Material Agreement Form 8 K

On December 31, 2024, Dragonfly Energy Holdings Corp. (the "Company"), Dragonfly Energy Corp. and Battle Born Battery Products, LLC entered into a limited waiver and fourth amendment (the "Amendment") to its Term Loan, Guarantee and Security Agreement (as amended, the "Loan Agreement") with the lenders (the "Lenders") in regards to its compliance with the Senior Leverage Ratio and Fixed Charge Coverage Ratio tests (together, the "Tests") as of the last day of the quarter ended December 31, 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 350,000 shares (the "Penny Warrant Shares") of the Company's common stock, par value $0.0001 per share (the "Common Stock"), 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 December 31, 2024 and to amend the Loan Agreement. The Penny Warrants will expire ten years from the date of issuance and will be exercisable at such time that the Company obtains the Warrant issuance Shareholder Approval (as defined below).

Pursuant to the Amendment, the Company agreed to use commercially reasonable efforts to obtain shareholder approval for the issuance of up to 1,400,000 shares of Common Stock underlying penny warrants issued to the Lenders on and after the date of the Amendment, including the Penny Warrant Shares and the Accrued Warrant Shares (as defined below), in accordance with Rules 5635(b) and 5635(d) of the Nasdaq Stock Market (the "Warrant Issuance Shareholder Approval"). Further, the Company agreed to issue the Lenders additional penny warrants (the "Accrued Penny Warrants") exercisable for a number of shares of Common Stock pursuant to the formula set forth in the Amendment (the "Accrued Warrant Shares") upon the earlier to occur of (i) five business days after the end of the Waiver Period (as defined below) or (ii) five business days prior to the effectiveness of a Change of Control (as defined in the Loan Agreement), in which such Accrued Penny Warrants would not be exercisable prior to receipt of the Warrant Issuance Shareholder Approval.

Under the Amendment, the Lenders agreed to temporarily suspend the Lenders' rights under Section 4(b) of the Warrants (as defined in the Amendment) to receive additional warrant shares in connection with the issuances by Company of shares of Common Stock pursuant to the Committed Equity Facility (as defined in the Penny Warrants) during the period from December 31, 2024 through the earliest of (x) the Company obtaining the Warrant Issuance Shareholder Approval, (y) the occurrence of a Change of Control, or (z) December 31, 2025 (the "Waiver Period"). In addition, the Amendment: (i) provided for the interest to be paid on the Payment Date (as defined in the Loan Agreement) occurring on January 1, 2025 to be payable partly in cash and the remainder payable-in-kind as set forth in the Amendment; and (ii) reduced the liquidity requirement under the Loan Agreement to be $3.5 million as of the last day of the fiscal month ended December 31, 2024.

The Amendment also provided for a support agreement to be entered into by and among the Company and specified shareholders of the Company that hold in excess of 20% of the voting stock of the Company as of the date of the Amendment by which such shareholders agree to (i) be present at any meeting of shareholders of the Company and (ii) vote in favor of a proposal to obtain the Warrant Issuance Shareholder Approval (the "Support Agreement"). On December 31, 2024, the Company entered into the Support Agreement with the specified shareholder signatory thereto.

The foregoing summary and description of the provisions of the Amendment, the Support Agreement and the Penny Warrants does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Penny Warrant, the Amendment and the Support Agreement, copies of which are filed as Exhibits 4.1, 10.1 and 10.2, respectively to this Current Report on Form 8-K and are incorporated herein by reference.