Material Agreement Form 8 K

Item 1.01.Entry Into a Material Definitive Agreement.

On September 30, 2024, Dragonfly Energy Holdings Corp. (the "Company") entered into a limited waiver and third amendment (the "Amendment") to its Term Loan, Guarantee and Security Agreement (as amended, the "Loan Agreement") with the lenders in regards to its compliance with the Senior Leverage Ratio and Fixed Charge Coverage Ratio tests (the "Tests") as of the last day of the quarter ended September 30, 2024 and certain amendments to the Loan Agreement. The Amendment provided for a one-time issuance of penny warrants (the "Penny Warrants") to purchase up to 3,000,000 shares of the Company's common stock, par value $0.0001 per share (the "Penny Warrant Shares"), at an exercise price of $0.01 per share, in connection with the lenders' agreement to waive the Tests under the Loan Agreement for the quarter ended September 30, 2024 and to amend the Loan Agreement. The Penny Warrants are immediately exercisable upon issuance and will expire ten years from the date of issuance.

In addition, the Amendment (i) reduced the liquidity requirement under the Loan Agreement to be $7.0 million as of the last day of the fiscal month ended September 30, 2024 and (ii) provided for the interest to be paid on the Payment Date (as defined in the Loan Agreement) occurring on October 1, 2024 to be payable partly in cash and the remainder payable-in-kind as set forth in the Amendment. The Penny Warrant and the Penny Warrant Shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and are instead being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act.

The foregoing summary and description of the provisions of the Amendment and the Penny Warrants does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment and form of Penny Warrant, copies of which are filed as Exhibits 4.1 and 10.1, respectively to this Current Report on Form 8-K and are incorporated herein by reference.