be paid monthly beginning December 31, 2025, and is subject to covenant waivers through December 31, 2026.
The restructuring delivers a tangible improvement in Dragonfly’s liquidity profile. By eliminating $45 million of debt and converting $25 million into preferred equity, the company reduces its leverage ratio and frees up cash that can be deployed toward battery‑cell manufacturing and technology development. The forgiveness of $5 million further lightens the balance sheet, while the extended maturity and covenant waivers provide a buffer that eases short‑term cash‑flow pressure and aligns the company’s debt profile with its growth timeline.
Strategically, the transaction is a key component of Dragonfly’s effort to regain compliance with Nasdaq’s listing requirements. The company had received a staff determination letter in June 2025 citing non‑compliance with the minimum Market Value of Listed Securities and bid‑price thresholds, and was granted an extension until November 10, 2025. By strengthening its capital structure, Dragonfly reduces the risk of a delisting event and positions itself to pursue new market opportunities without the immediate pressure of debt servicing. The restructuring also follows a $55.4 million public offering in October 2025 that was earmarked for working capital and debt repayment, underscoring a consistent strategy of debt management and capital raising.
From a financial‑performance perspective, the improved balance sheet supports the company’s recent margin expansion. Dragonfly’s Q2 2025 gross margin grew 430 basis points to 28.3 %, driven by lower inventory costs and higher volume absorption. The debt relief is expected to sustain this trend by reducing interest expense and allowing the company to invest in scale‑up of its proprietary battery manufacturing and system‑integration capabilities, which are core to its long‑term growth strategy.
CEO Dr. Denis Phares emphasized that the restructuring is “a very important corporate milestone in strengthening Dragonfly Energy’s capital structure and increasing our financial flexibility.” He added that, “Along with our recently completed capital raises, we believe this transaction positions us to better execute on our potential growth opportunities and drive long‑term shareholder value.” The statement signals management’s confidence that the company can now focus on expanding its Battle Born Batteries brand while maintaining compliance with Nasdaq’s listing standards.
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